Northrise University

30029 Kitwe - Ndola Dual Carriage Highway. P.O Box 240271, Ndola, Zambia.

ASSIGNMENT COVER SHEET

Student ID: 1905504, 1904964, 1905247, 1905563, 1905185, 1905834, 1905867, and 1905726
Student Name: Patrick Chibabula, Kaluluma Mulenga, Agatha Lumingo, Alice Banda, Clement Mwamba,
Dawn Mukanshi, Kalenga Chifinga, and Restu Bwalya
Course Code: BUS402

Course Title: Business Strategy

Instructor Name: Mrs. Benedetti Mwiya

Essay/Assignment Title: PESTEL and VRIO Analysis on Zamtel

Due Date: May 4, 2022

Declaration:
I acknowledge that submitting this document binds me to the following:
To the best of my knowledge, I assert that no part of this assignment has been copied from the work of anyone else, be it another stude
or any other author or from any source except where due credit is given in the text below, or has been written for me by someone else
except where the relevant instructors and authorities have explicitly permitted such collaboration .

SIGNATURE: P.Chibabula

Instructor’s Comments:

GRADE [ ]
PESTEL and VRIO Analysis on Zamtel 2

This assignment is going to carry out a PESTEL and VRIO analysis on Zamtel. The

reminder of this paper is structured as follows; In the first section, the paper will describe

PESTEL analysis. The next section discusses the organizational background of Zamtel and

conduct a PESTEL analysis on the organization. The third session will discuss the key success

factors in the industry Zamtel operates in. The fourth section will conduct a VRIO analysis on

Zamtel followed by a SWOT analysis matrix to support the PESTEL and VRIO claim and

recommendations on how the analyses can be used effectively to produce alternative options for

Zamtel, and the conclusion in the last section. 

PESTEL Analysis

PESTEL is a business strategy that takes a multi-faceted approach to the business

environment. PESTEL is an abbreviation that stands for Political, Economic, Social,

Technological, Environmental, and Legal. “PESTEL analysis is a tool that is used by

organizations to track the environment in which they operate or plan to launch a new project or

product or service, etc." (Cole, 2006, p. 114). on another hand, PESTEL analysis according to

Fuller (2010), is a useful technique for determining the risks associated with market (demand for

a product or service) growth or decrease, as well as the position, potential, and direction of a firm

or organization. As a result, this study describes Zamtel's PESTEL analysis, stressing the

influencing elements from a political, economic, social, technical, environmental, and legal

standpoint.

Organizational Background
PESTEL and VRIO Analysis on Zamtel 3

Zambia Telecommunications Company Limited, or Zamtel, is a government-owned

telecommunications service provider in Zambia. The Companies Act, Chapter 388 of the

Zambian Laws, was used to establish it. According to Gazette Notice No. 183 of 2012 and the

Statutory Functions Act No. 4 of the Laws of Zambia, the Corporation is under the jurisdiction of

the Ministry of Transport, Works, Supply and Communications. By offering consumers with

cost-effective, comprehensive, and high-quality telecommunication facilities and services, the

company has become a pioneer in Zambia's telecoms market. Zamtel's purpose is to create cost-

effective, relevant overall communication solutions and services that continually provide an

unrivaled customer experience while maximizing shareholder value through the use of cutting-

edge technology and customer-focused marketing. Zamtel's vision is to be the preferred provider

of communication services. The goal of Zamtel according to its article titled, “Zamtel launches

all networks offer”, is to make communication accessible to everyone (Habeenzu, 2010).

Therefore, the following is the PESTEL analysis on Zamtel.

Political

The political climate that the government creates is critical in ensuring that the firm

succeeds in its operations. For the telecoms industry, the political landscape is fraught with

dangers. Regulations, network licensing, national radio spectrums, and, in the case of certain

nations, trade barriers are the typical political hazards for telecommunications. These concerns

have mostly impacted network operators such as Zamtel, with little impact on equipment and

service providers. However, one element that worked in Zamtel's favor is that it is a state-owned

firm or parastatal in Zambia, which makes it relevant in the industry and allows it to receive a lot

of government attention (Mambwe, 2015)

PESTEL and VRIO Analysis on Zamtel 4

Economic

In the telecommunications industry, the significance of economic factors is just as

crucial. Such difficulties have not spared Zamtel. People have been cutting back on their

telecommunications spending in recent years due to the economic downturn. In principle, the

more prosperous the economy, the more consumers will spend on any product or service.

