THE COPPERBELT UNIVERSITY

SCHOOL OF BUSINESS

NAME : DABBYSON ZIMBA

CODE : BS 450

COURSE : STRATEGIC MANAGEMENT

PROGRAM : BACHELOR IN ACCOUNTANCY

LECTURER : DR. MWIYA

INTRODUCTION

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TABLE OF CONTENTS

CONTENT PAGE

INTRODUCTION……………………………………………………………………. 3

BACKGROUND……………………………………………………………………… 4

FRAMEWORK………………………………………………………………………. 5

DEFINING STRATEGY, STRATEGIC STATEMENT……………………………. 6

STRATEGIC CHALLENGES AND OPPORTUNITIES……………………..7

Zamtel in Huge losses, firm is technically insolvent…………………… 7

Issue…………………………………………………………………… 7

Recommendation……………………………………………………. 8

High Operating costs……………………………………………………. 8

Recommendations…………………………………………………….. 8

CAPABILITIES AND ADVANTAGE…………………………………………. 10

Zamtel‟s Generic Dynamic Capabilities……………………………………….. 10

Sensing capabilities………………………………………………………… 11

Seizing opportunities………………………………………………………. 12

Re-configuring capabilities……………………………………………….. 13

FACTORS THAT HAVE SHAPED ZAMTEL‟S GROWTH……………………… 14

PEST ANALYSIS…………………………………………………………….. .. 14

ZAMTEL‟S COMPETITIVE POWER IN RELATION TO RIVALS……………. 16

BCG Matrix……………………………………………………………………. 16

GENERIC COMPETITIVE STRATEGIES …………………………………….. 18

Zamtel‟s generic strategies………………………………………………….. 18

Cost Leadership Strategy……………………………………………….. 18

Differentiation Strategy…………………………………………………… 18

Steve Job‟s Competitive Quadrants………………………………… 18

Focus Strategy…………………………………………………………… 18

CONCLUSION…………………………………………………………………….. 19

APPENDICES…………………………………………………………………….. 21

Appendix A: SWOT Analysis……………………………………………….. 21

Appendix B: VRIO Analysis………………………………………………… 21

Appendix C: Mendelows Stakeholder…………………………………….. 21

REFERENCES………………………………………………………………….. 22

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INTRODUCTION

Zamtel, whose official name is Zambia Telecommunications Company Limited, is a government-

owned telecommunication service provider in Zambia. It was established under the Companies

Act Chapter 388 of the Laws of Zambia. The Corporation falls under the jurisdiction of the

Ministry of Transport, Works, Supply and Communications pursuant to Gazette Notice No. 183 of

2012 and the Statutory Functions Act No. 4 of the Laws of Zambia.

The Zambian government sold off 75% of Zamtel shares to the Libyan company LAP Green

networks to keep Zamtel from shutting down after plans to recapitalize it failed. The shares were

sold for $394 million despite several attempts from citizens to block the sale on claims that the

company was still viable.However, this sale was reversed by the recent government under the

Patriotic Front (PF) following allegations that the company was fraudulently sold.

According to an Article entitled, „Zamtel in huge losses, firm is technically insolvent-Auditor

General,‟ since LAP Green networks‟ exit in 2012 the corporation has been making losses and is

technically insolvent. (Auditor General‟s report, 2014)

Today, the IMF has demanded the sale of Zamtel.

The international monetary fund is prepared to lend

Zambia a total of US$ 1.2 billion on condition that the

country sells the company. The IMF has made this

prerequisite because of the amount of money which

is being used to try to recapitalize the loss making

firm. (www.lusakatimes.com)

The Corporation has 36 regional outlets countrywide

(See Appendix B) as noted in the table below.

