Case Study: Strategic Group Map

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Recommended: Consequences of increased competition on basic existing telecom services

Telecommunication Industry Strategic Group Map Introduction The telecommunication industry is one of the largest industries in the world with a wide range of players. The competitive nature of this telecommunication industry makes it perfect for analysis. This investigation explores the performance of the top ten industrial players within the industry. A strategic group map is developed to compare these firms’ profitability against the market value of each firm for fiscal year 2015. Strategic Group Map Fig. 1: Strategic Group Map for the Telecommunication Industry (Source: China Daily, 2015) Evidence from the strategic group map in figure 1 above indicates that the competition is stiff. A number of small companies in terms of market value are outperforming those with larger market values. For instance, Vodafone has a market value of $ 88 billion and an annual profit of $ 7.74 billion (China Daily, 2015). In contrast, AT&T has twice the value of Vodafone at a market value of $ 173 billion and an annual profit of $ 6.2 billion (China Daily, 2015). A similar incident is evident between Deutsche Telekom with a market value of $ 85 billion and …show more content…

China Mobile is located in China while Verizon Communications and AT&T are located in the United States, which are regions with a high population. The general income levels for residents in these countries are significantly high. Consequently, the buyers have immense buying power. China has a host of other major players like China telecom that provides a stiff challenge to China Mobile. Similarly, Verizon Communications is located in the same region as AT&T (Rajasekar & Al Raee, 2013). Subsequently, buyers have the power to determine the telecommunication service provider to adopt. Major industrial players are aware of the buyer’s bargaining power, and they do everything possible to lower their prices and improve the quality of their

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