The mobile telecommunications industry in Ireland has always been a competitive and rapidly changing industry. It has changed considerably from it’s initial birth with only one competitor, to it’s liberalisation in 1998, all the way through to the introduction of MVNO’s in the 2000’s. Mobile penetration has increased from 42 % in 2000 (Telecommunications and Internet Federation, 2005) to almost 97% of Irish adults owning a mobile phone now in 2013. (Irishexaminer.com, 2013) In order to fully understand the rapid development of this industry and the future of it, we must first look at its history in 1998. The Telecommunications Industry in Ireland in 1998 was a duopoly, meaning that there were only two service providers in the market. These were Eircell, which is better known today as Vodafone, and Esat Digifone, known today as O2. The industry therefore was small and had very limited competition. The industry was only in it’s initial early stages. Michael Porter created the five Forces Framework in order to analyse industry competitiveness and attractiveness.(Porter,1997, pp.137-145) The varying degrees of strength or weakness of these five forces determine whether an industry can make high returns, thus determining whether it is an attractive industry or not. The more powerful each of these five forces is, the less profitable an industry will be. These five forces, the threat of new entry, power of buyers, power of suppliers, the threat of substitution and the intensity of rivalry should be examined in relation to the telecommunications industry in 1998 in order to assess its attractiveness. The first force is the threat of new entry. In the telecommunications industry before December 1998, the threat of new entry was very lo... ... middle of paper ... .... 2006. Meteor-ic Rise: How a Carefully Executed Advertising Strategy can Grow a Brand’s Market Share in Under a Year. [online] Available at: http://www.adfx.ie/cases/cases06/meteor.pdf [Accessed: 29th Nov 2013]. Ibec.ie. 2011. Telecoms industry discuss future mobile trends | Ibec - Newsroom. [online] Available at: http://www.ibec.ie/ibec/press/presspublicationsdoclib3.nsf/wvSectorNews/63D99994F6B244E9802578B90053DDA5 [Accessed: 31st Nov 2013]. heanet.ie. 2013. The next decade in Mobile Communications – An Irish Operators perspective. [online] Available at: http://www.heanet.ie/conferences/2011/files/46/Pat%20Moynihan%20-%20O2.pdf [Accessed: 29th Nov 2013] Irish Times. 2013. Three Ireland suffers outage as O2 sale agreed. [online] Available at: http://www.irishtimes.com/business/three-ireland-suffers-outage-as-o2-sale-agreed-1.1440839 [Accessed: 31st Nov 2013].
In 1990s, ground-based wireless phone service grew rapidly around the world. A key factor in the growth of wireless phones was the adoption of a single standard, known as GSM, in Europe and parts of Asia. There were 480 million cellular subscribers worldwide by January 2000 and it reached more than billions before 2005. The economy of scale that introduced will provide the extent of competitive pressure in the business environment. It helps to stimulate Iridium to consider price-performance tradeoff that offered by the substitutes and the need of product differentiation alternatives in advance.
As the largest telecommunication company in the United States, Verizon sells the superiority of its network as the number one competitive advantage. However, over the course of a decade the telecommunication industry changed and having the best network was simply not enough to stay relevant. Telecommunication is an expensive business. “The financial challenges of keeping up with rapid technological change and depreciation can be monumental” (Investopedia, 2015). The Porter’s 5 Force Analysis of the telecommunication industry revealed that the availability of substitutions are high. This drives increase competition in the industry. Furthermore, deregulation has helped to increase new entrants.
Consequently, the major responsibility of the strategist is to understand and cope with the competition. The five forces advanced by Porter include the bargaining power of buyers, the bargaining power of suppliers, threat of new entrants, threat of substitutes and the rivalry among existing competitors (Porter 80). In line with Porter 's five forces model, the structure of any particular industry develops from a set of economic and technical attributes that determine the strength of the various competitive forces. The shape of the five forces determines this premise since the five forces differ according to the industry in which business is operating. An example of how competition differs depending on the industry is evident from the comparison of fast foods restaurants and the Personal Computers (PCs) Industry. While in the fast foods industry customers might consider the convenience of the restaurants and location, in the PCs industry innovativeness is the key since customer seek product
A second barrier to entry is switching costs. When IBM and Apple were the only computer systems to choose from people had to make a choice. When you went to buy one system then you had to buy all the software that went along with that system. Ultimately, IBM became the mor...