Regional Outlet (Province) Number

Lusaka 8

Central 3

Eastern 5

Copperbelt 10

Southern 4

Muchinga 2

Luapula 1

Northern 1

Western 1

North-Western 1

36

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BACKGROUND

Its inception is traced back to 1913 when the first telephone exchange was installed in

Livingstone. But, it was in 1994 when Zamtel got its name after an act of parliament was passed

to liberate the telecommunication industry. The liberalization of the telecommunication sector in

1994 led to the splitting of the Zambia Posts and Telecommunications Company into two

separate entities namely, the Zambia Telecommunication Company Limited (ZAMTEL) and The

Zambia Postal services Corporation (ZAMPOST)

Since inception in 1994, the corporation has raced through ups and downs. The corporation has

gone through phases and milestones including: Zamtel introduced analogue mobile telephone

service in 1995 with a cod 095. In 2003, Zamtel launched the mobile GSM service by late

President Levy Patrick Mwanawasa in Chipata, later in 2010 the 75% of the company were sold

to LapGreen, in 2011 Asymmetrical digital subscriber line (ADSL) Service was introduced on the

Zambian market offering fixed broad band internet service to the home and office and later in

2012, the sale of Zamtel‟s was reversed to 100% government ownership. (www.zamtel.com)

Zamtel earlier this year in May increased its ADSL internet prices which affected both the home

and business ADSL services. However, TechTrends (2016) claim that “the new ADSL product set

are better than the earlier ones because they are future focused with an emphasis of what the

customer can get out of the service”

The corporation has grown to be a pioneer of the telecommunications industry in Zambia by

providing a cost effective, comprehensive and high quality telecommunication facilities and

services to its customers. (www.ebizguides.com)

The corporation offers a number of products and services. These comprise: Landline, mobile,

internet & data, Zamtel LTE, and roaming services.

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FRAMEWORK

This strategy paper seeks to address the Case study of Zamtel in the following manner: To begin

with, a highlight analysis of the strategic challenges facing Zamtel in 2016/17 and appropriate

recommendations will be provided. For the identified opportunities available, emphasis on the

need to consistently sense, seize and take full advantage of. Secondly, the effects of key drivers

of change in the macro-economic environment in which Zamtel operates will be scrutinized and

the level of urgency the firm should implement when best addressing the effects identified using

the PEST analysis.

One of Zamtel‟s biggest challenge is its state of instability in the environment (see appendix A),

Bruce (2011 pp.20-29) alludes that if this trend such as this continues, strategic issues will

emerge more frequently that will challenge the manner that corporation formulates and

implements strategy. For this reason, this paper provides strategic models or solutions to best

help address these challenges and road-map the corporation‟s strategy in the long term.

Furthermore, the paper will stress on the overall status of key product (and service) lines using

the Boston Consultancy Group (BCG) Matrix to decide strategically where resources are to be

invested. This is anchored on special knowledge that strategy portrays the aspect of a desired

future state and the necessity of the organization to implement course of action now and

effectively manage its scarce resources to materialize its aims.

This paper also highlights Four (4) key criteria by which Zamtel‟s capabilities can be assessed

regarding providing a basis for achieving sustainable competitive advantage using the VRIO

Analysis (See Appendix B). In summing up, it tweaks all possible practical recommendations for

its long term strategy by engaging in MENDELOWS Stakeholder and SWOT analysis.

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DEFINING STRATEGY, EXPLORING ZAMTEL’S STRATEGIC STATEMENT.

In assessing strategy this paper supports Alfred Chandler‟s view who defines it as:

“The determination of the long run goals and objectives of an enterprise and the adoption of the

course of action and allocation of resources necessary for carrying out these goals.” (Johnson et

al 2014)

A strategy statement is a summary of an organization‟s strategy consisting of three main parts:

goals (reflecting mission, vision or objectives), the scope or domain of the organization‟s activities

and the firm‟s competitive advantages or capabilities (that is, how it achieves its objectives by

being different, superior and better than its competitors.)

GOALS

This is what the organization seeks to achieve. it consists of missions, visions and objectives.

Mission

An organization's mission is the overriding purpose of the organization. It such a huge „ask‟

of what kind of business the organization is into. A mission statement aligns managers to

be focused on what is central to their strategy in the sense that it relates to goals.

Zamtel's mission is to provide cost effective, relevant total communication solutions and

services that consistently offer unrivaled customer experience through the use of cutting

edge technology and customer focused marketing whilst maximizing shareholder value.

Vision

This as well relates to goals, and refers to the desired future state of the organization. It is

an aspiration which help rally the energy and passion of organizational members of staff.

Zamtel's vision is to be the leading communication services provider of choice.

