Artel Communications Company - Case Study Example

? Artel Communications Company Introduction Artel Company is a telecommunications company that was incorporated in 1971 in Buckingham in the United Kingdom. The company has developed and specialized in delivering communication systems service in the areas of industry, education and transit (Magnussen & Mobley, pg 383, 2000). With 30 years of expertise, Artel focuses its core business in the public sector by providing sophisticated systems to schools, water treatment plants, transit facilities and services regarding communication demanded by the commercial and industrial markets. Specializing on telecommunications, fiber optic networks and security systems, integrated Audio Visual systems, Artel continues to outsource its services from United Kingdom to places like New York City, Europe, Middle East and Africa (Deepak & Stephen, pg, 225, 2002). Accompanied with great quality and service commitment the company takes pleasure in offering the service, design, fabrication, engineering and documentation of highly complicated custom communications systems such as engineered sound, audio visual systems integration, telecommunications, Systems, networking, industrial telecommunications, distant learning, fiber optics and Cable Tele Vision (CATV) and video systems among others. Artel partners with Gilat satellite network, N-soft and Taide Network who is the largest supplier of Very Small Aperture Terminals technology with big share of the world Very Small Aperture Terminals (VSAT) market. Artel receives technical support from Gilat satellite network in the fields of design, installation and maintenance of Very Small Aperture Terminals network (Deepak & Stephen, pg228, 2002). With this support, the company is also able to provide video data transmission, video delivery and internet services globally. Analysis Using PESTEL The external environment of Artel Company is tremendously complex and dynamic thus it should be conducted on a frequent basis. PESTEL analysis is essential tool that helps in understanding a competitive environment which influences the company. PESTEL analysis involves evaluating Political, Economical, Social, Technological, Environmental and Legal factors affecting a particular company (Magnussen & Mobley, pg, 385, 2000). Political factors These factors refer to policies on the scope of involvement by the government in the economy. Political decisions influence a vital area in the business such as education of the workforce, quality of infrastructure such as roads and railway system and health of the nation (Klomp & Leeuwen, pg 352, 2001). Government laws imposed on tariffs and phones produced must abide by the government’s rules and regulations. Goods and services provided to the public must meet the safety and privacy needs by the government. Economic aspects These aspects affect the company in terms of interest rates, economic growth, inflation, exchange rates and taxation changes. These external economic aspects would affect a firm’s behavior for instance: higher interests rate may prevent investments since, it costs more to borrow (Worthington& Britton, pg 10, 2009). A strong currency may hinder efficiency in importation by raising the price in terms of foreign currency. Inflation can also provoke higher wage demands from the employees of a firm. The global economic crisis has caused a great influence on the country’s public finances and telecommunications firms. This is actually symbolized in the movie “Money never sleeps”, where Gheko comes out of prison. It implies that the prevailing economic conditions are a challenge to many companies in the country (Roger, pg619, 2011). The Gross product deficit ratio of 13.0% in the United Kingdom is arousing fear on the investors and policy creators. Report about the country’s national debt shows that in the last three years the national debt ratio was about 38.05% and it is convincing that if it continues at this rate then it might build up to 100% in the next three years (Deepak & Stephen,pg,230 2002). This majorly results into loss of jobs thus hampering the growth of telecommunications market in the country. Social factors Changes in social issues and patterns can affect the demand for a firm’s product and the availability and willingness of individuals to work. Social aspects have a deep influence since the emergence of social networking such a face book and twitter has given particularly the young population with another medium to interact (Klomp & Leeuwen, pg 347, 2001). The culture of a company has significant effects on the buying patterns of the consumers. This is the driving force that influences the policies and decisions, acceptability of various inventions in technology and adoption of the technology (Worthington& Britton,pg15, 2009).This results into changes in the life style of young urban population who are majorly targeted to modern technology. Such transformations have resulted to rise in demand of internet mobile services and modern technologies like 3G in the younger market segments. Technological conditions The rate of change in technology is essential in the telecommunications industry. New design of phones and communication devices such audio and visual devices can be manufactured rapidly and it is essential that the manufactures should be able to conform either the new models in the market to curb competition to other companies (Klomp & Leeuwen, pg 350, 2001). Telecommunication industry is technology dependent and intensive sector. It is challenge if the Artel Company cannot