Technological advancements also help these economic tendencies (Muhammad, 2009). Despite

the obstacles in Zambia, this is true in the case of Zamtel. Interest rates, inflation, and taxation

have all impacted Zamtel and the telecommunications industry's operations. The increasing

expenses have also had an impact on the pricing per plan supplied to clients. Building towers and

resources in rural places has been quite costly. Customers who do not live in major cities are

impacted, and in some circumstances, this has prompted most rural customers to reduce their

Zamtel product costs, particularly when purchasing airtime.

Social

Social considerations have a significant impact on the industry in terms of profitability.

Many activities, including employment and enjoyment, rely on connectivity. The use of internet-

based services has increased globally. People are increasingly embracing social media for both

enjoyment and work (Internet Speed Data for Zambia, 2020). Video streaming services, from

YouTube videos to Netflix, all demand excellent connectivity. As a result, the use of 4G has

increased globally, and the corporation has benefited from this. Furthermore, an increasing

number of people like to stay connected when on the move. For them, this is a way of life. For

some, they are just too preoccupied with their jobs, while for others, it is because they cannot
PESTEL and VRIO Analysis on Zamtel 5

stay away from their families and friends. As a result, Zamtel aspires to be a network for

everyone (Mambwe, 2015).

Technological Factors. Because the entire telecom sector is founded on technology,

technical developments have a significant impact. Mobile computing is becoming more popular.

IT is transforming the world in ways it has never been before. It is important for a variety of

reasons, including business and productivity. Computers and cloud computing have become

indispensable tools for increasing productivity. Telecommunications companies like Zamtel

stand to benefit the most from these technical advancements. (Mambwe, 2015) The number of

smartphones and tablets available for purchase has continued to rise, and neither can be

completely utilized without the fast connection that Zamtel delivers. Telecom services are

becoming more and more in demand. For example, Zamtel, a telephone company, has

established an optic fiber network in their buildings to replace copper. Because of the wires

utilized, this will provide stable connectivity and prevent theft. (Jonas and Poulsen, 2019)

Environmental. How telecommunication products reach clients is affected by climate

change and global warming. Telecommunication towers, for example, may be affected by

shifting weather patterns, unstable rainfall patterns, winds, and hailstorms in particular places,

resulting in connectivity loss. Furthermore, smartphones account for a significant portion of the

e-waste generated each year. Because of the high volume of e-waste generated by both service

and equipment suppliers, the sector is concentrating on waste management and reducing its

environmental impact. Zamtel is an environmentally friendly corporation. Customers also have

high expectations, and telecom providers are expected to meet them. However, because the
PESTEL and VRIO Analysis on Zamtel 6

telecom industry's needs change frequently, it's impossible to predict which technology will

survive, improve, or be phased out (Jonas and Poulsen, 2019).

Legal factors. Legislation has a significant impact on the telecommunications business.

Issues with the government, monopolies, and customers, in particular. However, the telecom

industry has permitted both the import and export of items. The June 2017 publication of the

Information and Amended Licensing Regulations, which established a converged licensing

framework, was expected to allow enhanced provider innovation, improved service quality,

higher investment, and increased market competition, among other things. Following the

publication of the new licensing laws, Zamtel has continued to attract new investment while also

creating a favorable climate for existing operators to reinvest and provide a level playing field

(ZICTA, 2017).

Key Success Factors in the Zambian Telecommunication Industry

Zambian mobile telecommunications began in 1994, when ZAMTEL, a government-

owned MNO, was granted a license to provide public services. ZAMTEL began by providing

fixed and then mobile telephone services. When Telecel, now known as MTN Zambia, received

its license in 1995, it was the second to enter the market. Zamcell, now known as Airtel Zambia,

was the third entry, having received its operating license in 1997. The telecommunications

business has continued to evolve since 1997. As improved technology become available the

telecommunications sector has become extremely competitive. To gain a competitive advantage,

the following are some of the key success factors

Human Resource
PESTEL and VRIO Analysis on Zamtel 7

The ICT industry is characterized by valuable human resource, and this is one of the key

factors contributing to the success of the industry, and with the possession of a very skilled and

highly qualified worked force this positively ensures production efficiency. Also, other studies

outline the importance of government playing a role in offering incentives such as education and

training grants for people in the industry Rai & Kurnia 2017).

Infrastructure 

An industry with an efficient infrastructure is essential for facilitating and driving success

and growth of the industry. The cost of the infrastructure including cost of internet access is one

vital element affecting the industry Rai & Kurnia 2017). For example, higher costs hinder the

adoption of ICT in a country, while reliable and low infrastructure cost is attractive and has also

enabled the rapid growth of entrepreneurs. Usually, ICT infrastructure is either deregulated or

privatized for maintaining service efficiency and low access costs (Rai & Kurnia 2017).