Objectives

An objective is a specific result that an organization aims to achieve within a time frame

and with available resources. Objectives are specific and easier to measure than goals.

Objectives are basic tools that underlie all planing and strategic activities. They serve as

the basis for creating policy and evaluating performance. (www.businessdictionary.com)

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In Zamtel's article entitled „Zamtel launches all networks offer,‟ it‟s objective is to make

communication affordable for everyone.

SCOPE

An organization's scope or domain refers to three (3) dimensions : customers (or clients), the

geographical location of the organization and the extent of internal activities. Zamtel's scope is to

offer the all networks promotion to all zamtel subscribers and non subscribers who wish to join

the network countrywide. This is purposed to enable its customers to call any network, thereby

suiting everyone‟s pocket and non-subscribers wishing to join the Zamtel community.

Therefore, a summary of Zamtel‟s strategy reflects:

“To be the leading communication service provider and make communication

affordable to citizens across the country by providing cost-effective relevant total

communications solutions and services through using cutting edge technology and

customer focused marketing.”

STRATEGIC CHALLENGES AND OPPORTUNITIES FACING ZAMTEL TODAY

ZAMTEL IN HUGE LOSSES, FIRM IS TECHNICALLY INSOLVENT

The term “strategic challenges” refers to those pressures that exert a decisive influence on the

organization‟s likelihood of future. (http://www.baldrige21.com). Strategic challenges are

externally driven. However it is imperative to note that in responding to external strategic

challenges, a corporation may face internal strategic challenges.

The corporation has encountered numerous strategic challenges, both internal and external.

Zamtel has struggled ever since 2011 when the Libyan investor Lap Green was forced to exit the

firm, and is currently still in a dilemma. Internal strategic challenges relate an organization‟s

capabilities or its human or other resources.

Issue

Since 2012, the corporation has been making losses and is technically insolvent, according to the

2014 Auditor General‟s report. This is due to the escalating drop in revenues since its

repossession in 2012 from K573,120,000 (old kwacha) to K390,381,000 (old kwacha) in 2012.

Zamtel has also suffered a decline in the shareholder‟s funds from K624,258,000 (old kwacha) to

K385,980,000 (old kwacha) in 2011 and 2012, respectively.

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More to this, the company‟s financial statement showed a current ratio of 0.62:1 contrary to the

recommended 1:1 ratio, negative working capital, lack of continuity plan in 2014, and a review on

Zamtel‟s assets register revealed that the corporation had one hundred and fifty (159) properties

without title deeds contrary to the Lands Act No.29 of 1995 of the Laws of Zambia (see Appendix

C). In 2016, the huge losses challenge still haunts the corporation.

Meanwhile, one of most external strategic challenges facing Zamtel today is, the risk of being

sold again. Today, the IMF has demanded the sale of Zamtel. The international monetary fund is

prepared to lend Zambia a total of US$ 1.2 billion on condition that the country sells the

company. The IMF has made this prerequisite because of the amount of money which is being

used to try to recapitalize the loss making firm.

In the recent, the government has transferred management and operations of the corporation to

the Industrial Development Corporation (IDC) after its failure to secure a $300 million USD

investment in the company to make it viable and be able to compete with MTN Zambia and Airtel

Zambia.

However, its efforts to revive the corporation has proved futile. It is against this backdrop that the

International Monetary Fund (IMF) is prepared to lend the Zambian government a US $1.2 billion

economic bailout on condition the country sells ZAMTEL. (Lusaka Times Newspaper: IMF

Demands sale of ZAMTEL, October 28, 2016.)

This elucidates Zamtel‟s inability to adapt to the ever changing environment and the intense

competition in this market. In this most lucrative markets, every industry player must keenly

participate in birthing, nurturing and maturing its survival skills. This is so because, competing

and potential rival companies are launched with various forms of advertising, promotion and

intense price wars as they jockey and tactically battle each other aimed for buyer patronage. The

corporation has not been sensing and seizing opportunities and possible threats in the

environment to a greater extent. For this, it continues to be the country‟s smallest operator with

less than two (2) million customers. (www.ukzambians.co.uk)

Recommendations

In this modern age of extreme competition in which combined pressures of global completion,

technology, interconnectivity and economic liberalization make life for organization tougher than

ever before (Huyett and Viguene 2005). The task of every manager is to realize the goals of the

organization achieving outstanding performance in the unit they are responsible for.