The threat of new entrants into the industry can be a big, due to the greater number of competitors with equal or the same products and service can sway the power of the industry. New entrants are attracted by the profitability
Porter expresses how bargaining power of buyers in the five forces of competitive forces and explain that “the buyers compete with an industry by exerting a downward pressure on its prices, negotiating for higher and better quality service.” The company or organization plays off the competitor at the expense of an industry profitability. “Everything is based upon the market size situation according to Porter (P. 271).”
There has been an increasing demand of telecommunication services in the last few decades which has led to an all time high demand of global operations in businesses , their capital investment as well as mobilization of the resources. This has further resulted in a lot of changes in the lifestyle of the people within specific geographies that includes an increasing demand for the latest of technology as well.
In this following report I will discuss the phone industry and analysed it in great detail. I will analysis the market structure and try and understand why the mobile industry falls to heavily oligopoly structure. I will highlight all the structures, however I will discuss in detail how, for example Vodafone can be incorporated in the porter’s five forces method to show how the mobile industry has devolved over the years and to understand if consumers are driven by the actual technology of the phone but if it driven more by style.
In today’s society, smartphones have inevitably taken cellular phone sales by storm. Flip phones and home phones, with the classic 9 number keyboards, are being replaced with touch screens that allow for more interactive and advanced phones. The Apple iPhone and the Google Android are two examples of how technology is advancing the way we communicate. These smartphones, backed by each company’s unique business models, have changed the way cellular devices are used and sold.
Telecommunications gained mainstream attention in the early 90’s; however the initial key market was business men and women, who used their phones whilst being on the move and so allowing them to communicate with their companies with ease. Though in the modern era, telecommunication went through segmentation in the market trends, and now in this day and age it would be difficult to find someone who does not own some form of mobile technology. Many phone providers battle to provide the best service for their customers (Figure 1).
In a competitive environment where market is changing instantly, organizations are in a fix to design a strategy that could market their products enticing the consumers to buy their products and services. Market is the arena for business gladiators who fight out for maximum share and profitability and this is possible only through effective marketing strategy. Competing in present economy means finding ways to break out of commodity status to meet customers’ needs better than competing firms (Ferrell and Hartline, 2010). The intensity of competition has increased after the introduction of media and internet where the companies present their product in the best way through advertisements, product reviews, blog entries, etc. With the advancement in technological innovations, companies have found various ways of providing services to the consumers in a cheaper and effective way and this has resulted in communication revolution in late 1990’s as the cellular technology was unfold in most of the regions. Singtel Optus Pty Limited (Optus) is one such company that has evolved during this period as a leader in integrated communications and this paper is assumed to make an analysis of the company’s marketing strategy and its financial position in the market industry.
There is a slowdown in sales of mobile handsets, in some markets like the UK, as the mature part of the product lifecycle is reached. Customers are exposed to a barrage of different images and messages by mobile phone companies, as the competition gets tougher. Vodafone appeals to new customers and aims to keep its existing ones by emphasising the uniqueness of the brand.
In a fast-moving industry, it is important to find out what clients prefer today, but 3G must also research their future requirements. It must also frequently research new technologies in this way it will stay at the forefront of the field and retain market leadership. 3G is a developing technology and the greatest benefits are likely to come in the next couple of years.
"While practically everybody today is a potential mobile phone customer, everybody is simultaneously different in terms of usage, needs, lifestyles, and individual preferences," explains Nokia's Media Relations Manager, Keith Nowak. Understanding those differences requires that Nokia conduct ongoing research among different consumer groups throughout the world. The approach is reflected in the company's business strategy:
Porter’s five forces is a framework for analyzing an industry and business strategy development. It looks at forces that determine the competitive intensity of an industry and hence the overall attractiveness of that industry. The configuration of the five forces differs by industry. Understanding the competitive forces and their underlying causes reveals the roots of an industry’s current profitability while providing a framework for anticipating and influencing competition over time.