Table of Contents

INTRODUCTION ............................................................................................................................................. 2 STRATEGY FORMULATION ............................................................................................................................ 4 VISION ....................................................................................................................................................... 4 MISSION .................................................................................................................................................... 4 VALUES ...................................................................................................................................................... 5 EXTERNAL ENVIRONMENT ........................................................................................................................ 5 INTERNAL ENVIRONMENT ........................................................................................................................ 7 LONG TERM OBJECTIVES........................................................................................................................... 7 STRATEGIES ............................................................................................................................................... 9 STRATEGY IMPLEMENTATION..................................................................................................................... 10 OBJECTIVES ............................................................................................................................................. 10 POLICIES .................................................................................................................................................. 10 A STRATEGY SUPPORTIVE CULTURE ....................................................................................................... 11 HUMAN RESOURCE STRATEGIES ............................................................................................................ 13 DIVERSITY ................................................................................................................................................ 15 STRATEGY EVALUATION .............................................................................................................................. 16 FUTURE OUTLOOK ...................................................................................................................................... 22

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INTRODUCTION
Telenor Pakistan, a wholly owned subsidiary of Telenor ASA, launched its operations in March 2005. One of the leading telecom operators providing prepaid, postpaid and value-added services to seven million customers, it is spread across the country with a network of 15 company-owned sales and service centers, more than 200 franchisees and some 100,000 retail outlets selling subscriptions and refills. Differentiated packages include TalkShawk, Telenor Persona and Djuice.

Telenor took a big step seven years ago when it decided to expand in international markets. The key take points include: right time, targeting of emerging markets, policy of full management control (avoided joint ventures) and deployment of a repeatable methodology (for example the djuice brand). The success of the strategic focus can be understood from the following1:

http://telecompk.net/2008/12/30/telenor-emerging-market-strategy-success-swot/

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Telenor believes: What matters most is the right strategy, at the right time and precision in execution.

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STRATEGY FORMULATION
VISION2

VISION:

WE'RE HERE TO HELP

We exist to help our customers get the full benefit of communications services in their daily lives.

MISSION3
Telenor's primary goal is to create greater value for our shareholders, customers, employees and partners, and for society in general. We strive to be a driving force in creating, simplifying and introducing communication and content solutions to the marketplace.

2 3

http://www.telenor.com.pk/about/visionValues.php http://creativez.blogster.com/mission-statements-different

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VALUES4
MAKE IT EASY

We're practical. We don't complicate things. Everything we produce should be easy to understand and use. Because we never forget we're trying to make customers' lives easier.

KEEP PROMISES

Everything we set out to do should work, or if it doesn't, we're here to help. We're about delivery, not over promising, actions not words.

BE INSPIRING

We are creative. We strive to bring energy to the things we do. Everything we produce should look good, modern and fresh. We are passionate about our business and customers. We acknowledge and respect local cultures. We do not impose one formula worldwide. We want to be a part of local communities wherever we operate. We believe loyalty has to be earned.

BE RESPECTFUL

EXTERNAL ENVIRONMENT
POLITICAL Tax rates Government Regulations PTA Special tariffs ECONOMIC Level of disposable income Consumption patterns Demand shifts for goods/services Income differences by region/customer Price fluctuations Tax rates SOCIAL Per capita income Buying habits Ethical concerns Average level of education Government regulation Attitudes toward customer service Attitudes toward product quality Social responsibility TECHNOLOGICAL Power cuts Fibre and opex COMPETITVE

http://www.telenor.com.pk/about/visionValues.php

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SEGMENTATION Market Segment Youth/ Students Women Financially Constraint Corporate/ SME 25% 30% Today 25% 10% 40% Feature Year Estimate 27% 20% 23% Djuice, TalkShawk TalkShawk TalkShawk, Azadi Postpaid Packages 30% Telenor 29% 21% 20% Existing Product Profitability

CPM
CPM
Critical Success Factor Advertising Product Quality Price Competition Management Financial Position Customer Loyalty Global Expansion Market Share Weight Mobilink Rating Score Warid Rating Score Ufone Rating Score Rating Zong Score