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According to Waal (2007), there is emphasis on responsibility managers to, “Adapt faster and

faster to growing demands for flexibility and speed and to compete simultaneously on the basis of

development cycle time, price, quality, flexibility, fast and reliable delivery and after sales

support.”

Zamtel must implement a strategy renewal program. This requires the corporation moving from a

narrow focus on operations and structure to a comprehensive view of alignment. However, when

competition increases, many firms change their structures to concentrate on a few profitable

activities, thereby inadvertently compromising their intended strategy (Dale E, 2009 pp. 3).

Currently, the privatization of zamtel is recommended. This will undoubtedly imbue the company

to evolve from the loss making firm that it is today (as evidenced from the 2014 internal Auditor‟s

report) to profit making corporation. Lest, its competition with likes of the foreign private owned

competitors: Airtel, MTN, and Vodafone Zambia is likely to continue to be a „hard-to-win battle.‟

HIGH OPERATING COSTS

One of the constraints facing the corporation currently is, high operating costs. Goldratt, (1990,

pp.56-57) alludes that a constraint is anything that limits a system (corporation or agency) in

reaching its goal. For the company to survive into the foreseeable future, it is clear that a

reduction on expenditure is necessary. Zamtel‟s almost 89% of its operating costs is attributable

to staff costs. Consequently, this is negatively affecting the corporation‟s profits.

Recommendation

The corporation‟s management can consider downsizing labour by laying off overload labour.

Except, it is important that Zamtel ensures that implementations of downsizing management must

be beneficial to business competitive advantage and performance (Cheng-Fei 2008 pp.376-384).

This entails that it must not affect the efficiency and effectiveness of the corporation and its ability

to achieve sustainable competitive advantage (See Appendix B).

Furthermore, It may also consider low cost contracts, that is, recruiting of labour on „a-need-arise‟

basis as this will cut on idle labour costs. More to this, Zamtel might as well implement job

rotation. This strategy allows two(2) or more employee to split the traditional specific number of

hours in a week. For instance, employee can work from 7 am to 1pm and another from 1pm to

6pm implementing a hourly rate.

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Greenhallgh et al (1988) pin points other forms of downsizing that can reduce expenditure. These

comprise: demotion of supervisory staff, reduction of promotional activities, salary freeze,

curtailed working hours, no paid leave, and early retirement with preference packages.

CAPABILITIES AND ADVANTAGES

Nicholas et al, (2004) asserts that organization capabilities refers to an organization‟s ability to

perform a coordinated task, utilizing organizational resources for the purpose of achieving a

particular end results. Zamtel‟s has pledged continuous improvement to give its customers the

best communication tools and ensure that they have access to high quality, affordable and

competitive products and services through the uses of technology innovation.

Zamtel‟s strategic statement is to be the leading communication service provider and make

communication affordable to citizens across the country by providing cost-effective relevant total

communications solutions and services through using cutting edge technology and customer

focused marketing.

The corporation has added advantage of having a physical presence in about 36 regional outlets

countrywide (See Appendix B). The fact that Zamtel has at least an outlet in every province

remains a ubiquity icon of telecommunication provider to its customers across the country. More

to this is, it is through its variety of products and services offering that the corporation has thrived

to develop its capabilities since its inception.

ZAMTEL’S GENERIC DYNAMIC CAPABILITIES

Over time, each organization needs to balance environmental conditions, its strategy to seize

opportunities and counter threats in the environment, and its capabilities to implement such

strategies. If strategies are not in line with conditions of the environment, strategic gaps impede

the ability to achieve organizational objectives. (Bruce E., 2011).

Dynamic capabilities are the means by which an organization has the ability to renew and

recreate its strategic capabilities to meet the needs of the changing environment (Johnson et al,

2014). These capabilities are distinct and suitable to operate efficiently now except may require

transformation to sustain superior performance in the future.

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1. Sensing Capabilities:

Demands that organizations are constantly scanning and exploring the new

opportunities across markets and technology.

