The Stakeholders of the Ooredoo - Research Paper Example

? Company analysis of Ooredoo (Previously known as Q-tel) Ooredoo: vision, mission ment, goals, and values Ooredoo group is a leading player in the communications industry operating under the parent group Ooredoo Q.S.C. which was formerly Qatar Telecom Company. The parent company is listed in the Qatar stock exchange and the Abu Dhabi stock exchange. The Ooredoo group is a key communication service provider in the region of Middle East, North Africa and South East Asia and caters to around 83 million customers all over the world. The company is headquartered in Doha, Qatar and is growing ambitiously by capturing the opportunities that exist in the emerging market in the world. The Ooredoo Group operates with a wide range of brands in the communication industry and provides a collection of services which include mobile telephones, broadband, digital technologies and fibre technologies to serve their customer and the business industry. The core vision of Ooredoo is to enrich the lives of the people by being the leading communications company at the international stage. The Ooredoo group is committed to let their customer live their aspiration. This has been achieved for a huge customer base in international societies who are closely connected with their operators. The operators of Ooredoo keep close linkages with the communities and fulfil their daily needs. The markets of Ooredoo are present in Iraq, Indonesia, Oman, Algeria, Tunisia, Kuwait, Maldives, Palestine and Qatar. The chairman of Ooredoo, H.E. Sheikh Abdullah Bin Mohammed Bin Saud Al Thani enjoys the status of minister of state and has been instrumental in implementing effective corporate governance, corporate accountability and maximizing the wealth of its shareholders. In line with the vision statement, Ooredoo has a mission to become the leading international communications company in the world. In order to fulfil their mission, Ooredoo group has undertaken key acquisition of the Kuwait based Watania group which was at that point of time the largest communication company in the Middle East. In order to fulfil its short term and long term goals, Ooredoo conduct investor relation programs. The investor relation programs by Ooredoo are aimed at disseminating correct financial information of the company to its shareholders, investors and other users so as to provide them with a fair assessment of company valuation. For this Ooredoo maintains underlying ethics of true financial disclosures. Ooredoo group is committed to fulfil its corporate social responsibility by extending support to the communities and groups for charities in Qatar thereby returning the benefits to the society. The group also has a vision of contributing actively to social causes in the field of healthcare, education, sports, environmental aspects and welfare of the society. Ooredoo supports the national program for spreading awareness towards electronic wastes and their disposal techniques which helps in protecting the environment. Apart from that the company sponsors school events, educational projects. Ooredoo also supported construction of a full-fledged kidney dialysis centre in Qatar. As an outcome of adhering to the core values in line with the vision and mission statement, Ooredoo has achieved an eight fold growth from $800 million to $7.5 billion at the end of 2010 under the leadership of its management. Identification of stakeholders The stakeholders of the Ooredoo have increased as the company has expanded its operations in several markets all over the world by catering to the emerging needs in telecommunication. Ooredoo being a leading international communications company has both internal as well as the external stakeholders. The chairman of the Board of Directors, the governing body, representatives of the government and representatives of the private sector present in the governing body, the shareholders of the company and the employees of Ooredoo comprise of the internal stakeholders. The framework of policies of the organisation and implementing of those policies are the key responsibilities of the internal stakeholders of Ooredoo. The internal stakeholders are associated with decision making and implementation in order to fulfil the short term and long term goals of the company (Plunkett, 2008). The accountability of work to manage and carry out the services of the company in line with the core values of the firm in order to fulfil the mission statement and vision of the company lies with the internal stakeholders of Ooredoo. Ooredoo is strategically backed by the government of Qatar with the representatives of the government present in its Board of Directors. Ooredoo is a state run communications company with the Qatar government holding the largest stake of 52%. The external stakeholders of Ooredoo group include majorly the customers, regulatory authority, suppliers and creditors, partners or operators serving directly to several communities and the community to which Ooredoo is providing their services in communication (Oxford Business Group, 2008). The customers, regulatory authority, supplier and creditors, operators and the community