Emirates Telecommunication Corporation is an organization in UAE that was formed in 1976. The company operates both in the local and international markets. Currently it has initiated its operations in 18 countries. It provides its services to businesses, consumers, international telecommunication companies, content providers, internet service providers and mobile operators. These services that are provided to the telecommunication industry include SIM card manufacturing, technical and managerial training, data and voice transit, land cable services and clearing house services among others. The company’s mission is to extend the reach of the people through various strategies. Among the organizational goals is expansion of additional international markets and being the leader in terms of innovation and technology advancement. Several strategies have been devised and have helped the organization in its operations. They include differentiation strategy, focus strategy and the cost leadership strategy. The company’s SWOT analysis seems to be favorable. Strengths that the organization enjoys are the leading market position coupled with market experience. Weaknesses entail impairment in several markets and fluctuations in profitability indicators that are deemed necessary for the organization. Opportunities entail increased demand for broadband and mobile services, while threats emanate from the competitive environment. Competitive forces emanate from industry rivalry, bargaining power of suppliers and buyers, threat of substitutes and threat of new entrants. Despite their existence, the company has been able to come up with approaches to help neutralize their effect. There are a lot of strategies that the organization can adopt to help in enhancing competitiveness. The defensive marketing warfare strategy is the best for this organization. This is based on the company’s position in the industry and the resources that it has at its disposal.
Emirates Telecommunication Corporation is an organization that was founded in 1976. It came along as a joint stock company between a British Company, International Aeradio Limited and local partners. The company’s structure changed in 1983. The government of UAE came to own 60% of the company’s shares while 40% was traded to the public. In 1991, the company was given the mandate to provide telecommunication wireless and wired services. This was to be done within the country and on the international scene. The aspect gave the firm the right to issue licenses of owning, manufacturing, importing and operating telecommunication equipments. In short, the company had both control and regulatory powers (Gentzoglanis, & Henten, 2010). Under these aspects, the organization was a complete monopoly. However, as time went by, the government saw the need of enhancing economic development in the country. One way of attaining this objective was by making the telecommunication industry an open one. A new law was enacted, which developed a provision for other firms to be developed so as to enhance competition. Competition would come along with quality services and products to the consumers.
Currently, Emirates Telecommunication is operating in 18 countries across Middle East, Africa and Asia. It is recognized as the 15th largest telecommunication operator all over the world. The company boosts of more than 140 million customers in its regions of operation. It provides its services to businesses, consumers, international telecommunication companies, content providers, internet service providers and mobile operators. Besides telecommunication, the company also provides a variety of hi-tech complimentary services. These services that are provided to the telecommunication industry include SIM card manufacturing, technical and managerial training, data and voice transit, land cable services and clearing house services among others. All the above activities are enabled by the company’s vast resources and good understanding of the industry of operation.
Source of the chart: Gentzoglanis, A., & Henten, A. (2010). Regulation and the evolution of the global telecommunications industry. Cheltenham, UK: Edward Elgar.
The Company’s vision is devised on the basis that reaching the people wherever they are should not be hindered by distances. There are several things that can be done to help actualize this desire. This is both for the local and international markets. This vision forms the basis for the organization’s mission. The Emirates telecommunication mission is to extend people’s reach (Gentzoglanis, & Henten, 2010). This will be achieved by creating advanced networks that will enhance openness and enablement. Openness comes in terms of the market that the company desires to venture and enablement is all about the ability of serving people in these economies.
Currently, the organization is working on a variety of goals. Among the goals that are being given a high priority is expansion of additional international markets. The company is already operating in 18 countries but desires to operate in more countries as time passes by. This attempt is being created by the desire to make more profits. Venturing into new markets comes along with creation of new market niches. This leads to increment in the total world market share in the telecommunication industry. As a result of increased consumers, the revenues will tend to increase too. Having such prospects makes the company have the ability of remaining operative for a long time. It will also help the company in its segmentation process. Different countries usually have different systems of operations. Tastes and preferences of consumers also tend to different from one economy to the other. Operating in different countries will help in developing numerous products and services, and concentrating them in markets that they are performing best. This aspect will also result to revenue increment for Emirates Telecommunication Corporation.