0.1 0.15

2 2

0.2 0.3

2 2

0.2 0.3

3 3

0.3 0.45

3 3

0.3 0.45

0.1

0.3

0.2

0.3

0.3

0.1 0.1

3 4

0.3 0.4

2 2

0.2 0.2

4 3

0.4 0.3

3 2

0.3 0.2

0.15

0.3

0.3

0.45

0.3

0.1

0.3

0.2

0.1

0.3

0.2

0.8

0.4

0.6

0.4

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Total

1.0

2.90

2.00

2.90

2.55

The intense competition in the telecom industry has made it really difficult to survive the financial crunch has added to the difficulties of the telecom service providers. The most important factors in that need to be considered while making a strategic plan are customer loyalty which generally is based on the quality of the service provided and this determines the market share of the firm. Advertising is a double edge sword; good promotion attracts the customer while bad one distracts them. In telecom industry a common practice is to eat competitors market share by indulging into price wars but one must set a limit otherwise it could backfire and sunk the company. Company needs to plan all its operations depending on its financial health never ever pick up industry giants for one on one fight and avoid taking leverage position instead go for the cost cutting strategy. By looking at the matrix it is evident that Mobilink and Ufone are at the front while Warid is lagging behind in competition. On the other hand Zongs performance is average in industry.

INTERNAL ENVIRONMENT
HUMAN CAPITAL DIVISION People Excellence & Business Process Improvement Organizational Support Services Safety and Security FINANCE DIVISION Business Planning & Finance Procurement Revenue Assurance & Fraud Management Credit Control Accounts Treasury and Financial Operations Audit and Internal Control IT DIVISION Business Support System IT Operations IT Security TECHNICAL DIVISION Network Planning & Design Implementation Operations & Maintenance Real Estate & Site Acquisition COMMERCIAL DIVISION Sales & Distribution Marketing Customer Relations Segments & Pricing Products & Platforms

LONG TERM OBJECTIVES

1. To deliver increased profitable growth

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Telenor seeks to increase core mobile revenues. Telenor is also investing in adjacent markets such as basic financial services and machine-to-machine (M2M) communication. 2. To strengthen our performance culture Telenor will continue the successful practice of combining a local approach with global expertise. This means that the local management teams will build a unique performance culture based on their own initiatives and in line with the Telenor governance model, Codes of Conduct, vision and values and people policy. In terms of Health, Safety and Environment (HSE), their objective is to improve working conditions and environmental management by having clearly defined standards across the operating company and supply chain. 3. To make responsible business a competitive advantage Corporate responsibility at Telenor will be part of managing risk and linked to the core business. Telenor has a strong track record when it comes to sustainable business: it was ranked top performer by the Dow Jones Sustainability Indexes (DJSI) in 2007 and 2008. 4. To provide a superior customer experience Faced with an increasingly competitive environment, Telenor needs to differentiate itself by providing a superior customer experience. In the vision and core values, they put customer experience at the top of the agenda. One of their ambitions is to reach a situation where end-users brand preference is higher than the Telenor market share. 5. To ensure best practice benchmarking A global objective is to achieve a higher reduction in the average operational cost per minute than the expected decline in average price per minute. Telenor aims to achieve considerable continued growth in operating cash flow from its operations. 6. To drive change and constant renewal To secure a strong industry position, innovation is paramount. Major areas identified are:

Their long-term ambition is to achieve the same position in broadband (mobile and fixed) as they have in mobile voice today.

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Telenor aims to establish itself as a significant player in parts of the financial services industry in select under-serviced markets, establishing a platform for long-term growth.

Telenor controls many valuable assets that can be further developed together with partners. Partner-driven innovation is a cost-effective way to create many new revenue-generating services. Objectives 2006-07 $4 10% 9% 7% 5% 6% 20% 2015 $6- $8 40% 30% 30% 10% 90%

ARPU(Average Revenue Per User) Market Share in terms of Subscribers Market Penetration Market Share in terms of Revenue EBITA(Earning before Interest, Tax and amortization) Unprompted Brand Awareness

STRATEGIES
Market Penetration Diversification in new directions and regions Focus on mobile internet Acquiring a microfinance bank Global expansion (Telenor has also entered the Indian market by taking a stake in Unitech Wireless) Mix of differentiation and low cost Lower capital expense investment due to recession/ slow market growth Utilize 3G technology opportunity