Recently, ZAMTEL has launched 4.5G LTE-2300 network on the Copperbelt Province in

its quest to improve communication services, pushing forward its technology vision by

deploying state of art, cutting edge 4.5G long term evolution communication (Techtrends,

2016). This is was after a conclusive research conducted by the corporation.

According to an article, “Zamtel launches 4.5G on the Copperbelt,” the successful

implementation of this project by the company signifies the transformation efforts of

the ICT industry on the Copperbelt and re-defines internet services that allows the

Zamtel to offer innovative high-definition data-hungry services to its subscribers

(www.zamtel.com/news).

Zamtel understand well the enabling role that partnering plays in Strategy. Because of

this, it is evident that the company is not working in isolation as it continues to sense

and scan for new innovation opportunities. This is evident in a statement:

Tian Rui, Huawei Technologies Zambia Ltd country

Director said that the company was excited about the

official launch of 4.5G LTE-2300 which establishes the

world’s most advanced LTE network.

She further added that Huawei, together with the

Government Republic of Zambia and Zamtel plan to roll

out a world class network throughout the country

ensuring that the customers get access to high quality

internet services and affordable prices. (Techtrends,

2016)

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2. Seizing Opportunities:

2.1 Zamtel‟s All network offer promotion

Zamtel is addressing new opportunities through new customer services,

processes and activities. One of the major challenges that subscribers countrywide

are facing is the high rate of communicating from one network to another.

The corporation has since launched „All networks offer‟ that seeks to address the

challenges of the high cost of communication in the country especially across the

networks. Zamtel‟s pursuit to come up with this promotion aims at suiting every

person‟s pocket has being a „PLUS‟ on the company‟s market now.

Despite its competitors also offering similar promotions such as: Airtel‟s

Soche‟s “as well all networks pack” and MTN‟s Spaka pack, yet Zamtel‟s “All

networks offer” is the most affordable of the three options. (See the all-net-rates

below)

COMMENTS:

Daily bundles: Zamtel has the least priced daily bundle of K1, and beats Airtel‟s K2

package. The Zamtel‟s K5 regarding data bundle is the best option as it gives 50MB,

which one would pay K10 for on MTN and K15, beating Airtel which gives 30MB on its

K15 daily pack. Conclusion. Zamtel wins

Weekly bundles: Zamtel has least priced at K5.

Monthly bundles: Zamtel again has the least pricing for much out their bundled

packages and win across the board.

Source: Techtrends.com , 2016.

TABLE 1.0

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2.2 The CLIQUE

ZAMTEL has continued to

search and seize new activities

to excite and happy its

customers. Apart from the

„Keep fit sporting campaigns‟,

the company has in the

recent launched yet another

exciting Brand Campaign

whose aim has been to

engage and have an

emotional attachment with

customer.

According to Zamtel‟s Article entitled the “CLIQUE”, the new thematic campaign

is called “CLIQUE” which stands for a circle of friends, a group, a club, a society

of like-minded individuals with shared interest. It seeks to engage universities

and colleges and bringing them on board the “Zamtel Clique”

This innovative idea pursues to trap students through its warm invitations of any

student from UNZA, Copperbelt University, Evelyn Hone, NIPA or any other

university or college has somewhat skyrocketed its competitive advantage over

Vodafone Zambia ltd…not to mention that university and college students are its

top priority.

3. Re-configuring Capabilities:

New products and services and processes may

require renewal and re-configuration of

capabilities and investment in new technologies

(Johnson et al 2014)

Zamtel has continuously searched for practical means its subscribers canaccess

their landline and mobile accounts more easily, safe and efficiently. The

corporation has since launched its latest innovation-the web-based Zamtel

Selfcare portal (somewhat a transformation of its medieval system). This

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innovation enables its customers to access landline and mobile accounts from

the convenience their offices or homes at www.selfcare.zamtel.co.zm.

FACTORS THAT HAVE SHAPED ZAMTEL’S GROWTH

The environment is what gives organizations their means of survival. It creates opportunities and

also, it presents threats (Johnson, G. 2014, pp.34). In order to understand the strategic position

of an organization, there are a number of factors that have to be taken into account at the outset

of strategy development. For instance, Interorganizational strategies are pursued to mitigate the

adverse impact of external forces and thus enhance the efficacy of an organization‟s strategies

(Ford et al., 2003). At government policy level, politics and economics are inextricably linked.