Another goal that the organization is working on is being the leader in terms of innovation and technology advancement. The telecommunication industry is very dynamic and keeps changing from time to time. For companies to thrive in this industry, they need to be very innovative and flexible. Being rigid might lead to obsolescence, which might result to reduction of consumers in the long-run. If Emirates Telecommunication Corporation established itself as a leader in this filed, it means that it will always remain to be a leader in this industry. It will be difficult for competitors to dig in its market share. This is because the only way to retain consumers is by giving them what they want. To them it comes as an aspect of social responsibility hence develops loyalty towards the organization and its services.
Strategies Being Used
The company has devised several strategies to help it remain operational for as long as possible. There is execution of both operational and marketing strategies. For the marketing aspect, the organization has developed the PORTER’S generic strategy. There are three strategies involved here, which include differentiation strategy, focus strategy and the cost leadership strategy. Cost leadership strategy is aimed at creating a competitive advantage by providing lower costs. Here, the organization aims at reducing its operational costs adequately. This is done by reducing unnecessary expenses and maximizing on the available resources. When the overall costs are reduced, pricing aspects that will enable break even are enhanced (Gentzoglanis, & Henten, 2010). It becomes easier to offer products and services at lower costs and still make substantial profits. Differentiation on the other hand is desired to make products or certain services being offered by the organization to appear unique compared to others in the market. It gives the company an opportunity to desensitize prices hence focus on value creation. This usually targets the high end consumers. Focus strategy on its side has been generated to take care of the different markets that organization is operating in. These markets are different in terms of infrastructure, economic ability and preference. As a result, different marketing techniques should be used or efficiency purposes.
The operational aspect on the other hand targets at offering consumers a variety of services. These include the telecommunication and other high technology complimentary services. The high tech services include SIM card manufacturing, training programs, payment solutions, voice and data transit and clearing house services. Not many companies in the industry have the ability of providing all these services. The aspect creates a limitation on what they can offer to consumers. As a result, it becomes difficult to absorb consumers from Emirates Telecommunication Corporation through various offerings. Even if new entrants offering favorable services on giving area, it becomes difficult for the consumer to shift due to lack of variety. Moving would result in creation of a void, and this would result in dissatisfaction in the long-run. This is a strategy that the company is currently using as a measure of locking its existing consumers. It would be ineffective if the organization lost some of its customers as it tries to hunt for others.
The SWOT analysis of the Emirates Telecommunication Corporation entails the strengths, opportunities, weaknesses and threats. To begin with is the company’s strength. Among the strength that the organization enjoys is the leading market position. The company is the largest telecommunication services provider in UAE. This success has been realized due to the company’s involvement with the industry for a long time. It was the first to be established hence it has obtained a favorable market share. Its brand is recognized all over the country hence giving it a competitive advantage. Consumers have been able to develop loyalty towards the company over the years. Being in operation for a long time has also enabled the company to get a clear understanding of the industry’s operations. This will be vital in making future decisions and devising strategies (Gentzoglanis, & Henten, 2010). Lack of good understanding usually results to formation of strategies that lead to deterioration of operations.
Weaknesses on the other hand come about as a result of impairment in several markets that it operates in. The market that seems to be affected the most is the Indian market. Impairment is being caused by new entrant and existing competitors in the industry. Regulations being devised are also contributing significantly to this occurrence. Some of them are creating a hostile environment hence polarizing the operations. Another weakness is emanating from a decline in profitability indicators in some markets. India is also included in this array. These profitability indicators include return on equity, effective tax rate, return on capital employed and return on assets.
Opportunities on the other hand lie on the fact that there is increased demand for broadband and mobile services. The increase in demand has been attributed by several factors. Among these factors is increase in population and economic development of various markets. As the economy of any country develops, usage of technology increases. The telecommunication industry is very hi-tech in its aspects. As a result, development will lead to increased emphasis on telecommunication acceptance. Increased population on the other hand increases the number of consumers available in the market. The more the consumers, the higher the chance of obtaining a greater market share. Emirates Telecommunication Corporation brand recognition will play a significant role in capturing the new consumers (Plunkett, 2011). Another opportunity is that penetrating into new markets has become easier. Initially, there were lots of barriers. These barriers were created by local governments and existing players in the market. Participants in any market develop barriers so as to deter new entrants into the market. Growing M2M market also acts as a source of opportunity for future operations. This form of technology allows both wireless and wired systems to commence communications with other devices of similar ability.