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STRATEGY IMPLEMENTATION
OBJECTIVES
Prepaid- djuice, talks hawk Post-paid- persona Achieve a SIM penetration over 70% Attain a market share above 25% Maintain EBITDA in mid thirties Obtain a ratio of Capex/sales below 25% Capital expenditure was related to network rollout to accommodate subscription growth and increased traffic Increase Subscription growth

POLICIES

POLICIES
Customers shall be met with insight, respect and understanding. Suppliers shall be Always try to fulfil the treated impartially and Suppliers in needs of the customer in justly. for the best possible competition manner, within the contracts with Telenor guidelines for Corporate shall at all times be able Responsibility that apply to trust Telenor's selection processes. to the business. Customer's personal When selecting suppliers the group's information shall be follow guidelines protected in accordance established with the relevant laws and routines at all times. on protection personal data. of Telenor is firmly opposed to all forms of corruption. Never offer or accept As an employee of illegal or inappropriate monetary gifts or other Telenor you shall not hold another position or remuneration in order to carry out work for others achieve business or personal advantages for during working hours without prior express yourself or others. written permission from Nor use agreements with your superior. middlemen to channel payment to anyone in such a way that may be interpreted as corruption.

Telenor's competitiveness in the market is based on good products and services at the right price. Always meet the group's competitors in an honest and professional manner.

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A STRATEGY SUPPORTIVE CULTURE

SOURCES OF CULTURE AT TELENOR PAKISTAN PEOPLE Telenor Pakistan consists of energetic, youthful and dedicated employees aged 27 to 28 on average. An appropriate match is required between the culture and employees at recruitment and hiring. If People Excellence (Human Resource Department) feels that a person will not be unable to adjust into the organizations environment, even if he/she is performing functionally well, the person is rejected.

Primarily the culture comes from the top management. CEO of Telenor Pakistan is humble and cooperative. The employees get the message that if the top management is so accommodating then the employees should behave similarly. What is important to the CEO becomes important for employees to identify completely with the organization. There are four foreigners in the top management but this does not create communication barriers. They are extra humble to others while individuals of a local origin are extra sensitive to them so no one feels alienated. The values of humbleness and free interaction in putting forth ideas lead to a harmonious culture and efficient communication. The management is easily accessible to discuss various issues. It is difficult to distinguish between them as the culture is so homogeneous that it keeps every one at par with others (no formal protocol is given).

ORGANIZATIONAL ETHICS While making any decision, Telenor Pakistan has been ethically conscious. Since Telenor (the parent company) has is origins in Norway, a society with a soft-oriented and feminine culture, Telenor Pakistan acknowledges its moral and ethical duty towards its stakeholders and society. Telenor Pakistan will not resort to bribery or illegal offers to accept any decision; values will not be compromised to get licensed. If the organization believes it is not ethically right, it will never take that decision.
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In most of advertisements they project themselves as the care taker of the values of Pakistani people, so they claim to cherish the core cultural norms and values of the Pakistani people. When the cartoon controversy arose, Telenor condemned such actions mocking religious beliefs and portrayed this on their building.

ORGANIZATIONAL STRUCTURE The organic structure of Telenor Pakistan promotes cultural values that result in integration and coordination.

CEREMONIAL RITES AT TELENOR PAKISTAN Type of Rite Rite of passage Rite of integration Instances of Rite Orientation Sessions Eid Milan Programs, Halloween Parties and announcements of Telenors success Rite of enhancement Purpose of Rite Learn and internalize values Build and reinforce common values

Legends, Press Releases, Employee of the Integrate and enhance Year Rewards, Employee Promotion and Rotation cultural values

At Telenor, People Excellence reinforces the culture through the concept of a LEGEND for individuals who have performed outstandingly. These become role models for other people and their examples are quoted on various occasions (forum or ceremonies), so every employee is internally motivated to work harder.

The new recruits are given orientation sessions where they are made to familiarize with the values and norms of the organization and how they can contribute to the organization even better. They
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are also provided with a Joining Book that comprises of the code of conduct and complete structure of policies and values.

HUMAN RESOURCE STRATEGIES

The Human Resource at Telenor Pakistan is their core competency. The reason is that the employees create a culture and all the achievements of Telenor are attributed to its flexible culture. It is necessary to motivate and retain this asset of the organization. For this purpose, training and compensation is provided to employees along with other motivational techniques.

