Market Analysis of WiMax System 802.16e Introduction to Uganda - Case Study Example

Market attractiveness report Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 08, 12, 2010 Executive summary This analysis provides market analysis of WiMax system 802.16e introduction to a chosen country, Uganda because of the balanced benefits and risks trade off. The market segmentation chosen are consumer need analysis and profiler. PESTLE analysis shows the political, economical, social, legal and environmental viability of the country for it to be suitable for market entry; Uganda meets the threshold of these factors. More factors that will lead to success of the product in the country are provided and challenges that are likely to be faced in market entry are also analyzed. Joint venture to the market is chosen because of market potential of MTN Uganda. Table of contents Executive summary 3 The chosen product 4 Basis of market segmentation 5 Key target segments for the product 5 PESTLE consideration for the product 6 Potential market country analysis 7 Factors that will lead to success of the product 8 Recommendations on Market entry strategies 9 References 11 Appendices 12 There are a number of factors that should be considered before making market entry to an international country because of the risks associated with a new country and market. Proper analysis of factors involved will enhance informed and wise decision making before venturing to the market. Market entry to another country can be affected by political stability, economical capability of the country and legal restrictions of the country. It is therefore important to consider these factors. This analysis provides fundamental analysis for WiMax 802.16e entry into a foreign country. The chosen product The chosen product for international market is WiMax system which is the latest IEEE standard 802.16e provides wireless and broadband services to a given metropolitan region. This new system provides broadband wireless access by using both point-to-multipoint and multipoint- to multipoint microwave link. WiMax system uses Line of Sight (LOS) in data transmission but this new 802.16e is not limited with the LOS requirements because of its special feature of mesh technology that enables transmission without necessarily connecting with the transreceiver antenna. This is the main feature that will leverage the system in international market since most of the WiMax system installed in many countries especially developing countries are highly dependent on LOS and have limited distance coverage of less than 31 miles. Basis of market segmentation Market segmentation of this WiMax system will be based on two major market segmentation variables namely customers’ needs and profilers. Customer needs which will be based entirely on market research will reveal if there is adequate need for the product in the chosen country based on country analysis factors. As elaborated by Bennett and Blythe (2002) the trade off of the cost, benefit and risks will be important in determining the viability of the approached market. On the other hand, profiler option will be important in enlightening other important factors such as geographical, behavioral, psychographic and demographic consideration of the market. Key target segments for the product The key target segments of the product are Mobile Service Providers Company’s, Internet Service Providers companies (ISP), organizations and even individual people. The rationale for this chosen segment is the fact that WiMax system will increase their efficiency in terms of internet speed and reliability since WiMax system is not affected by natural disasters such as floods or earth quakes. WiMax system is also cheap and thus cost a major cost saving product for ISP companies and cellular service providers of (Global System for Mobile) GSM network in these countries. PESTLE consideration for the product Political- There should be sound political atmosphere in the country, the political leadership ought to be less corrupt and that the country’s political atmosphere is stable. The country should have sound social atmosphere with minimal possibilities of social unrest which might increase the cost of doing business. In essence the political environment of the country should be predictable. Economic- The country should at least feature in top 150 countries in terms of Gross Domestic Product (GPP) which reveals the consumers purchasing power. The country ought to be having a considerable economic development of at least 4 % per annum. This will help in enhancing a sustainable market possibility since the purchasing power of the country’s consumers is increasing. Social- The social issues to be considered mainly in the chosen country ought to be conducive for business. The religious aspect of the country’s population ought to be sound in order to enable good business environment because religious conflicts are mainly the source of social unrest coupled with poor political leadership (Bennett & Blythe 2002). Technological- The technological potentials and progress of the country targeted should also be on a steady increase as the technological products in this case will not get an easy market in countries with low technological acceptance. The country should therefore have a number of Mobile Service Providers Company’s, Internet Service Providers companies (ISP). Legal-The cost of starting a business is always affected by the legal restrictions of the country since it usually leads to increased cost of doing business. The legal requirements of the country should therefore be conducive and reasonable to a foreign investor. Environmental- The environment of the country should be conducive for doing business; some of the important environmental considerations include the geographical location of the country. The infrastructure of the road network of the country which will reduce the cost of reaching consumers in different locations within the country ought to be present