at large are not directly affected by the financial health of Ooredoo. Unlike the Chairman and the Board of Directors, management and employees, shareholders of Ooredoo group, the external stakeholders or the customers, regulatory authority, suppliers and creditors, community in which Ooredoo exists would not be directly affected by the performance of the company. The customers of Ooredoo would look to receive uninterrupted and high quality services in the specific business lines of the company which includes mobile telephones, broadband services and corporate managed services if they choose to avail the services of Ooredoo. On payment to Ooredoo, the customers would be concerned of receiving services in communication irrespective of the profit or losses incurred by the company. On the other hand the managers and employees of the company would be directly affected as their bonus would be reduced in case Ooredoo incurred a loss. Also in absence of effective corporate governance, the wealth of internal stakeholders of Ooredoo such as the government who has majority stake in Ooredoo group would diminish. The creditors or suppliers of Ooredoo would be keen to receive repayment of the credits that they have offered to Ooredoo Group. The suppliers and contractors who have taken franchisee from Ooredoo group for providing communication services to communities and business groups would be interested in receiving their commission. The communities and societies in which Ooredoo is operating would be interested to see that no adverse impacts are being created due to the services of Ooredoo. The Supreme Council for Information and Communication Technology is the regulatory authority for communications industry in Qatar. They would be interested to monitor that Ooredoo confines its operations in the regulatory framework. Claims of stakeholders and response of the company to their claims Among the internal stakeholders, the Qatar government forms a major stake in the state-run communication company with an international presence. The government along with other internal stakeholders like the Board of Directors, senior management and employees would have major claims on the company’s performance through earning of as much revenue and increasing profits over the years. The company’s performance trend would have positive impact on the claims of the internal stakeholders. The existence of the internal stakeholders, their earnings and maximization of wealth of the shareholders would depend on the financial performance of the company. The Ooredoo group has adopted strategic policies of tapping the needs of emerging markets in Algeria, Palestine, etc. as a part of its expansion plans. Effective corporate governance and increased corporate accountability over the actions of the management and also undertaking key acquisitions has led to the growth of the Ooredoo group over the years. The financial performance of the group is given below. Ooredoo group has increased its earnings of consolidated revenue consistently from 2009 to 2012. The earnings before interest and tax have also shown an increasing trend over the years. The shareholder base has increased over the years showing the market has shown increased confidence on the company’s performance and the net profit attributable to shareholders have increased over the years. Thus increase in communication services network of Ooredoo group have enabled their customer to receive customized services in communication and helped them to realize their dreams. The external stakeholders’ claims are not directly related to the state of welfare of Ooredoo group. The customers claim to get competitive pricing in the communications market for availing the services of the Ooredoo group. The business groups claim to avail enhanced corporate managed services for efficient operation. The Ooredoo group tapped the needs of emerging markets and at the same time catered to the domestic market of Qatar with the help of operators who established close linkage with the societies who are recipient of their services. The creditors and suppliers claim for timely receivables so that long term and trustworthy business relationship could be maintained with the Ooredoo group. Ooredoo group have responded well to their claims by keeping their current liabilities low in comparison to their asset base. The company has also maintained a strong credit rating which has also helped to gain confidence among the creditors. The current ratio of Ooredoo shows good reflection as a result of which the company have been able to make payments to their creditors and suppliers in the contracted time limit. The claim of the regulatory authorities for working with the framework has also been fulfilled by the Ooredoo group by ensuring they abide the laws of communication, renew their licence in time and get approvals of tariff modifications (Ibpus.com and USA, 2012). The Ooredoo group has international presence in other countries as well by providing satisfactory communication services. The red portions highlighted in the world maps shows the regions in which wire line communication service would be launched by Ooredoo group. The societies to which the Ooredoo