Corporate strategy is not concerned with forming such policies but does need to understand the

implications the decisions taken (Lynch, 2003). These factors matter a lot when it comes to the

success of an organization.

For this, organizations should focus on those environmental opportunities. Since strategists (most

often managers) usually focus on the internal dimensions of the organization, policy change and

the volatility nature of politics in countries undergoing major policy changes, it calls for conscious

exploration of the environment outside the organization.

The factors like the political, economical, social, ecological, legal and technological changes will

influence the direction and shape of an organization‟s policies and objectives. It is with much

emphasis that such factors must be investigated in order to know the exact factors that shape an

organization‟s growth. It is vital that managers analyze their environments carefully in order to

anticipate and influence environmental change. Strategy development should be primarily about

seeking attractive opportunities in the environment in which an organization operates.

Moreover, the Zambian Government has from time to time imposed monopolistic powers ahead

of intensive competition in the market.

PEST ANALYSIS

Johan Hough et al (2011) asserts that analyzing the external environment consists of seven (7)

dimensions that focus on the company‟s industry and competitive environment within a larger

macro-environment with influences such as the economy, regulations and legislation, technology

and social cultural values and lifestyles.

Below this is a model used on Zamtel to identify the forces driving change in the industry and the

impact they dictate on the competitive intensity and ascertaining industry profitability.

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FACTOR TREND EVALUATION RANK IN TERMS

S=Strength OF IMPORTANCE

W=Weakness 1=High

O=Opportunity 5=Low

T=Threat

Political Government Funding S/O 1

Government Interference T 3

Regulatory framework (e.g. Laws) T 1

Corporate Governance issue T 2

Economic High Operating Costs T 1

Increasing Labour Cost T 1

Outstanding Debt W/T 1

Social Modern Lifestyle T/O 3

Court Cases T 1

Technological Technological innovations T/O 1

Medieval systems W 2

Research and Development T/O 1

It is evident from the illustration that the corporation is working in adverse environmental

conditions with a myriad of threats and a few opportunities. Strategy may involve interdependent

relationships among multiple stakeholders (see appendix C), it targets identifiable entities in order

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to employ scare resources both efficiently and effectively in pursuit of business objectives (Fuller

2010)

ZAMTEL’S COMPETITIVE POWER IN RELATION TO ITS RIVALS

BCG MATRIX

Currently with the huge losses and imminent decline in revenues since its inception, the

corporation is battling significant challenges that threatens its existence as the going concern. An

analysis of the business portfolio is provided below by means of the Boston Consultancy Group

Matrix aimed at profitably investing or allocating the available resources into recapitalizing

Zamtel.

There is absolutely importance in maintaining a balance within the portfolio, that is, there is

evidence if some low growth businesses that are making sufficient surplus to fund investment

needs of higher growth businesses (Johnson et al 2014 p244).

Figure 1.0

New Innovation

As the telecommunication industry is springing up as a result of globalization and advancement in

technology (see Appendix A), today‟s customers are not only hungry for voice but also high-

speed data services. Zamtel‟s efforts to launch 4.5G LTE-2300 network on the Copperbelt in its

quest to offer innovative and data-hungry services to its customers. However, currently vodafone

New Innovations

(4.5 G Launch) All Networks Offer

Examination

Council of Zambia results checking

Zamtel Prepaid

Mobile Money

services Mobile Internet

services

International

Roaming Services

Land-line services ZICT College

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has a greater market share and undoubtedly better internet speed. Therefore, Zamtel should take

advantage of its lowest prices to take a bite of a larger market share.

Prepaid Services

Porter M. (1985) reminds strategists that competitive strategy is about being different. It is a

means of deliberately choosing a different set of activities to deliver a unique mix of value.

(Johnson et al 2014 pp4). Already, Zamtel is the smallest Mobile network operator. Upgrading of

its medieval prepaid system to the latest one it is calling the „Selfcare service‟ will help capture

and grow the market share. This will undoubtedly enable the corporation compete with Vodafone

Zambia have released their My Vodafone app on Google play and App-store up for free

downloads. All recharges for data, top-ups, etc. are transacted through this magical app.