in the chosen country (Kleinemaß 2007). Potential market country analysis The chosen countries are therefore Mexico, Uganda and Sudan. Mexico is a developing country with a GDP of 874,810 Million USD and it is a good market for IT related products because of their keen interest to reach the potentials of their United States neighbors. The major hindrance to their market is their strict legal requirements and market exploitation from their neighbors United States. Uganda is a steady growing economy with sound political and social environment compared to their better developed neighbor Kenya. Their GDP is about 15, 804 Million USD which shows that they have a considerable developing consumer purchasing power. Sudan on the other hand have a GDP of 54, 644 Million USD and thus superior to Uganda in terms of their consumer purchasing power. The major problem with the country is its volatile political leadership that has recently resulted in political upheaval. Political stability, less cases of corruption and predictable leadership makes Uganda the most suitable country to launch the WiMax product. The balanced environment ranging from political stability, economic and legal restrictions adds to the Uganda’s suitability as a place to launch WiMax product. More so, extended research on market analysis has revealed that the country has a better susceptibility of technology related products fostered by their social culture which is keen to new technologies. Based on these issues, Uganda will be the first choice international market for WiMax products. Factors that will lead to success of the product There are several factors that will contribute to the success of the product in Uganda, the first and most important factor is the ready market in the region. Since 2007, there is only one company BreezeMax that has won the award of deploying WiMax system based on IEEE 802.16 standard. The IEEE 802.16 standard is an older version of the WiMax 802.16e by two generations which essentially means that it is twice as effective as compared to the deployed IEEE 802.16 by BreezMax, more so the leading GSM provider MTN Uganda has used the equipment for provision of data services to its clientele. The superiority of the WiMax 802.16e will be its leveraging point in market entrance. Since there are less strict legal requirements for the system deployment, this will be another added advantage to the product deployment. Three challenges of introducing the product to the market There are three major challenges that the product will face in the introduction to the market, these challenges are the already established WiMax 802.16 (Metropolitan Area Network) (MAN) introduced and deployed by BreezeMax and already adopted by MTN Uganda. Since the cost required for doing business from legal requirements of the country will also increase the cost of doing business and thus affect market entry strategies. The options for market entry strategies will also be a major obstacle because a wrong entry strategy will result in diminished market entry (Tielmann 2010 Recommendations on Market entry strategies The possible consumers of the product are Mobile Service Providers Company’s, Internet Service Providers companies (ISP), organizations and even individual people. Before market entry strategy is developed, a close consideration of the existing competitor BreezMax will be made using SWOT analysis to uncover its weaknesses and strengths that will be vital in making a market entry. The entry pricing strategy will be lower than the existing slower IEEE 802.16 deployed by BreexeMax. Because of the lower pricing and the more efficient and fast data rates transfer offer by the WiMax 802.16e which increases interoperability and mobility, there will be a substantial demand for the product given the technological susceptibility of the country. The size of the market is also significantly vast and sustained by considerable consumer purchasing power fostered by sound economical, social and political environment (Lymbersky 2008). The most appropriate market entry strategy for WiMax 802.16e is through joint venture with MTN Uganda which is the leading telecommunication provider of GSM network (DePamphilis 2009). Since the WiMax System easily integrates with the network infrastructure of GSM, a wide clientele can be easily acquired through this joint venture. The existing ISP providers in the country will also independently purchase the equipment for their MAN usage within the country’s major cities like Kampala. In summary, the recommended market entry strategy is joint venture and considerable separate independent retail sales of the equipment. References Bennett, R & Blythe, J 2002, International marketing: strategy planning, market entry & implementation, Kogan Page Publishers, Thausand Oaks. DePamphilis, D 2009, Mergers, Acquisitions, and Other Restructuring Activities: An Integrated Approach to Process, Tools, Cases, and Solutions, Academic Press, Canberra. Kleinemaß, M 2007, International Business: Foreign Market Entry Principles, GRIN Verlag, Sydney. Lymbersky, C 2008, Market Entry Strategies: Text, Cases and Readings in Market Entry Management, Christoph Lymbersky, Sydney. Tielmann, V 2010, Market Entry Strategies: International Marketing Management, GRIN Verlag, Sydney. Appendices Uganda GDP 15, 804 Million USD Sudan GDP 54, 644 Million USD Mexico GDP 874,810 Million USD Country of choice Strengths Weaknesses Uganda Sound political environment Developed susceptibility of technology Less government restrictions Sound economic growth The economy still developing Unpredictable potential market Sudan Sound economy Fast developing economy because of natural resource and vastness of the country Unpredictable political turmoil, no established leadership, High likelihood of political upheaval Mexico Fast developing economy Ready technological market Higher consumer purchasing power Potential US competitors with established resources coupled with nearness to the country. Read More