group caters also claim that all adverse impacts of the company operations are minimized and are also concerned about the development of the society through the company’s contributions. Ooredoo has responded through corporate social responsibility by contributing in the educational campaigns, setting up kidney dialysis centre in healthcare sector, reducing electronic wastes in the environmental protection issue and also active contribution in sports and social welfare activities (Ooredoo, 2013). Suggestions for improvement of the firm’s strategy with regards to various stakeholder groups The interest of the stakeholders of Ooredoo must be given top priority looking at the aggressive expansion and growth of the company over the period of time. The stakeholders are directly or indirectly related to the performance of the company. The shareholders have invested their money and the employees rendered their services. Om the other hand the customers paid for their services and the creditors have offered products and time for credit. In order to safeguard the interest of the stakeholders, the company should undertake strategic policies for implementation. Ooredoo group should adopt effective strategies as a part of their commercial, social, political, economic and environmental agenda. Engagement by the senior management in the international strategy summits in the communication sector would keep the Ooredoo group updated with recent industry trends. The company would need to focus on ensuring effective corporate governance in the long run. The implementation of core values like transparency in operations, dedication towards service, strict monitoring of operations and training, harnessing and retaining talent for future would contribute to sustainable growth of the Ooredoo group and expansion of its markets. Ooredoo group should undertake effective implementation of the policies of the firm which would support the maximization of shareholders’ wealth. Ooredoo would need to provide a workplace where continuous improvement of work could happen and at the same time provides an opportunity for the employees to excel in their services. Ooredoo which operates through a channel network of operators should take the attrition rate of employees and distributors into consideration. Best accounting and auditing practices must be adopted by the company and true financial disclosures are to be given utmost priority by company so that it is aimed at safekeeping of investors’ interests. Ooredoo should carry out research and development to bring about advanced technologies and innovative ways of providing uninterrupted and quality services in communication. The company should leverage on the adaptability and experiences acquired as a result of services provided in the international stage (Ibpus.com and USA, 2012). Ooredoo group should actively participate in sustaining its contribution to the environment, societies and communities in which they exist. More contributions in the field of social welfare, health care, education and environmental protection need to be undertaken in all the countries where Ooredoo is running its business of communication service provider. The company strategies should be focussed on creating and sustaining long term relationships with the stakeholders and optimal utilization of available resources. Thus by acquiring trust and delivery of enhanced level of communication services would help the company to realise its vision and fulfil the interest of its stakeholders. Ooredoo: Prioritization of the claims of various stakeholder groups It is important to prioritize the claims of various stakeholder groups that are intended to improve the profitability and quality of business operations of Ooredoo group. An assessment of the parameters of impact and influence of the stakeholders in the Ooredoo’s business would help to prioritize the claims of various stakeholder groups. The order of prioritization should involve assessment of the stakeholders’ influence and impact. The assessment should consider responses and feedbacks from the all the hierarchies of Ooredoo group starting from the directors, employees, shareholders, suppliers, customers and assessment team members. The assessment should not be done in an isolated fashion with limited responses. The highest priority should be given to that stakeholder group by Ooredoo that has the largest size and impact on its business. The customers are the benefactors of the Ooredoo who have accepted their services in the market as a result of which they could realize their dreams. The growth in revenues and earnings over the years is due to a large turnover of their customers and thus considering its impact on the operations of the group, Ooredoo should give top priority to their customers. Next priority should be given to the employees of Ooredoo group who are the key to provide the services to several nationalities. It is because of their adaptability, hard work and perseverance that have enabled Ooredoo to become a leader in the world stage. The board of directors and the management has fulfilled their accountability of ensuring effective corporate governance and accountability. The decision makers