Ooredoo Strategic Planning - Case Study Example

Ooredoo Assignment 2 Hammad Al-Enazi 60072543 Omar Sabahie 60059663 Mohammed Abdulrahman 60070462 Amna Al Abdulmalek 60064803 MN2600-3: Strategic Management Instructor: Melanie Dunsmore November 20, 2014 Table of Contents Executive Summary ………………………………………………………………………………….. Introduction 4 Analysis 4 Vision / Mission Analysis 4 Objectives 5 External Environment 6 Technological 6 Economic 6 Legal / Political 7 Socio-cultural 7 International 8 Industry Environment – Porters Five Forces 8 Internal Analysis 9 Culture and Climate 9 Resources 10 Financial Analysis (MorningstarR , 2014) 11 SWOT Summary 11 Options 12 Option 1 12 Option 2 12 Choice – what we are proposing 13 Action Plan 13 Introduction 3 Analysis 4 Vision / Mission Analysis 4 Objectives 4 External Environment 5 Technological 5 Economic 6 Legal / Political 6 Socio-cultural 7 International 7 Industry Environment – Porters Five Forces 7 Internal Analysis 9 Culture and Climate 9 Resources 9 Financial Analysis (MorningstarR , 2014) 10 SWOT Summary 11 Options 12 Option 1 12 Option 2 13 Choice – what we are proposing 13 Action Plan 14 Executive Summary Company management is a key to success and growth of any business. Proper management is attributable to employee output and generally market growth. Ooredoo Company has been an icon of business growth since its initiation until now. The company has generally transited from meager income generation to what it stands now as a multibillion income generating company. This growth and transition to greatness has been attributed to good management and growth strategies that has been achieved through strategic plans over time. Ooredoo has continued to enjoy large market share in the telecommunication sector since its initiation way back in 1949. Regardless of the fact that the company enjoyed zero competition for a period of 5 decades, good planning cannot be overlooked as a factor that led to its growth. In the current times where massive competition in price and supply, the company has not lagged behind and it continues to enjoy a significantly ample market share. This paper will focus on the strategic management plan over time that has seen the rise of Ooredoo Company to its current state. The paper will analyze the company’s mission, vision and how this has guided the company to strategic growth. Emphasis will be laid on financial management, interplay of internal and external; factors that contributes to the growth of the company. The paper will also attempt to recommend future actions to the company in accordance to the analysis that the paper will focus on. Introduction Ooredoo started in 1949 under the name of Qatar Telecommunicating company (QTEL) it was the only Telecommunicating company in Qatar for five decades (Ooredoo, 2014). Moreover, it was the only company which provides this kind of service in Qatar, from that they get a monopoly advantage over the customers, which helped them to rapidly grow their business. Nowadays Ooredoo offers all kind of services and products to their customers like mobile services, wireless services, wireline services, content services and many other bundle offers of products and services (Ooredoo, 2014). QTEL changed its name to Ooredoo in February 2013 to be worldwide company where they have succeeded serving in over 10 other countries beside Qatar. Some of these countries are Iraq, Oman, Sudan, Spain among others v. Analysis Vision / Mission Analysis Ooredoo’s vision massage that they communicate to their customers is “Enriching people’s lives as a leading international communications company”. (Ooredoo, 2014). Ooredoo has a strong belief that their customers’ need the very best technology that the company can offer in the telecommunication sector. So they are keeping in touch with the technology changes, acquire it and offer it to their customers. Ooredoo mission is based on a strong that by stimulating the human growth, the society can grow as well and they have doing that by: 1 Help the youth-teens to achieve their very best possible potential by offering them the necessary technology for that growth. 2 Trying to locate the communities with less to no access to the telecommunicating world, and provide their services to them. 3 Recognition and respect of women and help them to develop themselves in the society. 