The Domestic Factor Conditions of the Industry of Oman Tel - Essay Example

Making Sense of Strategy II Table of Contents Table of Contents 2 Introduction 3 Brief history of Oman Telecommunications 3 Discussion 3 The domesticfactor conditions of the industry of Oman Tel 3 The domestic demand conditions of the industry of Oman Tel 6 The related and supporting industries to Oman Tel 8 Specific local characteristics about the firms and the nature of the competition in the telecommunication industry, including strategy, structure and rivalry 9 The role and / or importance of the government in supporting the telecommunication industry 11 What changes to the current government support, if any, present the recommendations? 12 Conclusion 13 References 14 Introduction Brief history of Oman Telecommunications Oman telecommunications is recognized as one of the most reputed and unique organization of Pakistan offering effective telecom as well as multimedia services. It started it is operations in the year 1996 with payphone operations that enhanced it is brand image and market share to a significant extent as compared to others. Moreover, by developing the hybrid fiber coaxial (HFC) network, the organization of Oman Tel amplified it is popularity and brand value in the market of Lahore mainly by attracting a wide range of customers. Due to which, the organization of Oman Tel enhanced it is profitability and efficiency in the market among many other rival contenders (OmanTel, 2014). Discussion The domestic factor conditions of the industry of Oman Tel In order to maintain a successful brand image of an organization in international perspectives are to offer high concentration over the factor conditions. The prime domestic factor conditions of the industry of telecommunication might be capital and quality of infrastructure. This is because, it is the capital or the revenue that helps an organization operating in this segment i.e. telecom to amplify it is growth and expansions in other international nations or countries. Similarly, the organization of Oman Tel invested a huge amount of capital or revenue in order to develop it is 3G and 4G network connections. Other than this, by investing a huge amount of revenue worth OMR 116 million by the organization of Oman Tel proved extremely effective for it to expand it is network connections in numerous rural as well as developed countries of the entire world. As a result of which, the organization of Oman Tel became successful in positioning it is 3G and 4G network among the target customers of Oman. As a result, the brand value and market share of the broadband connections increased by 61.6 percent as compared to many other rival contenders. In addition, the organization of Oman Tel also decided to offer high-ended services to the target customers so as to amplify it is equity and uniqueness in the market of Oman. Along with this, the organization of Oman Tel implemented low tariff plans in order to increase it is range of customers and to retain the existing ones so as to amplify it is competitive advantage and sustainability in the market among many other rival contenders (OmanTel, 2014). In addition to this, the organization of Oman Tel implemented the plan of unlimited usage in order to enhance it is position and reputation in the market of Oman among it is target segments. Due to which, the organization of Oman Tel became successful in developing a strong foothold in the market that enhanced it is distinctiveness and market position as presented below. Therefore, it might be clearly depicted that due to the investment of a huge amount of revenue in developing 3G and 4G networks, the organization of Oman Tel became successful in enhancing it is dominance (Times of Oman, 2014). (Source: Oman Tel, 2013) In addition to capital, quality of infrastructure is also extremely essential for the success of an organization. This is because; it is the infrastructure that helps an organization to create a specific identity and image for itself in the market of Oman among many other rival players. Keeping these facts in mind, the chief executive officer, Dr. Amer bin Awadh Al Rawas offered high attention over the concept of developing high-quality of infrastructure for itself. Due to which, the organization of Oman Tel invested approximately OMR75 million in order to develop a high-quality of infrastructure. As a result of which, the organization of Oman Tel became successful in attaining over 2100 sites in the entire Oman by the year 2013 that helped in enhancement of it is reputation and brand image. Furthermore, the CEO, Dr. Rawas stated that the organization of Oman Tel invests almost 16 percent to 17 percent of it is total revenue each and every year in order to improve and develop it is infrastructural developments in the entire region of Oman. However, such an investment proved effective for the organization of Oman Tel thereby amplifying it is customer base and reputation in the market as shown below: (Source: Oman Tel, 2013) Hence, it might be clearly revealed that due to high investment of capital over infrastructure and network connections, the organization of Oman Tel attained a significant market share and profitability in the region of Oman among many other rivals. In addition, due to it is value-added services, the organization of Oman Tel became successful in amplifying it is customer base and competitiveness that enhanced it is prosperity and market demand (OmanTel, 2013). The domestic demand conditions of