Zain Group: Strategic Analysis, Internationalization, and Expansion

This report provides a comprehensive strategic analysis of Zain Group, a Kuwaiti telecommunications company. It begins with an introduction to Zain Group, followed by an application of Porter's Five Forces to assess the competitive landscape, identifying the threats of new entrants, bargaining power of buyers and suppliers, threat of substitutes, and competitive rivalry within the telecommunications sector. The VRIO framework evaluates Zain Group's internal resources and capabilities, while value chain analysis examines primary and secondary activities to identify sources of competitive advantage. Core competencies and organizational culture are also elaborated. The report then explores two internationalization strategies, specifically multi-domestic strategies, that Zain Group could adopt. Furthermore, a strategic positioning map is constructed to compare Zain Group with its competitors. A BCG matrix is also used for the strategic business unit analysis. Finally, the report concludes with a discussion of the strategic implications and recommendations for Zain Group's future growth and expansion.

Running Head: ZAIN GROUP 0
Management

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Contents
Introduction...........................................................................................................................................3
Porter’s Five Forces of Zain Group.........................................................................................................3
VRIO Framework of Zain Group.............................................................................................................4
Value Chain analysis of Zain Group........................................................................................................4
Core Competencies of Zain Group.........................................................................................................6
Organisation culture of Zain Group.......................................................................................................7
Two Internationalisation strategies that Zain Group should adopt.......................................................7
Business strategy that should be adopted for the new product............................................................8
Appendices............................................................................................................................................9
BCG Matrix........................................................................................................................................9
Strategic Map..................................................................................................................................11
Direction Policy Matrix....................................................................................................................12
References...........................................................................................................................................13

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Introduction
Zain Group is the Mobile Telecommunication company of Kuwait. It was founded in the year
1983. Until the report of December 2018, it is estimated that company has around 49 million
customers. In the recent time also, Zain Group is the foremost data service operator as well as
mobile voice. Zain Group also has remarkable footprint in the eight African nations and
Middle Eastern (Madsen, 2017). After its incorporation in Kuwait, Zain Group has become
the first and foremost telecom operator in presenting the global systems for the mobile
services. Besides this, it can also incorporate the big data solutions through the help of SAP
across Kuwait, Bahrain, and Jordan (Zain, 2018).
Porter’s Five Forces of Zain Group
1. Threat of new entrant: In every Telecommunication sector, companies such as Zain
Group are required to invest heavily in the networks. Cables, servers, and software. In
addition to this, organisation is also required to spend the heavy amount on the cost of
maintenance cost including the up gradation cost. As Zain Group is the market leader in
Kuwait through which it can be stated that the threat of new entrant is low.
2. Bargaining power of buyers: almost all the telecommunication company tends to offer
the some basic services such as data, message, and voice. Besides this, customers also have
very low switching cost. However, it is easy for the buyers to switch to the other operators
such as VIVA, and Wataniya Telecom. In this way, it can stated that bargaining power is low
in the category of bargaining buyer (Zain, 2018).
3. Bargaining power of supplier: Zain Group tends to operate with huge number of
suppliers for its equipment’s, cables, software’s and servers. In the Telecommunication
industry, it is true that there are several vendors for these items. Therefore, it presents the
risks at the time of dealing with suppliers and partners at the time of new channels. In this
way, the bargaining power of supplier is low in this case. Therefore, it also has to ensure the
effective supplier policy so that suppliers also stick with the company for the long time.
4. Threat of substitute: the substitutes of Zain Group include the satellite operators, cable
companies, MNVO, web developers, and OTT. They all provide the substitute services for
the non traditional services specially. It states that the threat of substitute for the