4 Help the economy grow by providing support to the new entrepreneurs and the new business, to help them benefit the society (Ooredoo, 2014). Objectives Ooredoo hopes to achieve in next few years to build their relationship with their users and partners in a caring, connecting and challenging way. That also clears from their slogan which is called in Arabic "Lintawasal" in English "To Communicate" (Ooredoo, 2014). Caring Connecting Challenging That mean Ooredoo will always look to be supportive, respectful and responsible their customers and users For example: Branches everywhere in Doha That mean Ooredoo will look to be communicate with users, working together in a collaborative way For example: Customer Care service That mean Ooredoowill always look to improve and make a difference in every service they provided to the customers For example: Nojoom Service (Ooredoo, 2014) To reach this objective they need some strategic goals to support them and make them improve during these years. Strategic goals will be the following: Differentiate on customer experience: Ooredoo differentiates itself by delivering a market leading customer experience that makes it stand out from its competitors. Strengthen our foundations: Ooredoo is increasing their productivity, developing the people and improving their ability to generate revenue and profit out of what we do. Invest in new growth areas: Continue to invest in new businesses as well as emerging innovations that provide growth opportunities (Ooredoo, 2014). External Environment Technological Qatar has now become one of the best places in the world to adopt technology and invest into its development; this can be seen from the number of projects which is supported by the state. Ooredoo has always tried its best to keep up with the technology which is supported by the state of Qatar (Hui, 2010). But, if we compare it to its competitors such as Vodafone (The only competitor in Qatar), Ooredoo is very active in regulating and implementing the use of fiber optics and 4G so that communication and knowledge can be easily accessible at a greater speed (Hui, 2010). This technological advancement also made it easy for the marketers to identify the right target market to advertise. This will help them when they are marketing events to different group. Economic Qatar’s economy has been a growing economic in many fields such as trade, hospitality, construction, transport and communication, financial, real estate, education and business services. This huge economic growth is a reason for the increase in population in Qatar (Oxford Business Group, 2007). Ooredoo always works for economic growth in a Qatar. It sponsors local students and provides them educational services (From that they support the Qatarization). Ooredoo also sponsors many events which take place in Qatar such as Sports Day (Oxford Business Group, 2007). One of the major and very well-known sponsorship of Ooredoo is the football club Paris Saint-Germain which owned by Qatar Sports Investments. Ooredoo invests in small and big new business entrants and helps Qatar government financially. Legal / Political As the country is monarch rule, the policies are mostly stable and encouraging innovations. Though the foreign policy of Qatar might be questioned by the internal politics is stable. The government is very supportive in organizing different events and conferences. Moreover, According to Qatar Law they have a very low tax rate in the world (Oxford Business Group, 2009).. Ooredoo as we say before is owned by state of Qatar, there are some political forces on Ooredoo which is essential for them to apply in their organization such Qatarization Policy. According to this policy, Ooredoo must have appointed percentage of local employees in the company (Oxford Business Group, 2008).. Ooredoo banned some service and website such as some fake website which is stole user's money and some fake numbers. Socio-cultural Qatar is one of the most diverse countries with population from different countries and still the diversification is continuing, despite Qatar being highly diverse, the Qatari or Islamic culture is strongly followed and obeyed by all the residents along with the citizens. This is where Ooredoo excels. It tries its best to reach and to connect with their customers with many advertisements in YouTube. Uploading pictures in Instagram, which includes promotion or simply any picture which relates to the customers interest, All advertisement are use with ways related to the Qatari cultural by use some Qatari words such as Hayakm, Lenatwasal, Falla etc (Oxford Business Group, 2008).. Moreover, on Facebook Ooredoo used it for customer’s feedbacks, hottest news and services available. International Ooredoo in February 2013 to be worldwide company where they success and serving in over 10 other countries beside Qatar, some of these countries are Iraq, Oman, Sudan, Spain among others (Ooredoo, 2014). The first step before they move to those countries is change the name from QTEL to Ooredoo which is making the company more worldwide. They start to be a good in competitions with other companies in these countries with offer a high quality services with a cheaper price and same or better quality with make the one of the best companies in the world. Industry Environment – Porters Five Forces Bargaining Power of Suppliers: In the past Ooredoo has low bargaining power of suppliers. They have only one supplier which is Thompson Gateway, which is now substituted by Belkin which make Ooredoo now have more power because of increase the number of suppliers. Moreover, Ooredoo buys the devices such as routers and decoders from