Critical Thinking: Industry Analysis To Prepare For This ✓ Solved

Critical Thinking: Industry Analysis To prepare for this

Review Figures 3.1, 3.2, 3.3, 3.5, and 3.6 from your textbook. Select a Saudi Arabian company, identify the industry in which it competes, and identify its three main competitors. Complete an Industry Analysis by answering the following questions.

  1. Analyze and predict industry profitability:

    • Apply a detailed Porter’s Five Forces framework with a graphic representation (Figure 3.3) and written explanation for your selected company in relation to the Five Forces.

    • Given the Five Forces analysis outcomes, predict the level of industry profitability expressed as high, intermediate, or low.

  2. Implications for strategy:

    • What strategies can the rival companies adopt to reduce competitive pressure and improve industry profitability?

    • Which strategies do you recommend for your company to improve its competitiveness, position, and earnings?

  3. Identifying Key Success Factors (KSFs)—What are the KSFs of your company?

    • Who are the customers and what do they want?

    • How does the company survive competition?

    • Has your company’s KSFs changed over time?

Your well-written paper should meet the following requirements:

  • Be 7 pages in length, which does not include the required title and reference pages.

  • APA style guidelines.

  • Support your submission with course material concepts, principles, and theories from the textbook and at least two scholarly, peer-reviewed journal articles unless the assignment calls for more.

  • Turnitin Originality Check.

Paper For Above Instructions

Choosing a company for industry analysis can aid in understanding competitive dynamics, market positioning, and overall strategic planning. For this paper, we will analyze the Saudi Arabian telecommunications company, STC (Saudi Telecom Company), which is one of the leading players in the telecommunications industry. The main competitors of STC include Mobily, Zain, and Virgin Mobile.

Industry Profitability Analysis

To analyze and predict industry profitability, we will apply Porter's Five Forces framework, which provides insights into the competitive landscape of the telecommunications industry in Saudi Arabia.

1. Porter's Five Forces Analysis

a. Threat of New Entrants:

The telecommunications industry has high entry barriers due to substantial capital investment requirements, regulatory hurdles, and established brand loyalty. Consequently, the threat of new entrants is low.

b. Bargaining Power of Suppliers:

Suppliers in the telecommunications sector, including equipment manufacturers and software suppliers, have moderate power. There are several suppliers available, but specific technological providers may possess higher bargaining power due to proprietary systems.

c. Bargaining Power of Buyers:

The bargaining power of buyers is high in the Saudi telecommunications market, as customers have multiple options to choose from. This encourages companies to improve service quality and pricing strategies.

d. Threat of Substitute Products:

The threat of substitutes is moderate. Customers might switch to alternative communication platforms (like VoIP services) or other forms of digital communication if prices increase excessively.

e. Industry Rivalry:

Rivalry in the industry is high, with three primary players (STC, Mobily, and Zain) battling for market share. Price wars, promotional activities, and service innovations significantly impact profitability in this sector.

Based on the analysis of these forces, the predicted level of industry profitability can be considered intermediate. While the established companies enjoy significant market shares, intense competition and high buyer power place pressures on margins.

Implications for Strategy

1. Strategies for Rival Companies: Rival companies can consider various strategies to reduce competitive pressure and enhance profitability:

  • Differentiation through enhanced customer service experiences and unique product offerings.
  • Cost leadership strategies such as optimizing operational efficiencies for lower pricing.
  • Strategic partnerships or mergers to gain a competitive edge and expand market reach.

2. Recommended Strategies for STC: To bolster its competitiveness, I recommend STC adopt the following strategies:

  • Invest in advanced network infrastructure to improve service quality and reliability.
  • Enhance digital offerings, such as mobile applications and online platforms, to cater to tech-savvy consumers.
  • Focus on marketing strategies that emphasize sustainability and social responsibility, appealing to modern consumers.

Identifying Key Success Factors

Key Success Factors (KSFs) are essential elements that contribute to a company's competitive edge in the telecommunications sector.

1. Customer Needs and Preferences

Who are the customers and what do they want? STC’s customers include individuals, businesses, and governmental organizations. They seek reliable telecommunications services, competitive pricing, and exceptional customer support.

2. Competitive Survival Strategies

How does the company survive competition? STC survives competition by emphasizing technological innovation, maintaining a broad customer base, and continually investing in service quality enhancements.

3. Evolution of KSFs

Have your company’s KSFs changed over time? Yes, STC's KSFs have evolved, particularly with the rise of digital services and increased customer expectations regarding online and mobile service accessibility.

In conclusion, the telecommunications industry in Saudi Arabia is characterized by high competition and significant buyer power. Companies must strategically position themselves to thrive amidst these challenges. As STC navigates this competitive landscape, focusing on innovation, customer satisfaction, and effective communication can ensure sustained profitability and growth in an increasingly digital world.

References

  • Porter, M. E. (2008). The Five Competitive Forces That Shape Strategy. Harvard Business Review.

  • Alghatani, A., & Ghaleb, F. (2020). Market Analysis of Telecommunications in Saudi Arabia. International Journal of Business Management.

  • STC Annual Report 2022. Saudi Telecom Company.

  • Mobily Investor Relations Reports. (2022). Mobily.

  • Zain Group Annual Report. (2022). Zain Group.

  • Johnston, E. (2019). Telecommunications In Saudi Arabia: A Comprehensive Overview. Journal of Telecommunication Policy.

  • Badr, K. A., & Hassan, H. (2021). Customer Satisfaction in Telecommunications. Journal of Business Research.

  • Smith, J. (2017). Key Success Factors in the Telecom Industry. Global Journal of Business Studies.

  • Al-Mamari, A. (2020). Strategies for Competitive Advantage in Saudi Telecom. Arab Journal of Marketing.

  • World Bank (2021). Saudi Arabia: Country Profile. World Bank Publications.

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