overcome to external competition because their products will secure a smaller percentage in the telecommunications market. Environmental conditions Environmental factors that affect performance of Artel Company might involve technological changes. The environmental factors can affect the telecommunications industry either directly or indirectly (Worthington& Britton,pg16, 2009).This company is least affected by environmental factors unlike other sectors such as transport and petroleum sectors. However, the environment of telecommunications is constantly diverting to more of internet operations globally hence, causing a challenge for the company to adapt such within short duration of time. Legal factors Klomp & Leeuwen (pg 345, 2001) suggest that legal influence prevails in the form of deregulation procedures adopted by the nation’s legislative body or organization. Such actions directly affect governing rules of the telecommunications sector. This also reveals the external competition level in the industry thus affecting various companies in the same sector. The legal factors might be in line with aspects such consumer law, employee law and anti trust law that influences the telecommunications industry especially in England. Three main PESTEL factors Decision making is more natural to some specific people and therefore, they focus more on improving the quality of their decisions to ensure that the company is well managed and performing in the market (Deepak & Stephen, 235, 2002). Managers in Artel Company frequently embrace assessments by the use of the PESTEL tool which has resulted to tremendous business development in the company through its services and products delivered to customers. Previously, the company conducted a PESTEL examination and three factors emerged as the most challenging in the external business environment discussed below into details; Economic Conditions Economic growth, interest rates and inflation all have an impact on Artel Communications Company. This is because rival telecom businesses need to stay competitive; however, most have had to hoist prices during global recession. Different companies will strive to beat others by providing low costs for their services hence, making competition stiff (Deepak & Stephen, pg, 236, 2002). Therefore, marketers in this company should consider long and short term condition of a trading market. Moreover, the level of unemployment rises individuals is not able to afford its services thus forcing it to provide its services at minimum costs. Global economic reduction has put United Kingdom into deep recession. This global crisis has influenced the country’s public finances and thus Artel communications is finding it rough since the company has no choice of overcoming this challenge for a long duration. In addition, the gross domestic deficit ration has reached 13% causing more fear for the investors to invest in the Artel communications company (Worthington& Britton,pg13, 2009). This results into another danger where the policy makers in the country cannot make policies. This country is subjected to a continual rise of debts that affects the performance of telecommunications companies such as Artel. Inflation is a major challenge in England’s economy causing low performance in various industries such telecommunication. The strategies made to curb inflation have not been effectively put into practice due to various challenges regarding availability of resources in certain sectors (Deepak & Stephen, pg, 234, 2002). This has resulted into the low performance of key industries in the economy. Artel Company has been influenced by the price instability emerging from its product and services. Artel Company like Wall Street: “Money never sleeps” film that shows experiences of a fast running economy as compared to that of England, the must come up with options that should be implemented to manage challenge caused by inflation and this could be done frequently by conducting economic performance of the company (Roger,pg619, 2011). The country’s debt ration keeps on rising from 38.05% in the previous three years to about 100% in the next three years. This shows that several jobs are lost. When numerous jobs are lost it means that the purchasing power of the telecommunications services from Artel Company are reduced thus hampering growth of telecommunications and mobile growth in the country (Deepak & Stephen, pg240, 2002). This adversely affects the performance of Artel Company resulting into low output in the economy. Therefore, the government should come up with various methods of handling the debts especially the fiscal debt. The government should therefore, ensure that there is proper credibility on the implementation of the strategies. Social and Cultural Conditions The major social factors that have affected Artel Communications Company are those considered with career attitude and safety. Since, Artel offers communications services to various parts of the world, this has resulted into increased desire for mobile phones that will alert for messages, electronic mails and phone calls (Worthington& Britton, pg15, 2009). In addition, they also require the facility to conduct conference calls, instant messaging and host their career focused features. Some of the factors affecting this company are those regarding safety arising form the manufacture of new products in the telecommunications sector. Social factors have a major influence to the Artel company in that as the company provides competent telecommunication services it faces a challenge socially whereby