the industry of Oman Tel In this age, sustainability is only utmost aim of any organization. However, in order to attain it, an organization needs to attain an extensive range of customers as well as a high-quality of infrastructure. But in order to attract a wide range of customers, value-added products or services also need to be presented by the organization so as to satisfy their changing demands and needs. Only then, an organization might become successful in attaining a praiseworthy position in the market among it is other rival contenders. Apart from this, all the value-added services need to be offered at competitive prices, so as to maintain it is position. Due to these underlining reasons, the organization of Oman Tel also tried to develop high quality of infrastructure and effective services for the customers of Oman (OmanTel, 2013). Moreover, the organization of Oman Tel implemented varied types of low tariff plans as well in order to attract the prospective or interested customers. But after retaining for a specific time period, the customers of Oman Tel become attracted towards the tariff plans and services of the gulf service providers. Therefore, in-spite of remaining in neighboring countries, the gulf service providers attained a significant growth and demand of it is products and services in the market of Oman. However, in order to retain the customers, the organization of Oman Tel decided to implement varied types of low tariff plans as well as better quality of services for the mobile broad band users and fixed broad band users. In-spite of implementing the above mentioned facilities, the organization of Oman Tel failed to retain it is customers for a long period of time that hindered it is image and market share to a considerable extent as compared to the gulf service providers. Other than high quality of services the organization of Oman Tel also offered high attention over infrastructural facilities. Due to which, it invested a huge amount of infrastructure but failed to retain it is customers. However, due to loss of numerous customers, the profitability and market share of the organization of Oman Tel declined to a considerable extent as compared to many other rival players. In addition to market share, the organization of Oman Tel reduced it is market value and reputation that hindered it is prosperity and equity. Other than this, the organization of Oman Tel maintained a very low rate for mobile as well as fixed broad band facilities still the young generations of the society of Oman became highly attracted towards the service providers of Gulf. Therefore, in order to maintain it is position and image, the organization of Oman Tel decided to implement or develop modern telecommunication as well as broad casting devices. Only then, it might become successful in retaining it is customers for long run thereby amplifying their loyalty and trust over the brand. However, the above mentioned strategy proved extremely effective for the organization of Oman Tel that amplified it is customer base and position. Furthermore, development of modern telecommunication services enhanced the competitive advantage and portfolio of the organization that improved it is market share and popularity. Hence, due to the development of the above strategy, the net revenue of mobile retail enhanced by 5.1 percent, mobile broad band by 87.6 percent and fixed broad band by 33.1 percent. This proved extremely effective for the organization thereby enhancing it is sustainability and dependency within all other gulf service providers (OmanTel, 2014). The related and supporting industries to Oman Tel In today’s age of globalization and industrialization, introduction of mobile internet technology acted as a boon for the organizations operating in this segment. This is because; it helped the interested young generations of the society or nation to become attracted towards these brands or organizations. As a result, the profit margin and net operating income of these organizations enhanced to a significant extent as compared to others. Moreover, due to the introduction of mobile broad band facilities, the brand image and popularity of the brands or organizations presenting them also improved considerably. Due to the improvement of the net income of the organizations, the gross domestic product (GDP) and the gross national product (GNP) increased. Due to which, the economic condition as well as the CAGR rate might get increased that may improve the prosperity and status of the region of Oman. In addition to this, the extra generated revenue might be used for the reduction of varied types of difficulties such as poverty, redundancy, illiteracy etc. However, the similar related and supporting industries just like telecommunication might be oil and gas industries. This is because; oil and gas industries are also another extremely profitable industry that presents huge percentage of revenue towards the gross domestic product and gross national product. However, oil and gas industries might become profitable just as telecommunication, only if it comprises of export and import facilities. Only then, the organizations operating under this sector might become able to improve their brand value and market share that may enhance it is ranking and portfolio in the market of Oman among others (OmanTel, 2014). However, these revenues then might be utilized by the government of Oman with the development of numerous schools, healthcare unit is, colleges, industries etc so