Despite the opportunities available, there also exist some threats to the organization. Among the threats is increased competition in the industry. Competition to Emirates Telecommunication Corporation comes from both the new entrants and existing industry players. Competitors are rising their strategies so as to cope with the pace being established by the company. The main the competitor in UAE is Emirates Integrated Telecommunication. Maintaining the market leadership position by the company might be in danger if the organization makes any erroneous or strategic mistakes. They competitors will move in to take advantage if any loophole is realized. Existence of stringent regulations is also a threat to the company’s operations. Some of the markets are putting up high standards in this industry. The aspect is increasing operational costs. The costs must be catered for by the pricing strategy and hence might ruin the company’s strategy of cost leadership.
Competitive Forces in the Industry
The competitive forces in the telecommunication industry of UAE include industry rivalry, bargaining power of suppliers and buyers, threat of substitutes and threat of new entrants.
The nature of rivalry that exists in this industry is a competitive one. Intense competition has been brought about by the fact the products and services being offered are of the same nature. This has made differentiation difficult under different perspectives. Companies in the industry are using various techniques to gain competitive advantage. Among the key strategy by most operators is critical analysis of the competitors. Under this scope, companies are analyzing what their competitors are doing all the time. This is of paramount importance since everyone wants to be ahead of the others. The ideology has gone to the extent of the competitors planting their own spies in other organizations. The ultimate objective is obtaining first hand information before strategies are executed in the other industries (Gentzoglanis, & Henten, 2010). Enhancing innovation aspects has also been viewed as an effective way of beating competition. Emirates Telecommunication Corporation has included this among its top priority goals. The idea behind this competitive strategy is that the telecommunication industry is dynamic. Consumer’s tastes and preference keep on changing now and then. Embracing innovation aspects could be the only way towards satisfying this need hence being ahead of the competitors.
In recent years, the company has been forced to engage in aggressive promotional activities. A lot of money is being spent on advertisements. The more people tend to see something, the more it tends to capture their attention and curiosity. Failure to engage in aggressive advertising campaigns would work to the advantage of competitors in such an industry.
Threat of New Entrants
There are various projections regarding the new entrant in the telecommunication industry of UAE. Plunkett (2011) asserts that the number of companies in this industry will have increased substantially by the end of 2015. This will be attributed by the fact that the market is very profitable and firms that are operating are gaining massive profits. New entrants will reduce profits being derived by each firm. This does not come as good news to the incumbents. Abnormal profits being realized currently might head towards zero. To this effect, Emirates Telecommunication Corporation has colluded with other companies in the industry so as to develop market entry barriers. Among the strategies is spearheading for policies that will make acquisition of patents and rights a difficult and lengthy process. Several policies have been devised in the process to this effect. However, existence of entry barriers is also a threat in itself to the existing companies. This is because when the entry barriers are high, the exit barriers are also low. New entrants that are able to position themselves can easily displace existing companies based on this approach.
In light of this threat, the company is also trying to enhance customer loyalty. Loyalty is the ultimate aspect that is difficult for new entrant to break. The company is enhancing this through its offerings. It has included a variety of offerings in its service and product base. New companies will not be able to offer such a variety once they commence operations. This is due to the high capital investment requirement and lack of market experience. With such an approach, there is nothing to worry about the new entrants for Emirates Telecommunication Corporation.
Threat of Substitutes
The threat of substitute is very high in this industry. This is because other companies involved are providing similar services like Emirates Telecommunication Corporation. This includes offering internet and mobile services. Others are also offering the training program that existed in this company only some time ago. When it comes to the clearing, this is the point where not many companies have been able to venture.
However, the company is still finding ways of dealing with this aspect. It is devising the strategy of cost leadership hence surpassing its competitors in brand recognition. When it comes to substitutes, consumers are more intrigued by the cheapest service in the industry. This comes in if other aspects seem to be closely related. The services being offered by Emirates Telecommunication Corporation are also of high quality. Their involvement with the industry for long time has enabled them to perfect their operations. This is because they tend to understand what consumers want with ease. As a result, the quality of substitute is not a threat to the company (Plunkett, 2011).