Market position. This includes detailed assessments of the company's market presence

and dominance, which can be expressed by the company's business size as well as its market

share in each business category via numbers of subscribers, traffic or connection times, and pulse

generation. Due to its high brand equity, a company with a considerable business size and market

share has greater resistance to any negative business climate, a better bargaining position to

negotiate with vendors, distributors, and regulators, and greater flexibility to change selling

prices. The company's ability to expand its customer base corresponds to its ability to improve

network coverage, which frequently necessitates a significant investment expense. As a result, a

cellular company's market position is typically dependent (Mansell,1993).

Diversification. The analysis includes thorough examinations of the company's ability to

evenly diversify its income creation, based on the sorts of enterprises or services given, market
PESTEL and VRIO Analysis on Zamtel 8

segment, and geographies, including revenue from abroad markets. The capacity to differentiate

products as well as disperse revenue from multiple market groups and geographical areas will

not only maintain the company's revenue stream's consistency, but will also give a larger cushion

against any particular business collapse (Mansell,1993).

VRIO Framework

The VRIO framework is a strategic planning tool designed to help organizations uncover

and protect the resources and capabilities that give them a long-term competitive advantage.

VRIO is an acronym for a four-question framework focusing on value, rarity, imitability, and

organizational support. Whether the organization has one or many sustainable competitive

advantages, a VRIO analysis will help the organization identify and leverage them as part of the

strategic plan (David, 2019). That being said, the following is the VRIO framework for Zamtel

Company.

Value

Strategic capabilities are valuable when they create a product or service that is of value to

customers and generates higher revenue or lower costs or both. It involves three components and

these are: opportunities and threats, value to customers, and cost. In the case of ZAMTEL it has

taken advantage of the need for internet bundles by people, they have made their bundles so easy

to access by making them cheaper than their competitors, it has adapted to the change in

technology with introduction to going cashless by introducing mobile money services which

gives access to paying bills and having one’s access to money at their fingertips. ZAMTEL on

the other hand faces issues of poor network It is important that a product is valued by customers

and in the case of Zamtel its customers are willing to spend a certain amount of money to access
PESTEL and VRIO Analysis on Zamtel 9

its products. An example is its internet bundle offers which a number of people are willing to

acquire, (Kalunga, P. 2019).

Rarity

Rarity is said to be a resource that is rarely present among existing and potential

competitors (Pesic, Milic, & Stankovic, 2013). In other words, it is a resource that can be

acquired by one or very few firms. Zambia Telecommunication being one of the three mobile

network providers in the country is a rare company because it is state owned. The network of

Zamtel is rare because it is the only network that partnered with MasterCard. The main purpose

of this partnership is to enable millions of Zamtel mobile money customers to connect to a global

online market so that they can make safe in-person payments using mobile money on the

MasterCard network. MasterCard technology will also help drive and improve access to the

digital economy.

Zamtel offers the least priced daily, weekly and monthly bundle packages which allows

its customers to call, text and browse at affordable rates compared to MTN and Airtel. Zamtel is

also rare in that it has best qualified staff and a vigorous training program that helps graduates

and develop them to give them experience. It also has room for innovation where every staff is

given a chance to come up with a project or an idea that can be put out and as such, this helps to

empower and appreciate all the staff (Businessfocus, 2021).

Inimitability. It is difficult to copy or generate ready equivalents for an inimitable

(opposite of imitable) resource. If it's tough for another company to obtain or replace a resource,

it's considered inimitable and non-substitutable. As long as rival enterprises do not obtain control

of the resource or a close equivalent, a valuable and uncommon resource or capability will

provide a competitive advantage (Barney, 1991). If a resource is precious and scarce, it can
PESTEL and VRIO Analysis on Zamtel 10

provide a market leader with a competitive advantage. In the case of Zamtel, this resource is the

fact that it is a government-owned company.

Being a government organization, Zamtel will have access to valuable and rare resources

that the government can make accessible to it, which may not be economical or easy to imitate

by its competitors. Due to its government ownership, Zamtel has access to resources that can

enable it to train personnel at a minimal cost (Bolton & Drew, 1991). Data-based human capital

management is both costly and difficult to mimic. Companies must build software and invest in

training their HR staff on new technology and strategy (Kaapanda, 2011). For Zamtel, this is

where the government can help. The government owns a lot of different sectors, including the

newly formed information and technology sector, where it can find instructors to come and train

Zamtel's human resource and personnel on how to build and develop software at low to no cost.