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telecommunication industry is high despite of being the market leader in the
telecommunication industry. In this way, it is required by the Zain Group to bring several
innovative ideas time to time in order to beat the competition.
5. Competitive Rivalry: Zain Group is operating is the telecommunication segment in
which competitive is at the peak. Besides this, competition is also surrounded in every
dimension from its disruptive rivals and traditional telecommunication corporation such as
mobile application creator. In addition to this, local regulations of Kuwait also bring the
competition in the environment. It is done to prevent the monopoly in the market that leads to
disruption in the market. In this way, it can be stated that competitive rivalry is high in
Kuwait.
VRIO Framework of Zain Group
Primary
Action Valuable Rare Inimitable Seamlessly
Organised
Competitive
Advantage
Inbound
Logistics Yes No No Yes No
Operations Yes No No Yes Yes
Outbound
Logistics Yes Yes Yes Yes Yes
Sales and
Marketing Yes Yes Yes Yes Temporary
Zain Group has proved to be successful in varied areas. Due to this, Zain Group also
opt for the development of its internal capability by adopting the innovative solutions. It has
also adopted the group wide strategy that tends to offer the sustainable development for its
company. However, Zain Group is lacking in getting the competitive advantage in terms of
the technology. It is however true that advancement in the telecommunication industry is the
essential element. In case of the sales and marketing, Zain Group can face the threat of any
new entrant. Therefore, it is essential for the Zain Group to put the necessary efforts for
achieving the competitive advantage.
Value Chain analysis of Zain Group
Primary Activities:
Inbound Logistics

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It is true that it is essential for the firms to develop the strong relationship with the suppliers
as it is quite essential. Zain Group is effectively known for ensuring the positive relationship
with the suppliers. It also deals with various suppliers for its different services (Alqahtani,
2016).
Operations ‘
The significance of operations arises when raw materials of Zain Group arrive. After it, Zain
Group is ready to transfer the raw material into the finished product. After this, it launches
the product in market. Some of the operational activity of Zain Group includes the packing,
machining, testing, as well as assembling. It believes that analysis of the operational activities
helps it in improving the productivity as well as maximising the efficiency.
Outbound logistics: It includes the activities that tends to pass the product to customer
through the several intermediaries. It can also analysis the outbound logistics in exploring the
competitive advantage.
Marketing and sales
At this stage, Zain Group highlights the differentiation points as well as benefits that it offers
to encourage the customers. It mainly ensures its marketing through the adoption of digital
technology. It has also ensured the digital transformation in order to satisfy the customers.
Services
Pre as well as post services are offered by the Zain Group plays an essential role in the
development of customer loyalty. IN the recent time, customers prefer post selling services as
significant for its promotional and marketing activities. Similarly, Zain Group also effectively
ensured the post support services in the modern time.
Secondary activities
Firm Infrastructure
It includes the variety of activities such as financing, quality management, strategic
management and planning. It has although effective infrastructure management that helps it
in optimising the value in its value chain. However, it still requires some of the changes in its
infrastructure in order to strengthen its competitive advantage at the workplace.

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Human Resource Management
Zain Group has skilled and talented people that help it in reducing the competitive pressure
based on the commitment, motivation and the skills of the workforce. Besides this, it can also
achieve the cost minimisation objective by analysing the training and hiring cost with the
stable return.
Technological development
Zain Group in recent time is giving more emphasis on the digital platform due to the
increasing demand of customers. In addition to this, it should also effectively consider the
procurement activities in order to optimise the operational, inbound, and outbound value
chain.
Core Competencies of Zain Group
Zain Group has spent around 30 years in which it has sustained the strong market position. It
is able to achieve this due to the several core competencies. The first core competency of
Zain Group is its product and customers. It proved to be successful in providing the easy
access through its network. This is the reason it has proved to be number one company in
several regions. It also makes the proper and responsible sue of its products as well as
services. Besides this, it has proved to be effective in caring for its communities and
customers. It has proved its best services in satisfying the customers (Al-Aali and Kamel,
2015).
The strong financial performance of the Zain Group is also one such core competency. Due to
this, it is also able to serve better in the market (Harb and Abu-Shanab, 2009). It is also
building its strong capacity in the region. The one of the core competency of the Zain Group
includes the supporting community and economic development. It also has effective and
talented employees that proved to be the core competency of the company. By using the
talent of employees in effective manner, it also promotes the health and safety. In addition to
this, Zain Group is also considered to be the Employer of Choice in every country where it
operates it business (Abdullah, Naser & Fayez, 2018).
In addition to this, Zain Group also has the strong mobile telecommunication service in
around 8 markets across the Middle East. Its innovative approach has also proved to be the
core competency for it. It is also developing a program through which it can develop the