Belkin. They can buy these products from Huawei which will give them more control (Ooredoo, 2014). Bargaining power of buyers: In the past Ooredoo is a major buyer for any company that provides technical solutions related to telecommunication in Qatar which reduces the bargaining power of buyers in Qatar. Vodafone’s entry into the market and increase in buyer’s power increased the competitions in Qatar. This is because they have interesting packages and offers for mid-range to high-range customers (Ooredoo, 2014). It is very easy for the customers to switch. Rivalry among existing competitors: Currently in Qatar there is only one competitor which is Vodafone. Vodafone has tried to attract Ooredoo’s customers by use cheaper price, loyalty programs and some discount offers. But because of a bad connection when we compare it with Ooredoo, that make Vodafone lose a trust from many customers in Qatar. The dangerous thing for Ooredoo is the lowest price of Vodafone which make them sometimes to reduce the price and increase the offers for customers (Ooredoo, 2014). Threat of New Competitors: In the market there is no sign of new competitors. But soon, there will be more competitors as the market is growing and population is also increasing and they seek more options with difference in their preferences (Ooredoo, 2014). Moreover, In Qatar will host the World Cup 2022 which will keep eyes of many competitors to start in Qatar soon. All of these facts give us a hunch that there will be more competitors in Qatar. Threat of substitute products: There is high threat and low threat in this case because as far as the mobile network connection is concerned, the threat is high because Vodafone is there to give the customers the service that Ooredoo provides. Also, some apps such as Viber, WhatsApp and Ansa are making some threat for the company because it’s free and have a high quality of connection (Ooredoo, 2014). On the other hand, when it comes to cable TV, internet connection and landline connections, Ooredoo is the only company which provides these services to its customers in Qatar. But The Pearl Qatar is the only place where Vodafone has provided the internet connection and landline services in apartments which will open the way for them to cover some areas soon. Internal Analysis Culture and Climate Ooredoo is a diversity organization which has an extensive customer orientation culture. The diversity in the organization will help Ooredoo to have knowledge and information exchange among the employee in order to create a professional and efficient organization (Hui, 2010). Moreover, customer satisfaction is the most valuable interest in order to attain the customer loyalty. Another part of the Ooredoo climate, it focuses to hire and develop young locals to have a mix of new generation with experienced employee and inspire the employee with the team work spirit. Another organization culture, Ooredoo is always up to date with the technology and always changing it looks. For example it always changes the branch’s decoration and theme and it makes sure all branches have the same set of decoration and theme color. Resources Tangible Resources: 1 Financial Resources: as mentioned previously in the report Ooredoo started since more than sixty years and was the only service providers and this is the reason of why Ooredoo has grown internally and externally. Ooredoo has a financial resource from the service provided in Qatar and the services provided in the other country as well as Ooredoo investment (Hui, 2010). 2 Physical Resources: Ooredoo physical resources are the buildings, telecommunication stations, satellite stations, signal enhancement station and Ooredoo self-service machines which are distributed around the country (Ooredoo, 2014). 3 Human Resources: Ooredoo has a massive number of employees and they also use outsourcing contract with Starlink Company to use the staff in call center and branches as well and this is a type of cost cutting (Ooredoo, 2014). Intangible Resources: 1 Technological Resources: Ooredoo has an internal software system for the employee in order to provide customer the best and quick service, hot line and the self-service machine (Ooredoo, 2014). 2 Innovation resources: Ooredoo App for smart phone which customer can apply, pay and receive many services from the App (Ooredoo, 2014). 