TRAINING The methods of training differ from function to function. On-the-job training is required in the Customer Relationship Department (CRD) and similar system training in the IT Department. Management Training Programs combine experiential learning with theory. Leaders are chosen according to the following role expectations: LEADERSHIP EXPECTATIONS FOR TELENOR PAKISTAN

Passion for Business

Operational Ecellence
LEADERSHIP EXPECTATIONS

Empower People

Change and Constant Renewal

Integrity

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COMPENSATION The core compensation includes: Base salary Bonus/commission Long-term incentive plans

In addition, Telenor offers a total package that may include insurance, recreational activities and other benefits adapted to the local market and individual employees need. Managers are rewarded according to the achievement of assigned goals. Apart from monetary rewards, such as variable pays/increments, other motivational tools such as recognition (Employee of the Year rewards) are used.

CAREER GROWTH Initially, qualifications are the defining criterion for fresh graduates. For career growth, the right mix of performance on the job and performance potential for the other level is imperative. Apart from the right attitude, knowledge also matters. If an individual from Finance gets a higher degree, for instance, becomes a chartered accountant then the chances of growth increase. There are no specific career paths: Vice President (VP) of Human Capital Division (HCD) became the next Chief Marketing Officer (CMO).

EMPLOYEE MOTIVATION Underperforming managers are encouraged through coaching and counseling by their respective directors or the director of People Excellence. The turnover is not high as

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compared to that of the industry. There is no defined employee exchange program. Employees performing exceptionally well are taken up to work in the Telenor Group.

Relocations are common in the organization: employees are transferred from People Excellence to Finance or from Procurement to Customer Relations. Investment per employee is placed at the higher end of the industry.

DIVERSITY
Telenor Pakistan is keen to promote diversity and has achieved good results in this area. Telenor has developed requirements for diversity in both recruitment and our management development programs. There is an appropriate blend of less seasoned and experienced employees. No quota has been assigned; the best-fit candidate (according to the job requirements) is employed. At the office level or call centers, even fresh graduates are apt but the director level requires a masters degree and preferably some work experience.

Telenor Pakistan has a large proportion of females who are recruited for internal leadership development programs and executive positions on the basis of past performance. The organization is working on Day Care Centers to help female employees manage their responsibilities after settling down. Relocation issues are dealt cooperatively when female individuals move out of the city after marriage and wish to continue working. They are relocated and facilitated in the new city.

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STRATEGY EVALUATION
REENGINEERING: AFTERMATH OF FINANCIAL CRUNCH Telenor has attained a competitive advantage in the market by aligning competences and strategies. Highly motivated employees and flexible culture enables them to achieve an edge over competitors.
COMPETITIVE ADVANTAGES OF TELENOR PAKISTAN

Service Quality & Performance through a superior network design

Convenience through the distribution setup

Simplicity and trust through pricing structure and transparency

Efficiency through alignment of structure and strategy

Improving our performance management The Telenor Group aims to create a stronger link between the strategy process and performance monitoring. All operating companies will implement a new and improved management model where strategic objectives and ambitions are monitored closely at both the company level and the lower department level.

