Strategic Analysis: Telecommunication Industry - Essay Example

STRATEGIC ANALYSIS By 17th , March, Telecommunication Industry The telecommunication industry is the most thriving industry across the world. Thus, it is important to analyze the macro environment for this industry so as to identify the factors that boosts or affects its success. Macro environment consists factors such as economic, technological, natural, demographic, cultural and political factors of the market place. These factors represent other two organizational success factors known as opportunities and threats on which the industry does not have control over. Fortunately, there are tools that can be used to analyze the industry’s macro-environment (Mithas, Tafti& Mitchell 2013, p 511). One of these tools includes the PEST analysis, which stands for Political, Economic, Social and Technological analysis. PEST Analysis Political environment consist of political parties, laws, individuals and government agencies that influence the success of industry politically. This kind of environment is important from the industry’s point of view because the marketing decisions are broadly affected by the developments in this environment. The economic environment includes the factors that affect the consumer’s power of purchasing and the spending patterns (Peng & Nunes 2007, p 230). As far as the industry is concerned, the economic environment is very important because it can control what the industry is to produce, how it should produce and the type of consumers to use their products. The social environment represents the brand image of the industry. This is very important as it influences the purchasing power of a customer. It also portrays the demography of a place in terms of age, gender, location among others. This is a major interest for telecommunication marketers because it involves people and people make up their markets. The technological environment consists of the most dramatic forces that affect the industry’s marketing strategies due to the technological advances. These forces create new technologies and also create new products and market opportunities. The telecommunication industry is now packed with advance technological tools that help their customers do much more (Peng & Nunes 2007, p 231). The industry’s life cycle undergoes various stages, which include the initial development, the growth stage, decline stage and the maturity stage. Each stage determines how the industry is performing in the market place. Three Mobile The Three Mobile is one of the fastest growing telecommunication industries in the world. The areas that need internal company analysis in this industry can be analyzed using SWOT analysis. The SWOT analysis focuses on the Strengths, Weaknesses, Opportunities and Threats of the company. This analysis is recommendable for the company so as to identify what its problems are, resolve them and improve their businesses. Strengths A strong brand name, excellent advertising, high brand loyalty, co-sponsorship with big events are a few strengths that boost the resource capabilities of the Three Mobile Company. These strengths are qualities that improve the competitive advantage of the company. For it to achieve this competitive advantage, it needs to focus on the human capital it possesses, the types of assets it owns, the market experience, the best resources to use and where their business makes its money from. Once they focus on this, they need to maximize on the strengths (Ha & Coghill 2006, p 112). In the long run, the company will maximize its profits and gain competitive advantage. Weaknesses The company’s weaknesses focus around what the company is not doing well. The pricing decisions are critical for Three Mobile industry. The global operations and services too are an issue as they can hurt the operations of the company. Company weaknesses place a company at a disadvantaged place in the marketplace since they deprive competition with the competing companies. The company’s business may be losing money in a certain area or it could be operating without resources that can better their operations (Coman& Ronen 2009, p 5680). It is important for a telecommunication industry such as Three Mobile to identify their weaknesses so that they can be eliminated to avoid future problems. In fact, the company’s internal analysis can be inaccurate if all weaknesses are not identified. Opportunity By SWOT analysis, the company’s opportunities include those variables that are out of its control but can benefit its business operations (Ha & Coghill 2006, p 113). The ever growing telecom market, the multifold expansion that helps to build a cult in customer’s mind and the leverage strong brand are some of the opportunities that Three Mobile benefits from. These opportunities will really help this company in long run as the company can use them to maximize its existing strengths. It is important for industries such as this to keep doing an internal analysis from time to time so as to know the types of opportunities they have to maintain proper markets. Threats By SWOT analysis, the threats of a company focus on those issues that come from outside environment and impact the company negatively (Bernroider 2002, p 570). The threats that affect Three Mobile industry include competitors low price offering, the portability of mobile number and the saturation of points in a basic telephony service. If the company does not identify these threats or if it does not take care of them, they will harm the company’s business operations which will decline its level of success. Therefore, the company needs to do an internal company analysis from time to time to be able to identify them. Business/Corporate Strategies Business-level strategies are similar to corporate-level strategies as they both focus on the overall performance. However, corporate strategies mainly focus on the entire strategic scope of the business enterprise. Business strategies are targeted upon a particular product, market or industry. In large companies such as Three Mobile, individual business units are combined to form strategic business units. These Strategic business units (SBU’s) represent a group of related business units and each of these units have its own competitors and its own unique strategy. The main focus of business strategies are mostly on a particular product or service hence business strategies mainly involve decisions concerning individual products within a product line or service line (Abdi & Awartani 2013, p 213). Additionally, business strategies are primarily concerned with the coordination and integration of business unit activities so that they can conform with the organizational strategies. They also focus on the development of distinctive competencies and competitive advantage in each unit. Again, business strategies are concerned with the identification of product or market niches hence develop strategies for competition in each line. In a single-product company, business-level strategies and corporate level strategies are the same (Abdi & Awartani 2013, p 215). For instance, if Three Mobile company produces only one line of mobile phones, its corporate strategy is chosen by its market definition, mobile service provider, though the business is still the same, a mobile provider. Thus, in a single-business organization, business strategies and corporate strategies overlap each other to the point that they are treated as one united strategy. For most organizations, business strategies are made to support corporate strategies. Works Cited Abdi, M.R. & Awartani, A. 2013, "Business Strategy And Corporate Identity Using Balanced Scorecards", Journal of Current Issues in Finance, Business and Economics, vol. 6, no. 2, pp. 213-235. Bernroider, E. 2002, Factors in SWOT Analysis Applied to Micro, Small-to-Medium, and Large Software Enterprises:an Austrian Study, European management journal, 20(5), 562-573. Coman, A., & Ronen, B. 2009, Focused SWOT: diagnosing critical strengths and weaknesses, International Journal of Production Research, 47(20), 5677-5689. Ha, H., & Coghill, K. 2006, E-Government in Singapore—A Swot and Pest Analysis, Asia-Pacific Social Science Review, 6(2), 103-130. Mithas, S., Tafti, A., & Mitchell, W. 2013, How a firm’s competitive environment and digital strategic posture influence digital business strategy, Mis Quarterly, 37(2), 511-536. Peng, G. C. A., & Nunes, M. B. 2007, Using PEST analysis as a tool for refining and focusing contexts for information systems research, In 6th European conference on research methodology for business and management studies, Lisbon, Portugal pp. 229-236. Read More