are positioned highly in the priority list of Ooredoo group. The Ooredoo group attaches high importance towards their corporate social responsibility. It is the responsibility of the Ooredoo group to return the benefits back to the societies and environment in which they exist. Thus the communities are also important in the operations of Ooredoo. The regulatory authority that monitors any deviation of the group’s operation from the set framework is to be highly considered by Ooredoo in its business activities. Analysis of the nature of competition in telecommunication market of Qatar: Porter’s Five Forces Model Porter’s Five Forces Model would help to understand the intensity of competition in the communications industry and also help to determine the attractiveness of the communications market. Thus with the help of Porter’s five forces, an analysis of the nature of competition in the communications market has been carried out. The five forces of porter are namely threat of new entrants, rivalry in the competitive market, threat of substitute products and bargaining power of the customers as well as the suppliers (Roy, 2011). The pie diagram given below shows the market capitalization of Ooredoo in the international stage. Ooredoo has highest customer base in Indonesia and among the lowest customer base in Qatar. Although Ooredoo provides end to end solutions to customers and business groups in communication, the communications market is highly segmented. The customers can be divided into various sections according to their purchasing power and thus matches their unique requirements according to the services of several communications companies. Thus the market is highly competitive and would attract new investors and joint ventures thereby posing high threat of new entrants (Hill and Jones, 2007). The communications market offers alternative choices between wireless, wire line products and corporate managed services which would be accepted due to the emerging needs in several societies. The threat of substitute products would be moderate as the market is already reaching a saturation point. Ooredoo has planned to launch its 4G services in Qatar by launching about 100 antennas in the region. With the increase in demand of the communication sector, several cross industry investments have started to happen. Companies like Amazon, Google are thinking about business in communication sector thus making the competitive rivalry in the market very high. As there are a lot of service providers in the communications industry, the customers have ample choice to select their services and hence the bargaining power of the customers would be very high. The suppliers to companies also increased with the increase in competition and thus the bargaining power of the suppliers would be moderate. Telecommunication industry of Qatar: Outlook for competition over the next ten years focusing on potential new entry, demand, and buyers The increasing demand in communication forecasted future country wide demand of broadband services in Qatar. Qatar has envisaged a wide spread broadband network across the country using high speed fibre network in the coming years. The role of the regulatory authorities in the field of communication service becomes extremely important in the growing demand of enhanced communication services of the buyers. The entire project would throw opportunities for the potential new entrants. The new entrant could tap the emerging needs of the market to create their presence in the attractive and profitable industry of communication. Ooredoo has also planned to launch it 4G services in Qatar at the initial stage. This provides a lot of scope for new operators to enter the field of communication services in Qatar. By launching the 4G services, Ooredoo would be able to supply against the modern and emerging demands of the buyers. The prospect of new entrants and expansion of communications market in Qatar would see the growth in economy of the country as a result of key contributions from the communications industry apart from the oil and gas sector in the next ten years (IctQATAR, 2011). References Hill, C. W. L. and Jones, G. R. (2007). Strategic Management: An Intergrated Approach. USA: Cengage Learning. Ibpus.com and USA, International Business Publications. (2012). Qatar Business Law Handbook: Strategic Information and Basic Laws. USA: Int'l Business Publications. Ibpus.com and USA, International Business Publications. (2012). Qatar Investment and Business Guide: Strategic and Practical Information. USA: Int'l Business Publications. IctQATAR. (2011). Qatar’s Digital Highway to the Future. Retrieved From: http://www.ictqatar.qa/en/news-events/news/qatar%E2%80%99s-digital-highway-future. Ooredoo. (2013). Corporate Social Responsibility (CSR) Strategy. Retrieved From: http://www.ooredoo.qa/en/CORPORATE_SOCIAL_RESPONSIBILIT?CSRT=6112961038557035331. Oxford Business Group. (2008). The Report: Qatar 2008. UK: Oxford Business Group. Plunkett, J. W. (2008). Plunkett's Telecommunications Industry Almanac 2009. USA: Plunkett Research, Ltd. Roy, D. (2011). Strategic Foresight and Porter's Five Forces: Towards a Synthesis. Germany: GRIN Verlag. Read More