Literature Review
Entering an industry for a company in the international market is a complex process as various internal and external factors influence it decisions of the company. The Egyptian company selected for discussion in this report is Telecom Egypt which is involved in the operations of the Telecommunication industry (Martin, Chetty & Bai, 2022). Telecom Egypt was established in Cairo, Egypt and was engaged in conductivity data communications activities in 1881. This telecommunications company is owned by the government of Egypt and provides services related to data communication and telecommunication all over the country. When a company decides to enter International markets in the same industry, it faces various barriers that make its operations difficult in other countries (Faccio & Zingales, 2022). In this report, there will be a discussion about the challenges and issues faced by Telecom Egypt Company while entering the international markets in the telecommunication industry. The telecommunication industry worldwide works on the operation of Information and Communication Technology that help people to connect from every part of the world. Some of the significant services provided by the telecommunications industry worldwide are internet access to the people, broadband information services, good quality mobile networks, and digital subscriber lines. This report will discuss the issues that come in the way while entering the telecommunication industry concerning the Telecom Egypt Company in the international market (Pedrosa et al., 2022). As the consumer demand is increasing at a rapid rate, all the industries worldwide are expanding their businesses to other countries to generate more revenue and to increase their customer base. This report will further examine and analyse the decisions made by Telecom Egypt Company to solve the issues of barriers that are created while entering the international market. It will demonstrate the possible challenges arising from other established companies in the same industry in other countries in the world.
International marketing is a concept that involves the process of multinational companies that are deciding to establish their business operations in other parts of the world (Elsafty & Elzeftawy, 2021). The activities involved in international marketing are licensing, franchising, joint ventures with other companies, and foreign direct investment. The main motive behind international marketing and expanding into other countries is to satisfy the customers’ needs globally (Cateora et al., 2014). Moreover, international marketing aims to expand business activities worldwide and generate more revenue from the production services provided to the customer. To meet the customers’ expectations globally, the company that is expanding operations in other countries needs to make decisions according to customers’ demand. Accordingly their behaviour in the market must vary as per the need of an hour (Khamis & Ismail, 2022). While making decisions to enter the international market, the company faces a lot of barriers and challenges that need to be solved by the top management of the company. The challenges faced by Telecom Egypt Company while entering the international market require a good level of business strategies suitable for global conditions (Dolzer & Kriebaum, 2022). One of the major challenges faced by Telecom Egypt Company is the complex operations process required while entering the international telecommunications industry. The operational process includes various kinds of formalities that need to be completed by the company to follow all the rules and procedures for expanding the business into other countries (Elsafty & Elzeftawy, 2022). Moreover, handling the Complex operations of entering into international markets require many resources and funds (Cateora et al., 2014). It is being observed that while entering the telecommunication industry, various kinds of service configuration activities are conducted to serve customers worldwide. The complex operation process conducted by Telecom Egypt Company also needs to be completed in the designated period to avoid any delay in providing the services to the customers (Igwe, Rugara & Rahman, 2021).
Challenges Faced by Telecom Egypt Company
While availing the services of a company in the Telecom industry, the customer is unable to wait patiently, and because of that, conflicts arise among them (Oliva et al., 2022). So the challenge of the complex operation process faced by Telecom Egypt Company creates a barrier to conducting activities in the international markets. Another important challenge that Telecom Egypt Company faces is the leverage enjoyed by the already established companies of the same nature. The country where an international company plans to enter the telecommunication industry will be a leading player in that region (Hina et al., 2022). So it becomes a major challenge for Telecom Egypt Company to compete with those established Telecom companies in the country where international marketing is being conducted. A theory of international marketing is suitable for explaining the condition of Telecom Egypt Company in international marketing. The international marketing theory aligned here is the International product life cycle theory. This international marketing theory involves three significant stages for the company’s production services offered in the international market (Iveson, Hultman & Davvetas, 2022). The stages include introducing, maturity, and declining stages of the product and services. There is a major challenge of facing a high level of competition from an established company in the international market where the international product life cycle theory suits the most. Under this theory, for remaining in the competition, the company introduces new products in the industry to attract the customer base and expand the business operations (Tsalis, Stefanakis & Nikolaou, 2022). In this theory, the first stage provides the rising stage of the business in the international market. The second stage demonstrates when the company established its operations in the country and reached the majority stage. When the products or services of the company reach the majority stage, it starts declining and fails to satisfy the customer’s need after some time during all the international product life cycle stages (Cateora et al., 2014). Moreover, to remain in the industry and to make profit, it is important for Telecom Egypt to consistently innovate and introduce new kinds of products in the telecommunication industry of that country. There is one more challenge faced by Telecom Egypt while entering the international markets of the Telecommunication industry (Faccio & Zingales, 2022). There is a challenge in keeping up with the technology in that country where Telecom Egypt plans to expand its business