Organizational Support. After analyzing Zamtel for its resources and competences,

researchers also suggest that a company must be examined also to see if its policies and

procedures are organized in a manner meant to support its valuable, rare and costly inimitable

resources. (Barney, 2002). We are basically looking at how the leadership and managerial

practices at Zamtel Zambia support key resources both financial and physical. In terms of

physical resources, Zamtel Zambia has put up so much effort in building some facilities that are

used for operations. Apart from that, the telecommunication company has a number of motor

vehicles that are used to deliver products to various zamtel branches across the country (Zamtel,

2017).

Furthermore, it is vital to note that employees are trained to offer good customer service.

These employees are trained in such a way that they understand organizational cultures, and they

are trained to better their attitudes in their working environments. The employees are encouraged
PESTEL and VRIO Analysis on Zamtel 11

to work very hard and with professionalism. Following some technological advancements that

are happening globally. (Zamtel, 2017) Zamtel launched a 4.5g LTE-2300 on the coperbelt

province of Zambia. This was a smart move as it is meant to better the services of the company

and also putting the company at a higher level in terms of technology. This step is not only a

huge step for the company but also for the customers as it betters the service offered to

customers. (Zamtel, 2017)

Opportunities and Threats Matrix of ZAMTEL

SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) is a system or

process for analyzing the internal and external elements influencing an organization's

performance in relation to its competitors or market environment. A telecommunications

company's SWOT analysis evaluates its health by examining its resource strengths and

weaknesses in terms of the quality of how it delivers and receives data and information globally

via fiber-optic cables, networks, antennas, and other communications equipment. External

opportunities and dangers that may help or hinder the organization in the future are also

identified in the investigation (David, 2019).

Strengths Weaknesses

1. Cutting-edge fiber-optics technology, 1. High operating costs

2. A respected brand name, 2. Large unskilled Labor force

3. Excellent customer service and 3. Huge debts in loans and unpaid

benefits
PESTEL and VRIO Analysis on Zamtel 12

4. A strong sales team

4. Little attention prioritized to Research

5. Presence in all the provinces and major and Development (R&D).

districts.

6. Legacy of being the sole fixed land-line

service provider.

7. Government funded

8. High Growth rate and Domestic market

9. Cost advantage: All networks offer

Opportunities Threats

1. Increasing consumer interest and a 1. A sluggish economy, increasing

decrease in competition. Technological competition and increased government

Changes: Arrival of new Technologies regulations against the

(e.g., 4G, 4.5G LTE, Fiber) telecommunications industry

2. Opportunities are beneficial, outside 2. New rivals/competitors that offer

events that a company can use to boost customers fast service and cutting-edge

its existing strengths. technology (e.g., Vodafone Zambia)

3. Growing demand 3. Court Cases and Bad public image:

Zamtel property held without title

4. Unfulfilled customer need such as
deeds.
Mobile Money, high-speed internet
PESTEL and VRIO Analysis on Zamtel 13

even in rural areas

Diagnosis of SWOT Outcomes

Zamtel has consistently ranked among the country's top corporations. It keeps its leading

position in Zambia's telecom business by thoroughly analyzing and examining the best tactics

using SWOT analysis. It has made significant progress from wired to wireless communication,

with the goal of offering quicker and better connectivity. Companies like Zamtel rely largely on

marketing for their success and are always on the lookout for talented marketers. Internal issues

such as strengths and weaknesses affect your organization, whereas opportunities and dangers

affect the market as a whole. If Zamtel aims to sell mobile phones in a market where there are

already a lot of well-established merchants, the fact that it offers nothing new could be perceived

as a liability. Zamtel is well-versed in the demographic groupings that are most likely to buy

things in the country. When several groups have a need or want for a product, different

marketing tactics are required to sell to them. This is one of the advantages of Zamtel.

Recommendations

Zamtel should ensure that its steady expansion is justified by pursuing more worthwhile

projects that generate more consumers rather than just profit. This can be accomplished by

introducing a growing number of customer-centric services that will benefit both the

customers/subscribers and the organization (Kaapanda, 2011).

The company should continue to put more effort into maintaining a well-motivated

workforce, which is the driving force behind the company's creativity. To address concerns of

communication barriers in customer care services in some locations and possible allegations of

marginalization, management could extend the company's employee makeup (Zamtel, 2017).
PESTEL and VRIO Analysis on Zamtel 14

The company should launch a public awareness campaign and related programs to dispel

the misconception that it is a network for retirees and the elderly; management should ensure

proper utilization of the well-publicized optic-fibre connection and deliver on promises of better

connectivity and lower rates/charges, as this will increase the company's goodwill and

profitability (Kaapanda, 2011).

Conclusion
PESTEL and VRIO Analysis on Zamtel 15

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