Situational Analysis
The idea of strategic management can be addressed as one of the integral concepts that allow in the continuous planning, monitoring, analysis and assessment of every aspect that is essential for an organisation to meet its overall aims and objectives (Wheelen et al., 2017). The purpose of this assessment is to ensure that proper analysis has been conducted on the industry that the organisation Ooredo Oman operates in. The report provided below intends to cover the initial aspects of strategic management that allows an organisation to function effectively. Ooredo Oman is mainly a telecommunications service provider who is prominently known for providing Muscat’s finest communication services and offers great value and substantial amount of service and excellent quality that generates them adequate amount of customer satisfaction. The report conducted below would completely focus on the importance of conducting a situational analysis and the kind of business or generic strategies that would be considered by the company.
The external analysis can also be considered as the macro-environmental factors comprising of some of the important aspects that has the tendency to impact the functioning of an organisations. These external factors comprise of various kinds of attributes and have substantial amount of association with the legislative structure of an organisation allowing them to influence the decision-making process of an organisation (Chai, 2017). The macro-environmental factors comprise of political, economic, social, technological, legal and environmental. The table provided below generates a better insight of the environment that the company is operating in.
|
Macro-Environmental Factors |
Analysis |
|
Political |
The company enjoys substantial amount of political support and financial patronage from the government but the political uncertainty of the country continues to pose threat for the country in terms of multiple situations (Halpern, 2015). |
|
Economic |
The economic situation of Oman has not been considered favourable mainly due to the fact that there has been a decrease in the oil price that is affecting the GDP of the country. Since, most of the major businesses are of oil so there is a chance that factors such as the disposable income, inflation, recession, economic growth might be impacted and Ooredo might not be able to gain enough customers. |
|
Social |
There has been a substantial amount of increase in the existence of expatriate population that has decreased the efficiency of the organisation (Meriwether, 2018). However, understanding the telecommunication needs of the population would allow the company to function better. |
|
Technology |
The substantial amount of cloud and IoT services have opened up various opportunities for the people and the company. The company ensures that they are able to invest an adequate sum of money for their research and development. The company has also initiated the idea of undersea cable thus maintaining their technological innovation. |
|
Legal |
The fundamental regulatory changes would allow in affecting the functioning of the company. The frequent changes make it difficult for the company to cope up with the obstacles of their regulations and the legislative structures. Also, the protection of the intellectual property of the company cannot be assured as well. |
|
Environmental |
The company understands the importance of environment and ensures that he has generated substantial amount of information to focus on innovative energy to mitigate the impact of the environmental impact and their interests on smart technologies also allows them to gain some of the environmental benefits (Held, 2018). |
Table 1: PESTLE analysis of Ooredo Oman
(Source: Created by the learner)
Conducting an internal analysis is considered as an important aspect of a strategy that allows an organisation to gain substantial amount of information on the understanding of the internal capabilities of an organisation (Rothaermel, 2015). The SWOT analysis provided below would allow having a substantial amount of idea regarding the capability of the organisation:
Strengths
- The company has a strong brand value and tends to perform better with a strong liquidity profile as well. The company has encountered substantial amount of growth in the past six years and makes sure that they have managed to perform effectively in their 12 international markets (Samuel and Sarprasatha, 2016)
- The company is the market leader in Qatar and in Oman as welland they provide best offerings compared to their regional and global competitors. The company continues to work on the revenue models that comprise of mobility offerings, broadband solutions, digital ecosystems and fibre technologies
- The company has a strong presence in two of the most prominent cities in the world such as Indonesia and Myanmar. The company encountered a growth in their subscribers by 80.5 million in combination (Samuel, 2017)
Weaknesses
- The company has a long overdue debt after the issuance of the bonds, implying that the company might not be able to function properly in the markets effectively, until they have solved this discrepancy
- The political instances of majority of the countries they are operating tend to create havoc to develop control over a Middle-East based country. They also have a tendency to impact the business functioning of the organisation
Opportunities
- The launch of the 4K TV poses as a great opportunity for the company to initiate tis business services in some other segment. This particular service provided by the company comes with no particular upfront or device fees and provides them with unlimited access to digital content. The company has substantial amount of scope for expanding this service and earn profit in the existing 12 cities they are operating in
- The association with the major sporting events also allows the company to gain substantial amount of the popularity and encourage their performance as a global entity. The FIFA world cup that is to be held in the year of 2022 poses as a major opportunity for the company to continue increase their customer base (Tobal, 2014)
- The telecommunications industry has the tendency to deal with challenges every now and then to initiate the incorporation of new technology, thus, implying that there is always going to be a persistent demand for capital investment. The company can attract decent amount of good venture capital for their growth and development
Threats
- The business environment is very challenging and the unstable political situation of some of the major markets of the company poses as a great threat for their business operations. Some of the markets comprise of names such as Iraq, Tunisia and Palestine
- Terrorist attacks in Europe and the political instability in the Middle East region has prompted the company to be acquainted with the geo-political risks that has a tendency to dampen the investment chances
- The company’s success completely depends on the economy of Qatar and Oman, which in turn is entirely dependent on the oil prices that has been considered quite volatile in the recent scenario
In the current scenario, it has been identified that the telecommunications industry has been subjected to numerous kinds of technological and environmental discrepancy. It is evident that the company would be likely to accustom something similar to that in the future as well. The current trends in the telecommunications industry comprise of the extensive amount of operations in terms of technological advancements that would permit the company to function better in the market. The current trends comprise of the connecting of IoT (Loo et al., 2016). The IoT has turned out to be an ecosystem of the electronic or the telecommunications industry. The use of cloud computing and carrier grade Wi-Fi also allows the companies to function effectively in the current industry.