Mobile Money Services

There has been immeasurable growth in this particular niche. In spite of this, the corresponding

increase in the number of players is evaporating the profits away. Not forgetting to mention that

Zamtel has the added advantage of having physical presence or outlets in all parts of the country.

The corporation can use this competitive capability to gain courage and launch the Mobile Money

services to „happy‟ its long awaited customers. From the BCG Matrix, it is evident that Zamtel

already has the market share but it lacks is market growth.

International Roaming services

Customers pride Zamtel‟s lowest voice rates when it comes to international roaming. This allows

users to stay connected wherever they are in the world at a competitively low price compared to

other network operators. The corporation has a larger market portion, but its market growth is still

minimal. Zamtel should use competitive strategy to become a market leader in the International

roaming services.

Land-line services

The market is yielding a growing number of customers. Zamtel‟s ever evolving capability lies in

the fact that it has been the sole fixed-line service provider with approximately 80,000 lines

country-wide. Currently, the corporation is the market leader in this lucrative niche. Therefore, it is

important to pride customers‟ trust by consistently delivering excellent land-line services. Zamtel

should consider tasking its strategist to work on competitive strategies that will see the

corporation being at the top now in the future time.

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GENERIC COMPETITIVE STRATEGIES

The term „generic strategy‟ mean basic types of competitive strategy that hold across many kinds

of business situations (Porter E., 1985). He further argues that it is best to choose which generic

strategy to adopt and then stick rigorously to it.

There are three (3) generic strategies options available to strategists of a firm: Cost leadership;

Differentiation; and Focus strategy.

ZAMTEL’S GENERIC STRATEGIES

(i.) Cost Leadership Strategy:

The corporation seeks to become the lowest-cost organization in its pursuit to making

communication affordable to everyone. In its recent launch of the „All networks offer,‟ it

object is to provide communication services that will suit every every pocket.

And how is Zamtel competing with its competitors? Despite its competitors also

offering similar promotions such as: Airtel‟s Soche‟s “All networks pack” and MTN‟s

Spaka pack, Zamtel‟s “All networks offer” is the most affordable of the three options.

(See Table 1.0)

(ii.) Differentiation Strategy: Entails uniqueness along some dimensions that is sufficiently

valued by customers to allow a price premium (Will M., 2008). ZAMTEl‟s differentiation

strategy is evident in its efforts to not only differentiate but also diversify, the corporation

has 100% ownership of the Zambia ICT college, uniquely launched 4.5G LTE-2300 and

continues to offer excellent fixed landline services. (See figure 2.0 below)

(iii.) A Focus Strategy

Targets a narrow segment or domain of

activity and tailor its products or services to

the needs of that specific segment to the

exclusion of others. Zamtel‟s ultimate

capability lies in its fixed Landline

services in homes and businesses across

the country. So far, it has proved itself a

market leader in this niche. To say it

bluntly, Zamtel‟s strategy towards

landline services is termed “Strategic lock-

in”, because customers of this service

have wholly become dependent on it

beating its competitors-Airtel and MTN.

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CONCLUSION

To sum up the results from the above models it is evident that Zamtel can take re-position of

itself with the use of its capabilities as its scope in terms of various regional outlets (See

appendix A and B) and the other business units in its portfolio to continue to have sustainable

growth in the long term.

In addition to recommendations provided for the current challenging facing the corporation,

having a thorough understanding of the organization and the industry and the environment

within which it exists the corporation should also consider the following recommendations as

a way of best succeeding and gaining sustainable advantage in the long term.

I. Use of the Lower-cost leadership strategy, which has proved to be most successful

and sustainable for Zamtel. The corporation should strive to be best the sole provider

of landline services “locking-in” its customers and consistently come up with

competitive promotions like „All networks offer‟ aimed at delivering the most

affordable services beating its rivals.