operations and provide services to that country’s customers. As it is seen that when compared the developed countries in the world, it can use the most advanced technology in the telecommunication services. Whereas the developing or the underdeveloped countries are still finding different methods for improving the quality of their communication network (Keegan & Green, 2010). Telecom Egypt faces the challenge of technology because it has to meet the customers’ expectations of that country by providing them with high-speed internet and a good quality communication network without any interruptions (Pedrosa et al., 2022). The technology challenge is responsible for creating a barrier to making strategic changes in a company’s technology. It requires a large number of funds and a highly skilled workforce. For this purpose and to resolve this challenge, Telecom Egypt is increasing its expenditure on the research and development sector of the company to meet the expectations of the people in the international markets (Felix & Alagah, 2021). For example, as Telecom Egypt is planning to expand its operations in the international market of the telecommunication industry, it has to innovate and introduce some new technological advancement to improve the quality of communication networks in the world. The issue of technology slows down the performance in growth of the company (Kalem et al., 2021). While entering the international markets, the company can make huge profits from its business operations, but they also face challenges and issues. Some more notable challenges are faced by Telecom Egypt Company in the international markets like the physical distance between the countries that is entering the telecommunications industry of the international market. Along with this the other country where the expansion is happening increases the cost of the process can also be deemed as the challenge. Due to the greater physical distance in the expansion process of international markets, there is an increase in the cost of logistics and shipping of the products and services offered in the market (Pereira et al., 2022). Moreover, the challenge of physical distance while entering the international markets creates barriers in the communication network responsible for conducting business operations in other countries. The communication problem occurs with the company’s officials that influence the performance and process of expansion to enter the international markets. This term is also known as organizational communication; it strongly impacts the smooth functioning of the operations in the international market as a barrier in the process (Younis & Elbanna, 2022). To solve this issue, an effective communication network needs to be framed in Telecom Egypt by the leadership so that the company can successfully enter international markets.
Factors Involved In The Expansion Process
During the process of entering into the international markets, the company selected for the practical discussion can provide various kinds of Strategies and policies implemented in the process. Telecom Egypt, which is conducting the activities of entering into the Telecom industry’s international market, also faces various significant challenges that need to be resolved by top management, including a highly-skilled workforce (Li & Xiong, 2022). One of the most difficult challenges that Telecom Egypt faces is the unfamiliar cultures in the other countries where the expansion of business operations with being conducted. While entering the international markets, it is the responsibility of the company to expand its business operations according to the culture of the other countries. It is also ensured by the country to not hurt the sentiments and values of the citizens of that particular country where business expansion is being conducted (Stallkamp & Schotter, 2021). For example, Telecom Egypt currently conducts business operations majorly according to the majority population of Egypt, which is Muslims. So while entering other countries, it is a difficult task for Telecom Egypt to transform with business activities according to the culture of other countries. For instance Telecom Egypt is entering into the international markets of the telecommunication industry of the United States of America then it has to work according to the Christianity ethnicity of the citizens of that country. While facing the technology issue by Telecom Egypt Company in the international markets, it is difficult for the company to adopt the most advanced technology with the available resources (Wiley, 2022). For example, Telecom Egypt Company entering into the international markets has to build fast speed servers in other countries to adopt the technology of 5G services. Providing the highest possible speed of data and communication network to the citizens of that country it is important to increase the customer base and compete with other established companies (Musonera, 2019).
The above part of the discussion also mentions the challenge of establishing the company in other countries and giving competition to the already established telecom companies in that region. For example, Telecom Egypt is planning to expand its business operation through the international markets in China then it needs to build Strategies and policies to give competition to already established telecom companies such as China Telecom and China Unicorn (Felix & Alagah, 2021). The established companies like China Telecom and China Unicorn have the majority of the customer base in China, making it difficult for Telecom Egypt to conduct its business operations and increase its customer base (Xia, 2022). Another very important challenge that comes as a barrier is the complex operation process to be handled by Telecom Egypt well entering the international market (Katz & Emara, 2022). For example, to enter the international market in the telecommunication industry, there are various types of documents to be completed by Telecom Egypt and follow proper international marketing policies and procedures (Cui, Guo & Zhao, 2022). The operational process is different for every country’s entry into International markets, and the documentation process Involves various clause that is to be completed by Telecom Egypt company. Another challenge faced by Telecom Egypt Company that must be taken into consideration is the tariffs and taxes imposed on the company planning to enter the international markets. For example, suppose the telecom Egypt Company plans to enter any European country in that case, it has to pay the fees of tariff and documentation along with taxes to the particular government of the respective country (Katz & Emara, 2022). Most of the countries in the world charge some tariffs on the company entering their country’s telecommunication industry to protect the interests of the local companies operating in that country.
