Threats of Substitutes - Essay Example

In spite of the highly competitive environment, entrants face a substantial amount of barriers to making their place in the Australian market. Major concerns for Miller Ltd are; monopoly of the premium service providers, keeping pace with technological advancements, and regulatory set-up for the service providers. The high cost of establishing a network and marketing expenses are also potential barriers but are no issues for Miller Ltd. due to the given financial liberty. On the other hand, four established firms have a sufficiently firm share in the market, leaving no place for new entrants. Mergers of existing power players like Vodafone and Hochstein also made the situation more vulnerable for entrants, thus making them mighty and unbeatable. For better hold on coverage, working in collaboration with the government is highly beneficial for entrants (ZDNet Australia).

Buyers are the driving force for providers; in order to keep them, loyal Miller Ltd. needs to provide an edge in the price for competitive advantage.

Mobile service industry in Australia is multiple sectors. In a flourishing industry like Australian telecommunication, monopoly can’t survive in today’s market. The market is diverse which includes manufacturing of hardware, carriage service providers (CSPs), content service providers, and retailers.

The report by Economic access and ATMA briefly describe the market. Ericsson Australia, Nokia Siemens, and Alcatel-Lucent are infrastructure providers in the hardware sector. Nokia, Samsung, LG, i-Mate have a market in consumer goods. CSPs provide services by utilizing carrier network infrastructure and have different levels; mobile telecommunication carriers in Australia are; Telstra, Vodafone, Optus, and Hutchison’s ‘3’ and Orange. Resellers services include; Primus Mobile, AAPT, Virgin mobile, B Digital, DigiPlus, Sim Plus, People TelecomM8 Telecom, and Dodo Mobile. MVNOs or Mobile Virtual Network Operators are basically wholesalers and provide value-adding services.B Digital, Revolution, People telecom Primus Telecom and Boost Mobile are a few to name. Content service providers, aggregators, and program developers are other dimensions of service providers; Legion Interactive, Touch, and Infospace are the main content aggregators. CSPs have their own retailers like Hutchison’s ‘3’ but other non-branded retailers like Crazy Johns and non-specialty stores provide unbeatable services.

Competition is getting tougher between the established firms, price is getting cheaper and demand for better and advanced services is increasing every day. Four main carriers Telstra, Optus, Vodafone, and Hutchison have a market share of 97.7 %, and resellers have limited ability to fight for share on a price basis (Economic Access 2008). Apparently diverse and flourishing market is in the hold of one carrier with 95% of the population. The whole situation is dependant on pricing which has caused a stagnant and uncompetitive situation in business. According to the Economic Access report, the market share of mobile network carriers by revenue in 2007 is; Telstra 42.6%, Optus 31.4% Vodafone 16.8%, Hutchison 8.9%, and other 0.3% (2008).

Itim International statistically presents Hofstede’s Cultural Dimensions for Italy and Australia.

(Hofstede’s dimensions for Italy, source: itim International)

(Hofstede’s dimensions for Australia, source: itim International)

Itim International statistics state Australia is 36 on the Power distance index, 90 on individualism, 61 on Masculinity, 51 on Uncertainty avoidance index, and 31 on long-term orientation. On the other hand, Italy is 50 on the Power distance index, 76 on individualism, 70 on Masculinity, and 75 on the Uncertainty avoidance index. Australians are coming towards individualism and Italians have achieved quite a reasonable status on individualism, but both can be considered moving ahead in PDI.On Masculinity,61 and 70 indicate an almost similar situation in the assertive nature of cultural values. On Uncertainty avoidance, Australia scores 51 compared to 75 of Italian culture UAI is relatively low in Australia which means better business for Miller Ltd. In addition to these four, the long-term orientation of Australia is 31 which suggests persistence in customer behavior. On orientation scale, Australians are interested in job security and have short term orientation (Macfarlin and Sweeney 2008, 127)

Hofstede defines culture as the collaborative mental programming of people (Thomas 2003, 187).There is a clear observation of similarities between Australian and Italian culture. It suggests a great deal of business for Miller Ltd. in terms of selling innovation, ideas, and lifestyle niches. Australian culture is more or less the same or little developed than Italians. A steady but considerable shift towards modernity and acceptability can be observed clearly. As a result, Miller Ltd would rather get better chances to flourish more efficiently in Australian culture than Italian.

Recommendations

Investment in technological advancements; 3G, wireless and internet services, wide coverage network, better download speed is in high demand.

Pricing competitiveness is the only way to survive. Cheaper the price more likely is the increase in the number of customers.

Miller Ltd. is recommended to work in collaboration and in assistance with the Australian government in order to get complete and efficient access in rural and regional areas.