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skills and acquire the knowledge (Almutawa, Muenjohn & Zhang, 2018). It is also proved to
be excellent in the digital transformation. Zain Group, one of the leading telecommunication
companies has given the emphasis on investing in the digital services that also exceeds the
aspirations and expectations of its customers. This approach has also helped the company in
opening up the new revenue streams in its digital services. It has also transformed and
enabled the digital services to support the investment in expansions and network upgrades
across the market. In this way, it has core competencies that help it in achieving the growth.
Organisation culture of Zain Group
Zain has taken the ethical approach in its product and service offering. It also gives emphasis
on the affordability, accessibility, as well as maximisation of the utility in the service and
product portfolio. In its organisational culture, Zain Group also give focus on the investment
of resources and time on the capacity building effort for developing the innovation and
entrepreneurship. It is ensured for the betterment of the society by supporting and
establishing the accelerators. The HR policies of Zain ensure the equal opportunities. In its
organisation culture, it provides the equal opportunity to the employees to provide the healthy
work environment that inspires the team members to bring out the full potential (Wilson &
Corey, 2011).
It is also making regular efforts for establishing the strong foundation for social responsibility
and ethics in order to guide the human right values. It also believes that if customers will be
satisfy, it will create the positive environment at the workplace. it has also made several
changes in order to enhance the business performance. In this way, its organisation culture
has the unique feature that helps it in building the competitive advantage (Singh, 2018).
Two Internationalisation strategies that Zain Group should adopt
It is true that while expanding the business in global market, it is essential to adopt the best
strategy by knowing its pros and cons. This will lead to successful expansion of the business.
Therefore, the internationalisation strategy that should be adopted by Zain Group is multi
domestic strategy. By using this strategy, it can satisfy the demand of its services in every
local market. As per the need or requirement of the country, it can bring some modifications
in its services. This will help it in satisfying the demand of every local customer (Townsend,
2017). As per the different taste and preference of the customers, it can bring some necessary
changes. This will help the Zain Group in effectively satisfying the demand of customers

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across the different countries. It will also be able to success by using the multi domestic
strategy in effective manner. Therefore, it should also ensure the research and development in
order to know the traits if different countries (Roper and Hodari, 2015).
Strategic positioning map of Zain Group
From the strategic positioning map, it becomes easy to position the companies and their
competitors based on their offering. Zain Group has been positioned in the category of high
price with high quality category. As compare to this, one of the competitors of Zain Group
Ooredoo has come in the category of high quality with low price (Harb, Yaacoub, Kassem
and Baena, 2017).
BCG Matrix
From the explained BCG matrix in the appendices, it is stated that dogs hold the low market
share as compared to its competitors. It is also not proved to be worth disinvesting in the dog
category because it does not able to generate the enough revenue. In this, retrenchment
strategy proves to be helpful. As compare to this, cash cows needs investment in order to
move into the star category. Therefore, Zain Group should also make its more investment in
the mobile services for moving it to the star category (Semwal and Rabbani, 2018). Zain
Group is also using product development strategy by bringing more products. star category
operates in the high growth by maintaining the higher market share. The services of the Zain
Group is included in the star category. In addition to this, the last category of the question
mark category that has included the private infrastructure of the company.
Directional Policy Matrix
Directional Policy Matrix is the tool to determine the preferred segment. It also helps
in measuring the attractiveness of the segment as well as the capability of the organisation in
supporting the segment. It clearly explains in which category it should invest and in which
category it should divest or withdraw its investment. Therefore, it is recommended to Zain
Group to withdraw from the tele media services.