as to reduce the rate of unemployment and illiteracy to a considerable extent as compared to many other neighboring nations. Other than this, due to the introduction of varied types of new industries within the region of Oman, numerous intelligent individual might fulfill their career aims and goals that may reduce the rate of unemployment and poverty. Along with this, the living standard and life style of the poor individual might be improved that may amplify the economic status and fame of the region of Oman in the entire globe among others. Hence, it might be clearly depicted that both the industries such as telecommunication as well as oil and gas is extremely profitable for any country. Therefore, in order amplify it is profitability and market demand, the organizations operating in it, need to offer high concentration and attention over it. Only then, it is underlining strengths might get enhanced and the weaknesses may get reduced. However, due to reduction of the threats or weaknesses, the industry of telecommunication as well as oil and natural gas might improve it is position and competitive advantage in the nation among others. Furthermore, due to improvement of the strengths, the demand of the services and products of telecommunication as well as oil and gas might get enhanced that may increase it is profitability and net operating income to a significant extent among others (OmanTel, 2013). Hence, the loyalty and confidence of the customers towards the products and services of the telecommunication as well as oil and gas might get improved that may significantly amplify it is demand and values. So, it might be stated that in order to remain profitable and competitive within the eyes of the customers, it is extremely essential to improve the inner strengths that may reduce it is weaknesses or threats. Specific local characteristics about the firms and the nature of the competition in the telecommunication industry, including strategy, structure and rivalry As the import rate of varied equipments from United States, related to telecommunications sector increased to $ 31 million, so the industry of telecommunication reduced to import them. However, as numerous rival players are present with the segment of telecommunication so the rate of competition is also extremely high. Moreover, due to the presence of numerous rival players, the threat of substitute products is also extremely high. Maximum extent of the rival players desire to develop or introduce varied types of inventive or innovative products or services in order to fascinate a wide range of customers towards it is brand. As a result of which, the demand and prosperity of the products and services of the organizations might get enhanced thereby amplifying their profitability and market share as compared to many others (Oman Tel, 2012). Other than this, as the rate of bargaining power of the customers is extremely high, the organizations operating under the segment of telecommunications tried to offer the strategy of cost leadership and innovation (Grant, 2005, pp. 123-134). They developed varied types of inventive products of varying features with competitive price ranges. Due to which, the customers of varying age groups became attracted towards the products and services that may amplify the profitability and brand value of the organizations. Moreover, the position and competitive advantage of the organizations and it is products might also get enhanced to a significant extent as compared to others. Only then the switchover costs of the customers of Oman might get reduced that may improve the net income and efficiency of the products of the telecommunication organizations. However, due to the introduction of varied types of products and services, the rate of rivalry of the existing contenders might get reduced to a significant extent. Therefore, the above mentioned strategies such as cost leadership and innovation would be the best policies for the organizations of telecommunications in this age of extreme competitiveness and aggressiveness. Other than this, as the process of import became extremely costly for the organizations of telecommunications, so they tried to develop the products and services in their local markets with the help of experienced staffs and researchers. This proved extremely worthy for the organizations of telecommunications that amplified their portfolio and brand image in the market among others. Thus, it might be clearly depicted that due to the implementation of the above mentioned strategies and structure, the organization of telecommunications within the market of Oman might become successful and effective thereby amplifying it is reputation and market share (Oman Tel, 2012). Therefore, in order to retain the existing customers and to attract the new customers of varying age group and income groups, the strategy of introduction of inventive products and services might be the best effective one. Apart from this, the products and services need to be presented at a competitive cost so as to improve it is demand and value within the minds of the customers. The role and / or importance of the government in supporting the telecommunication industry In order to enhance the portfolio and ranking of the organizations of telecommunications, the government of Oman plays a vital role. In order to support these organizations like Oman Tel, the government liberalized the sector of telecommunication as per the rules and policies of WTO. As a result of which, almost 