Bargaining Power of Consumers
In such a competitive industry, the bargaining power of consumers is usually high. They tend to put immense pressure on the companies in many ways. Among the ways that they achieve this is by requesting for high quality services and products. Demanding for favorable pricing is another avenue that they use to mount pressure. They are usually sensitive to any slight price changes.
Emirates Telecommunication Corporation has come with ways that will enable the company thrive in light of this occurrence. Among them is providing the buyers with relevant information regarding the operations being undertaken. This has been an effective tool since they are aware of what to expect in the market. This is on the prices and quality that is going to be served. Mechanisms devised by the company for enhancing quality have also been effective in dealing with the issue. When consumers are loyal to any firm, they are usually not concerned with some attributes so long as they get what they are used to.
Supplier’s Bargaining Power
The barging power of supplier is also relevant given that there are requirement of raw materials for certain components to be installed. Emirates Telecommunication Corporation has established favorable relationships with its suppliers to avoid any inconveniences. This is based on the grounds that these suppliers are also involved with the competitors. Offering them poor treatment might solidify their relationships with the competitors. At some point they might jeopardize company’s operations by providing low quality raw materials (Plunkett, 2011). They might also result to supplying materials very late hence delaying crucial operations. For this reasons, the company ensures that it pays them on time and offers them favorable prices. These are good ways of enhancing positive relationships.
There are a lot of strategies that the organization can adopt to help in enhancing competitiveness. These strategies are based on its position in the industry and the resources that it has at its disposal. The defensive marketing warfare strategy is the best for this organization. Defensive warfare would be effective since Emirates Telecommunication is the industry leader in UAE. The organization also has all the relevant resources to execute the strategy. These resources range from technology, manpower and capital among others.
Among the features adopted in this strategy is countering attacks from competitors with greater or equal force. This means that the organization needs to keep a close look at what the competitors are doing at all times. Being a market leader means that the organization has sufficient resources counter attack. Once competitors launch new products or services, there will be the need for the organization to do so. The services devised should be better compared to the ones being offered by the competitors. Focus should be on the weaknesses created while these products and services were being developed. Emirates Telecommunication Corporation should make the necessary adjustments hence come up with something even better (Montana & Charnov, 2008). This should not be a problem since the organization has an enable and adequate manpower coupled with sufficient capital.
Another facet of this strategy is defending all the primary markets. The mobile defense approach should be used in such a situation. It involves shifting of resource from time to time. The approach also allows for development of new tactics and strategies. When the strategies are changing now and then, it becomes difficult for competitors to read your next move. This means that the attacks that are aimed at capturing your market share will be futile. The ideology of the company acting as a defender equips it with flexible response mechanisms once an attack occurs. There would also be the need of scanning for potential attackers. Learning of their strengths would be of paramount importance. A consideration of what its allies would offer should also be of concern. This is because there might be a collusion of more than one competitor in executing the attack.
This strategy also stipulates that the best defensive mechanism would entail the company attacking itself. This does not mean attacking the operations of the organization on a literal sense. It is the ideology of attacking all the weak spots and rebuilding them in a better way. Here, there will be introduction of new products and services in the company’s mix. This way, it becomes difficult for competitors to come up with strategies that might beat the organization since it has exploited all the possibilities. It is better when you take a business from yourself compared to when the competitors take it away from you (Montana & Charnov, 2008). By doing this, the organization will be sacrificing short-term profits and elongating on long-term profits. The mechanism is also very effective in protecting the market share that already exists.
The defensive warfare strategy brings more profits to the firm because it protects it existing market share as it tries to capture more. Customer retention is vital for future existence and operation. It uses consumers as a shield in many of the battles emanating from rivalry. However, the strategy requires trust and commitment from all the stakeholders involved.
Gentzoglanis, A., & Henten, A. (2010). Regulation and the evolution of the global telecommunications industry. Cheltenham, UK: Edward Elgar.
Montana, P. J., & Charnov, B. H. (2008). Management (4th ed.). Hauppauge, NY: Barron’s Educational Series.
Plunkett, J. W. (2011). Plunkett’s telecommunications industry almanac. Houston, Tex.: Plunkett Research.
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