Since its launch of services in March 2005, Telenor Pakistan has exceeded all expectations: It has created the second largest mobile network and the largest and most advanced data network in the local market, turned into the second highest revenue-generating mobile player with the highest Average Revenue Per User (ARPU) in the market, and become the second largest mobile player in the market with 18 million active subscriptions in little more than 3 years of operations. During the first half of 2008, Telenor Pakistan added 3.24 million subscriptions against the industry average of 1.63 million, taking 33% of the market share of net additions over the period the highest in the mobile sector in Pakistan.
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The company has created 2500 direct and more than 25000 indirect employment opportunities with 100,000+ retail outlets and 200+ franchises in addition. 99.9% of these employment opportunities belong to Pakistanis. Initiated with a relief effort worth 95 million rupees in the wake of the devastating earthquake of October 2005, Telenor Pakistans community contributions have extended over the years to include education, empowerment, enterprise, and environment - with special focus on bringing the telecom promise within the grasp of the most disadvantaged sections of the society. Telenor Pakistan has received several awards for its solid performance in key areas of activities: Federation of Pakistan Chambers of Commerce & Industrys Telecom Excellence Award in Foreign Direct Investment in June 2006 Central Board of Revenues High Tax Payer Award 2004-5 in January 2006 The Pakistan Society of Human Resource Managements Preferred Graduate Employer Award for Most Preferred Telecommunications Company 2007 among MBA students SAARC Communication Industry Conference 2007s Most Innovative Mobile Operator Award and Mobile Operator with the Most Consumer Pull Award Telenor Global Brand Award for the year 2007 All Pakistan Dawn Aurora Advertising Awards in three of five nominated categories in March 2007 The National Forum for Environment & Healths Annual Environment Excellence Awards 2008 Lahore Chamber of Commerce & Industries Appreciation Award for the Largest FDI and Rawalpindi Chamber of Commerce & Industries Achievement Award 2008 The Helpline Trusts 2nd Corporate Social Responsibility Award 2008 Telenor Pakistan is committed to bringing true mobile innovation to the under-served masses of Pakistan. The company has picked up two Universal Service Fund projects in order to provide connectivity to the yet unconnected in the remotest areas of Pakistan. It aims to invest strongly for further network expansion into the rural areas and for the rollout of third generation of mobile technology (3G) in Pakistan.

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SWOT Analysis An overall evaluation of Telenors Strengths (S) Weakness (W) Opportunities (O) and Threats (T) are as follow: Strengths Network quality & design Superior customer care Financial Strength Excellent Coverage & Distribution. Commercial Launch of LDI & mobile services Contract with Siemens & Nokia Brand image of Quality PTA initiatives E-commerce usage. Weaknesses Relatively low market share Low profit margins Negative cash flows in the initial years Opportunities Favorable Macroeconomic indicators low cellular market penetration Inefficiency & poor performance of other mobile networks Co branding e.g. Ufone with ABN AMRO
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Strategic Alliances & Infrastructure Sharing Facilities International Mobile Equipment Identity System Threats Rolling Customers Privatizations & deregulations- increased competitions. Grey Traffic MNP mobile number portability Wireless technology at boom Public pay phones & calling cards usage where network is not available Propagandas attacking brand image Strengths Weaknesses

Opportunities

SO Strategies Introducing 3G service Make the post paid package more attractive

WO Strategies Diversifying into similar industries e.g. DSL services More attractive prepaid packages

Threats

ST Strategies Co branding with companies in other industries e.g. Banks Use other mediums of promotion other than conventional advertising

WT Strategies Protect image through constant CSR efforts Capitalize and promote EDGE technology

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BCG Boston Consulting Group is used to help corporations with analyzing their business units or product lines. This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis. This BCG matrix is with respect to the competition that exists for Telenor in the telecom industry. This includes the following mobile operators: Mobilink Ufone Warid Zong

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The reason why all the companies are place in either question mark or star is that it is a growing industry and overall the market share is increasing however individual players may not be doing well. The reason why telenor and Ufone are placed in stars is that their relative market share is increasing which is visible by their sales and ARPU. Mobilink although very old in the market is now losing its relative market share to both Ufone and Telenor. Mobilink is now investing in its brands and have engaged in price wars to stay competitive and regain its market share. Same is true for Warid and Zong, the only reason why they are placed in question mark is that the overall industry is growing however their individual performance has been poor over the years. Ufone has changed its strategic policies. It has gone through rebranding and emerged as a more successful company. Now if we talk about Telenor ,it has gained a favourable position in the industry through effective advertising and packages. It can also be attributed to effective utilization of its Human Resource to gain a competitive advantage in the in the industry.

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FUTURE OUTLOOK
Following can be the future plans of action that Telenor can pursue in order to ensure sustainable growth: Improve network quality to make it a sustainable competitive advantage Develop an employee exchange program for enhanced employee motivation Establish a coordination department/integrated IT system for effective communication Introduction of employee stock options Quota for the disabled people for greater CSR and diversity

Building an organization with competency, capabilities and resource strengths Developing Technical Know How in Employees Developing budgets to steer ample resources into critical value chain activities Creating strategy supportive policies and procedures Instituting best practices and a commitment to continuous improvement Installing support systems and Value added Services Maintain low cost

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