there are other emerging social networking sites like face book and twitter creating another medium of interaction to the younger population (Deepak & Stephen,pg,238,2002). Therefore, a wider population targeting the use of social sites comes from the young population in the economy. Research conducted in Buckingham in England on social culture it is realized that there various culture dimensions. This leads to the understanding that the people in the region scored low at Power Distance index (PDI).It was also realized that the rate of individualism (IDV) is high among the people, the culture of Buckingham is male dictated and masculine driven thus it scored highly on masculinity (MAS).Several people in this country are aged thus they find embracing new technology a big problem. This leads to an emerging culture of the young individuals who are motivated to use and apply new technology equipments (Magnussen & Mobley, pg, 390, 2000). This affects Artel Company since the aged cannot buy the commodities posing a challenge to the economy. Social aspects such as the ability of an individual to have a job would greatly influence the company’s performance in the economy. If most people in the Buckingham have the right attitude to have employment, it would greatly enhance the performance of Artel Company since most people who are working would be able to buy the company’s products (Magnussen & Mobley, pg, 390, 2000). Such aspects influence the company since there are emerging unemployment issues in the country. Several cultural studies show that the social culture has major significance on the buying behavior of consumers. This reveals that culture is the driving force that influences the decisions of consumers, acceptability and adoption to technological services of Artel Company (Magnussen & Mobley, pg390, 2000). This pattern reveals that the young populations have a high purchasing power as compared to ageing population who are not adopting the new technology quickly. Political Conditions Political factors refer to policies that governments form to intervene and ensure high economic performance in a country. Here, the England laws regarding safety and privacy needs must be embraced by Artel communications limited. This has been one of the major political factors affecting the company (Magnussen & Mobley, pg395, 2000). In addition, Artel Company also experiences a challenging adapting to the kind of safety regulations that the products such as audio and visual integration, fiber optics, must be safe before they are sold to the consumers. The government laws on tax policy, trade and tariff controls forms the core part in the country’s business. This takes place in a situation where by the country exports the company’s products and services abroad. Government tariffs are used to create economic barriers to trade hence Artel experiences external political forces especially when tariffs raise the overall prices of goods, reducing their production and sales, since they harm domestic business thus tending to quite unpopular (Magnussen & Mobley, pg392, 2000). This has been a major influence to Artel’s products locally and overseas, this is because England has a tendency of increasing the prices of its companies for exportation thus export tariffs are harmful to local economy. The current political conditions in England affect the performance of Artel Company since there is an environment of deregulation. This exultantly causes a stiff and a new market competition resulting into rise in the choice of buyers (Worthington& Britton, pg16, 2009). Eventually, it should seek various alternatives such practicing generic competition and producing more competent products in the market to curb the stiff competition. Conclusion Artel Company has been the best company in providing telecommunication services in partnership with other companies such a Gilat Satellite network. Artel Company has adversely performed well in the economy however, through PESTEL analysis, it clear that the company is facing a lot of challenges from the macro environment (Worthington & Britton,pg17, 2009). These factors such political, economic, social cannot be influenced by the company. Therefore, political factors such as deregulation make the company to forge various steps ahead of other companies due to the stiff competition it faces. It is clear that when there stiff competition then performance increases. The company is also affected by various government policies made by the England government concerning issues like health and safety standards of the company’s products (Magnussen & Mobley,pg385,2000).The economic aspects such as global economic reduction, increased debt ratio and resultant economic effects on the gross domestic product are very vital aspects for the performance of the company eventually; the social cultural factors has caused a major influence in the performance of Artel Company since this is the main macro factor that affects this company. Socially, the young people embrace the current technology more as compared to the aged; this poses an influence to the company’s policies in terms of product creation technology (Worthington& Britton, pg17,2009). Since, sites like face book and twitter offer alternative means of interaction apart from telecommunications, young people have developed a trend of frequent use of this technology causing a social influence to Artel Company. Bibliography Worthington, I. and Britton, C., 2009: The Business Environment, 9th Edition, Pearson Education. 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