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Business strategy that should be adopted for the new product
It is true that when a company bring the new product in the market, it should have the two
features. The first one is the low price as compare to other competitors. A customer will
purchase the new product if it will be providing the similar feature in low price as compare to
other competitor. It will provide the several benefits to the company as well if it is bringing
the new product in market. Lost cost strategy also helps the company in gaining the market
share. Whenever any company launches new product, it becomes essential for the
organisation to analyse the market condition and prices that other competitors charge.
In addition to this, the new product should also add some distinct features so that customer
has one more reason to buy the product. When customers will see some unique feature in the
product, they will be more ready to buy the product. It is therefore, significant for any
organisation add some new features. It is also true that Zain group will get success if it will
give the emphasis on product innovation. It will also help in creating the value among
customers. A successful product differentiation strategy also helps in creating the loyalty
among customers (Al-Anzi, Al-Burait, Thomas and Ong, 2017).

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References
Abdullah, A. L., Naser, K., & Fayez, F. (2018) Obstacles toward Adopting Electronic
Government in an Emerging Economy: Evidence from Kuwait. Asian Economic and
Financial Review, 8(6), 832-842.
Al-Aali, A. and Kamel, M.M. (2015) Saudi Telecom Company: Rapid International
Investments and Divestments. Journal of Competitiveness Studies, 23(3), p.38.
Al-Anzi, B.S., Al-Burait, A.A., Thomas, A. and Ong, C.S. (2017) Assessment and modeling
of E-waste generation based on growth rate from different telecom companies in the State of
Kuwait. Environmental Science and Pollution Research, 24(35), pp.27160-27174.
Almutawa, Z. H., Muenjohn, N., & Zhang, J. (2018) Attitudes and behaviors as predictors of
service quality in the telecommunications sector context. International Journal of Quality &
Reliability Management, 35(3), 656-677.
Alqahtani, S.S. (2016) Customer satisfaction with mobile services in telecommunication
companies. Journal of Competitiveness Studies, 24(3), pp.128-145.
Hafez, H.A.A. (2016) Mining Big Data in Telecommunications Industry: Challenges,
Techniques, and Revenue Opportunity. Int. J. Comput. Electr. Autom. Control Inf.
Eng, 10(1), pp.183-190.
Harb, A., Yaacoub, C., Kassem, A. and Baena, C. (2017) Assessment and analysis of factors
depicting the international expansion process of mobile network operators: case of Zain
Telecom. International Journal of Technological Learning, Innovation and
Development, 9(2), pp.97-113.
Harb, Y. and Abu-Shanab, E. (2009) Electronic customer relationship management (e-CRM)
in Zain company. In Proceedings of the 4th International Conference on Information
Technology ICIT (pp. 1-10).
Madsen, D.O (2017) Not dead yet: the rise, fall and persistence of the BCG Matrix. Problems
and Perspectives in Management, 15(1), pp.19-34.
Roper, A. and Hodari, D. (2015) Strategy tools: Contextual factors impacting use and
usefulness. Tourism Management, 51, pp.1-12.

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Semwal, P. and Rabbani, A.A. (2018) Application of Expansion and Retrenchment
Strategies: A Case Study of Zain Group. IJEBD (International Journal Of Entrepreneurship
And Business Development), 2(1), pp.72-83.
Singh, S.B. (2018) Mergers and Acquisitions in the Telecom Industry. Journal of Commerce,
Economics & Management, 2(1), pp.18-27.
Townsend, S. (2017) Zain Group's third quarter net profit fall 6% on currency woes.
Retrieved from https://www.thenational.ae/business/zain-group-s-third-quarter-net-profit-fall-
6-on-currency-woes-1.671247
Wilson, M. I., & Corey, K. E. (2011) Approaching ubiquity: Global trends and issues in ICT
access and use. Journal of Urban Technology, 18(1), 7-20.
zain.com. (2018) Press Releases. Retrieved from https://zain.com/en/press/zain-group-
generated-revenues-of-kd-855-million-us/
zain.com. (2018) Press Releases. Retrieved from https://zain.com/en/press/zain-south-sudan-
partners-with-huawei-and-unesco-t/

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Appendices
BCG Matrix
?
Relative Market Share
Market Growth Rate
Private infrastructure
Services of the
company
Tele media
services Mobile services

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Strategic Map
High Quality
Low price High
price High Price
Low Quality

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Direction Policy Matrix
Invest Grow
Harvest Divest
It should invest
more on the GSM
services
Cable and mobile
services
Tele media servicesMobile services