Hence, Telecom Egypt Company should be ready to bear some expense of the tariffs fees that are mandatory to pay to the government of that country for entering into the markets of the telecommunication industry (Felix & Alagah, 2021). The fees amount of tariffs charged on that country which is entering the international market. However, the same depends majorly on the cost of shipping and logistics used for expanding a company’s business operations (Khamis & Ismail, 2022). To expand the business operations of Telecom Egypt Company, it should choose the right country to establish its business in the telecommunication industry after analysing all the factors mentioned above. For telecom Egypt, the right country is on a good ranking of ease of doing business to avoid any interruption from the government. Moreover, there is also a major challenge in business marketing that is being entered into the international markets of a particular industry. In the case of Telecom Egypt, which belongs to the telecommunication industry, it is important to adopt adequate marketing and promotion strategies in the international market to attract customers to the services offered to them (Allam & Olmsted, 2021). As mentioned earlier, the culture and values of each country are different, and according to these cultural values, telecom Egypt has to frame the marketing strategies according to the consumer’s behaviour in that country. For example, Telecom Egypt plans to enter a developed country like Sweden in that case, it has to adopt marketing strategies that meet the people’s expectations in that country. As Sweden is considered one of the happiest countries in the world, then telecom Egypt has to ensure this attribute of the citizens of Sweden while framing the policies and strategies for marketing telecommunication services in the international markets (Gaber, Elsamadicy & Wright, 2021).
Lastly, the challenge that is also important to consider while discussing the expansion of business in the international markets is the management of the human resource in the organization. As telecom Egypt is going global and expanding its business operations in other parts of the world, it has to think about managing the human resources to ensure the effectiveness and productivity of the business activities in the international markets. For example, Telecom Egypt plans to expand its business operations in an underdeveloped country, such as any country in Africa (Alugbuo & Eze, 2021). In that case, it has to recruit a highly skilled workforce capable of running a business effectively. For this purpose, Telecom Egypt has to properly plan the policies and procedures that should be adopted to meet the requirements of human resources required in the telecommunication industry (Keegan & Green, 2010). Moreover, telecom Egypt should conduct some effective training sessions for the workforce in the telecommunication industry using advanced technology to reduce the cost of services offered to the customers. So the topic of expansion of business operations of telecom Egypt in the international markets includes some significant challenges that need to be resolved as a priority in the company (Felix & Alagah, 2021). It is seen that while entering into the international markets, every country has its own rules and procedures according to which the top management of the company frames these strategies. To avoid any conflict with the respective government of that country, telecom Egypt should prepare all the legal formalities in advance for the smooth process that is being conducted to enter into the international markets of the telecommunication industry.
Conclusion
Therefore, it is concluded that various factors influence the company’s decisions. This discussion provides a clear understanding of the challenges faced by Telecom Egypt while entering the international markets in the telecommunication industries. The company’s challenges are complex operational process, leverage over the top players of that country, Technology advancements in providing the services, and the unfamiliar culture of other countries in the international markets. It is also observed that when a company decides to expand business operations in other countries, there are various kinds of barriers to establishing its presence in that country. Moreover, there are complex documentation processes required before entering the international market to register the information and all the company’s details. One more challenge faced by the Telecom Egypt Company while entering the international market is the physical distance that creates a barrier to the communication for the company officials. Some real-life examples provide the telecommunication industry of other countries and the kinds of barriers that Telecom Egypt faces in that country. The process of entering the international markets in the telecommunications industry requires a huge amount of funds and various strategic decisions to be made by the company’s top management. It is also observed that the international product life cycle theory is aligned with some parts of the discussion. This includes three stages: the introductory stage, the majority stage, and the declining stage of the production services offered in the market. While entering into the international markets of the telecommunication industry, it is seen that there is difficult competition given by the already established telecommunication companies in the countries. Telecom Egypt is entering into the telecommunication industry of China, is facing competition from China Telecom and China Unicorn. These two companies mentioned above are already established telecommunications companies in China, and Egypt needs to frame these strategies to compete with these two companies. Hence the competitors in the international markets play a significant role in in the expansion process of a company and influencing the business decisions.
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