3 Reputation Resources: Ooredoo has a good reputation especially after changing the name from QTEL to Ooredoo and expand internally and internationally (Ooredoo, 2014). Financial Analysis (MorningstarR , 2014) SWOT Summary Strengths Weaknesses Ooredoo enjoys an already existing market since its conception. The company has a well established distribution and sales network -The establishment of small business units which could not be economically viable - future profit decline weakens the economic backbone of the company Opportunities Threats The growing economy of Qatar presents an opportunity for the company to grow Exploration and establishment of new markets where the company can enjoy a share Introducing new products into the market would provide a competitive advantage to other competitors The company is enjoying an increasing level of income which can be used in venturing into new markets and introducing new products to consumers. Rising cost of raw materials possibly threaten the amount of profits to be realized. External factors such as competition threaten the market share that the company enjoyed for a very long period Increased cost of raw materials means the company will be obliged to increase the cost of its products which could as well threaten a decline in the market share (Ooredoo, 2013) Options Option 1 The SWOT financial analysis provides a basis on which Ooreddo Company can revise the strategies on it management profile to maximize on the usage of opportunities and strength and to manage the threats and weaknesses. For instance, one of the major threats is competition from small and middle sized enterprises. One of the strategies that the company can focus on to regulate of reduce this threat is to seek for partnering with small enterprises through agency recruitment. This will ensure that other small business enterprises do not threaten the market share of the company. In the case of increasing cost of raw materials, the company can seek partnership from Asian companies especially those from China who can manufacture the products on their behalf at much cheaper cost. In this way, the company can significantly reduce the effect of increased cost of production which threatens it profit margins and overall growth of the company capital. This is a strategy that many companies including European and American based companies have sought refuge in. Option 2 The company can seek to establish small retail units and as well diversify on the range of products in the market. Competition from cheap products in the telecommunication sector especially from Chinese based companies is a major threat to the growth of the company. In this regard, the company needs to maintain it s market share by establishing a wider range of products which can effectively match competitor prices. This way, through the well established distribution and sales network that the company enjoys, consumer interest can be captured satisfactorily. Choice – what we are proposing As mentioned, the company needs to utilize it prior establishment and existent to rule the telecommunication sector. Its well rooting in this sector is the major strength whose importance in this regard cannot be over emphasized. Our proposal is that the company should consider establishing a collaborated manufacturing of its products in China where the cost of production will be considerably low. In this form, the company will continue to supply its products at much cheaper price even when the cost of raw materials within the country continues to escalate. We also propose that the company consider increasing the range of products it offers to consumers. This range must incorporate the big range of consumers from the low earning to top earning consumers. In this manner, the company will continue to enjoy a big, market share which cuts across people from nearly all socioeconomic stature. Our last proposal is the establishment of small retail enterprises either through agency recruitment of direct establishment. This will enable the company to reach to all its potential consumers and will therefore; enhance its fighting of competition from other companies and small business establishments. Action Plan Our proposed action plan for the company focus on overall management of threats and weaknesses based on the SWOT analysis conducted. First, the company needs to shift its manufacturing operation from within to a country where production is considerably cheaper, e.g. China. The management needs to seek a well researched proposal for this strategic action if profit making is a priority to the company. Secondly, the company needs to seek increasing their range of products currently in the market today. This is a strategic action plan that will enable the company in retaining its market share as well as establishing new markets which could be unexplored. Lastly, the company need to consider increasing and setting up new retail enterprises which will target the consumers who may be targeted by small business enterprises. This will enable the company to competitively win this group of potential consumers. References Hui, P. (2010). Africa and Middle East Telecom Monthly Newsletter June 2010.Boston: Information Gatekeepers Inc. MorningstarR. (2014). Ooredoo QSC GDR. Retrieved from http://financials.morningstar.com/ratios/r.html?t=QTTZF Ooredoo. (2013). Consolidated Financial Statements. Retrieved from http://www.ooredoo.com/en/media/get/20140304_Ooredoo-FS-English-2013.pdf Ooredoo. (2014). Financial news. Retrieved from http://www.ooredoo.com/en/section/investor-relations/financial-news Ooredoo. (2014). Who we are. 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