35 percent of the shares are presented in favor of Oman Tel. This amplified the brand image and reputation of Oman Tel in the market of Oman thereby enhancing it is position and equity. Other than this, in order to make the support of the government more effective in actual level, the organization of Oman Tel is now finding a reputed strategic investor so as to improve the fixed-line communication segment within the region of Oman. Apart from this, the organization of Oman Tel desires for a strategic investor in order to attain the insurance for the fixed-line communications. Only then, the position and competitiveness of the organization of Oman Tel might get amplified in the region of Oman that may increase the loyalty and reliability of the customers to a considerable extent. By doing so, the profitability as well as market share of the organization of Oman Tel might get enhanced that may increase it is portfolio and uniqueness among others (Oman Tel, 2013). In addition to this, the government of Oman also supported the telecommunication service provider, Oman Tel to develop varied types of advanced software equipments and techniques so as to fascinate a wide range of customers of varying demands and preferences. However, due to the presence of such support, competitive position and reliability of the organization of Oman Tel enhanced among it is rival players. Thus, it might be clearly revealed from the above mentioned points and facts that the government of Oman played a significant role and support for the telecommunication organization, Oman Tel that amplified it is equity and distinctiveness. Hence, it might be depicted that government support acted as a catalyst in improving it is portfolio and efficiency in the market of Oman that amplified it is popularity from the gulf service providers. Moreover, due to the development of varied types of advanced technologies and techniques, the organization of Oman Tel became successful in increasing it is customer base and profit margin. Thus, improvement of the customer base and loyalty in the market, the organization of Oman Tel reduced the threats of substitute products and competitive rivalry among the contenders (Oman Tel, 2013). What changes to the current government support, if any, present the recommendations? In order to amplify the opportunities of international trade of Oman, the government of Oman needs to maintain a stable political system. Only then, it might prove effective for the country of Oman to improve it is economic condition and position among other neighboring nations. Apart from this, the country might try to reduce the contributions of oil sectors over gross domestic product (GDP) thereby amplifying it is concentration over industrialization and privatization. Only then, the rate of unemployment within the country of Oman might get reduced that may improve the living standard and portfolio of the citizens (Zawya, 2012). Other than this, due to the presence of Free Trade Agreements with the nation of USA, the country of Oman comprises of the opportunities to penetrate the market of United States and improve the demand of it is products and services. Conclusion Conclusively, it might be stated that the organization of Oman Tel need to offer high concentration over it is research department in order to develop inventive products. Only then, it might become successful in amplifying it is brand value and prosperity in the market thereby enhancing it is position and competitiveness. Other than this, it need to present it is product and services at a quite lowest price from others in order to attract the customers towards itself and improve it is demand and market value. References Grant, R, M. 2005. Contemporary Strategy Analysis. London: Sage. Oman Tel, 2010. Annual Report, 2010. [Online]. Available at: http://www.omantel.om/wpresources/files/Annual%20Report/2010/Annual%20Report%20-2010.pdf. [Accessed on 9th May, 2014]. Oman Tel, 2011. Annual Report, 2011. [Online]. Available at: http://www.omantel.om/wpresources/files/Annual%20Report/2011/Annual%20Report%20-2011.pdf. [Accessed on 9th May, 2014]. Oman Tel, 2012. Annual Report, 2012. [Online]. Available at: http://www.omantel.om/wpresources/files/Annual%20Report/2012/Annual%20Report%20-2012.pdf‎. [Accessed on 9th May, 2014]. Oman Tel, 2013. Oman Tel group Performance. [Online] Available at: http://www.omantel.om/wpresources/files/Annual%20Report%20English%202013/files/assets/basic-html/page13.html. [Accessed on 9th May, 2014]. Oman Tel, 2014. Online services of Oman Tel. [Online]. Available at: http://www.omantel.net.om/. [Accessed on 9th May, 2014]. OmanTel, 2014. About Oman Tel. [Online]. Available at: http://www.omantel.net.om/. [Accessed on 9th May, 2014]. Times of Oman. 2012. Article on Omantel to continue to invest in telecom network development. [Online]. Available at: http://www.timesofoman.com/News/32348/Article-Omantel-to-continue-to-invest-in-telecom-network-development. [Accessed on 9th May, 2014]. Times of Oman. 2014. Omantel posts 18 per cent growth in net profit at OMR34m. [Online]. Available at: http://www.timesofoman.com/News/33532/Article-Omantel-posts-18-per-cent-growth-in-net-profit-at-OMR34m. [Accessed on 9th May, 2014]. Zawya, 2012. Omantel_to_continue_to_invest_in_telecom network_development. [Online]. Available at: https://www.zawya.com/.../Omantel_to_continue_to_invest_in_telecom_%20network_development-ZAWYA20140413031820/. [Accessed on 9th May, 2014]. 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