II. Offensive strategies: Zamtel could opt to implement offensive strategies as opposed to

defensive. This is because the company has little to defend apart from being the

sole providers of landline services. Zamtel can launch flanking attacks on its

competitors. A flanking attack is an offensive marketing strategy used to exploit

an opponent‟s weakness. For instance, the launching of 4.5G LTE-2300 is an

attack on Vodafone and Airtel‟s 4G services. Except, Zamtel must continue to

better it and must have the lowest price tag for it.

III. Zamtel must rigorously understand its competitors‟ strategies. This will help the

corporation to adopt and stick to a single strategy aimed at avoiding being “Stuck in the

middle” doing no strategy well. It is evident that Vodafone-the mobile data giant-is a

focused strategy oriented.

So far, Vodafone‟s top priority customers are the students and working class

individuals. Zamtel can implement the use of initiatives such as the “CLIQUE” and

“Keep fit Campaigns” to trap students as well to subscribing them to the network.

IV. Deliver cost-efficient propositions which are inimitable. Zambia like other 3rd world

countries is an emerging market with relatively low quality service providers. However,

the future belongs to those who will raise the bar to benefit the country. Customer

satisfaction are means to an end and not the end itself (Muhammad 2007)

V. Harness and invest in technology; the firm should consider a strategic alliance which

reputable IT firms, for instance its partnering with Huawei in launching 4.5G LTE.

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APPENDICES

Appendix A: SWOT Analysis

STRENGTHS

Presence in all the provinces and major

districts.

Legacy of being the sole fixed land-line

service provider.

Government funded

High Growth rate and Domestic market

Cost advantage: All networks offer

WEAKNESSES

High operating costs

Large unskilled Labour force

Huge debts in loans and unpaid benefits

Little attention prioritized to Research and

Development (R&D).

OPPORTUNITIES

Growing demand

Technological Changes: Arrival of new

Technologies (e.g. 4G, 4.5G LTE, Fibre)

Unfulfilled customer need: Mobile Money,

high-speed internet

THREATS

Emergency of substitute products and

services (Data bundles preferences):

Vodafone (Z) to Zamtel

Court Cases and Bad public image: 159

Zamtel property held without title deeds.

Entry of new competitors (e.g Vodafone

Zambia)

Appendix B: VRIO Analysis

Value Rarity Inimitable Org.Support Competitive Implication

Location Presence Yes No Yes Yes Temporary Competitive

advantage

Complementary

services

Yes No No Yes Competitive Parity

Internal Operations Yes No No Yes Competitive Parity

Partnerships Yes No Yes Yes Temporary Competitive

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advantage

Innovation Yes No No Yes Competitive Parity

From this analysis it is evident that the company‟s capabilities are not dynamic for sustained

competitive advantage.

Appendix C: Mendelows Stakeholder Analysis

MENDELOWS STAKEHOLDER ANALYSIS

LEVEL OF POWER

LEVEL O

F INT

EREST

KEEP INFORMED

•Customers: Consumers of services may duck out of buying services from a company that is associated with scandals.

•Employees: Currently, the company is technically insolvent. Staff are uncertain as to whether they may be laid off. This may affect productivity and skilled Labour may opt to switch to other jobs with more job security.

MANAGE CLOSELY •Government: It posses enormous power

and control and because of this, it should considerable of all major decisions such as reversal (e.g. the decision to lay off staff)

•Legal Authorities: Zamtel is no exception, it must comply with rules and regulations or face legal consequences. (e.g. Lands Act No.29 of 1995, NAPSA)

•Labour Unions: These have the power to withdraw labour which could halt productivity in the event they deem fit that policies are not favourable for workers.

MONITOR •Competitors: These have had huge bearing

on the decline in revenues and could dry the corporation out of business if not properly monitored.

•Business Partners: These have been

engaged in to provide a diversified portfolio in new innovations. Future opportunities need to be explored. (E.g. with Huawei in 4.5G Launch )

•General Public: Company‟s image and how it is perceived. Currently, Zamtel is the smallest Mobile Network Operator (MNO) and technically insolvent.

KEEP SATISFIED

•Banks and Lenders: These will only aid funding if an organization meets certain criteria.

•Board: Good corporate governance

support promotes competitive strategies. The CEO should not be Chairman of the same company (Corporate Governance UK Code). This board is to be diversified and picked from other institutions by law and not necessarily due to a particular set of skills

Page 22 of 22

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