It has also been identified that by the year 2021, the telecommunications industry would be accustomed to certain amount of changes that would allow them to function better and ensure their advancement in this particular industry (Bennett and James, 2017). Some of the important future trends that has been identified are as follows:
- Premium availability of content and cross industry alliances, mainly with the companies that produce entertainment content
- The telecom giants would be completely successful in launching 5G, which has the tendency to detach the network infrastructure, thus, welcoming new possibilities
- Machine learning and the extensive use of artificial intelligence would allow the telecoms to make sure that they are able to conduct back office operations and trivial customer interactions in a very convenient manner
- The idea of in-flight connectivity has garnered popularity among the telecom industry and it is also considered as a game changer for the airline companies. It is because the customers have shown credibility towards the use of smartphone when choosing an airline
The use of Porter’s five forces would allow in the better understanding of the nature of competition that exists in the telecom industry in Middle East. It was evident to gain an understanding of the impact of the international companies on their operations and also focused on their global expansion strategy, but it is also essential to understand the importance of the existing competitors in this particular market.
External Analysis
Threat of the New Entrants
The threat of the new entries in the Oman telecommunications industry has been considered low because of the fact that it is identified to be one of the most capital concentrated sector of the Middle East. Also, it is mandatory for the firms to generate licenses from the PTA, that is being considered extremely expensive and time-consuming, it can be said that it would be difficult for any new company to initiate a venture with substantial amount of capital (Coussement et al., 2017). There are also other prominent reasons for the threat of new competitors as there are extreme government restrictions, telecom licenses issues and high fixed costs as well.
Bargaining Power of the Suppliers
The bargaining power of the suppliers has been considered low because there is already an existence of intense competition between the firms and the foreign suppliers. The suppliers most of the time maintain a long term and flexible behaviour with their customers to make sure that they have the capacity to be their facilitator for a substantial amount of time. There is also a high availability of substitute inputs that do not permit the suppliers to make any kind of demands.
Bargaining Power of the buyers
The bargaining power of the buyers is relatively high in this situation because there is extensive amount of possibilities that the people would have the opportunity to switch to any other substitute product and make sure that they have adequate amount of options to choose from, especially in this segment.
Threat of the substitutes
The threat of the substitutes has been considered high in this situation because of the fact that the customers would be willing to make reliable changes in their options if they are not satisfied with the extent of operations provided by them (Mounier, 2017). They would be willing to switch to another product and ensure that the new product chosen has higher amount of technological advancements.
Competitive Rivalry
The rivalry among the competitors is considered high and intense. It is convenient to address there is a necessity among the people to make sure that they are able to enhance their competitive advantage by encouraging the idea of technological advancements. It can also be said that the extent of rivalry is intense because of the new firms introducing price cuts options for their operations.
If the resource based view of the company is considered, then it can be said that they have an adequate and professional relationship with their suppliers and have managed to gain a competitive dominance in the industry as well. However, it is also important to consider that the resources perceived by an organisation at the initial stage might not be the kind that aspires for achieving the integral goals and objectives of an organisation. For instance, in the situation of recruiting a skilled professional, there is a possibility of the individual being talented or beneficial but would not be willing to compromise or work profoundly with the others. The company has substantial amount of human resources as it employs about 17000 individuals and offers trending technologies as well (Levi-Faur, 2018). The human capital and the research and development team of the organisation are content towards generating competitive personnel and encourage the initiation of new products in the market. The company also has substantial amount of international presence in North Africa and Southeast Asia markets.
Internal Analysis
The application of the strategic planning tool such as Ansoff matrix allows in the identification of the corporate strategies that could be considered useful by the organisation for consideration of their future growth and development agenda. All the four would be evaluated of the possibilities it could provide for the functioning of the company but at the same time, would result in the selection of one that enhance the functioning of the organisation.
Market Penetration Strategy
The company has incorporated the idea of market penetration in the existing countries it is operating in, so it can be said that in the context of the existing performance of the company in some of the prominent companies they have been able to provide the best of their services and gain substantial amount of customer attention (Moutinho and Phillips, 2018). The company has also initiated other line of products from their company but the electronics items have not gained enough amount of attention from the customers as their telecommunications services have. However, the company has managed to spread across certain markets around the world.
Product Development Strategy
The company introduced new products and has also proposed the idea of introducing 5G services by the end of 2021, thus it can be addressed that the company might not have garnered appraisal in their electronics services but have managed to expand their operations overseas, initiating the idea that they might be inclined to expanding their electronics services to the other countries. In the course of the year the company might be interested in expanding their operations overseas.
Market Development Strategy
As a part of the market development strategy of the organisation it has been identified that the company has an expert team of marketing professionals who have ensured that the company is already the market leader in some of their overseas operations (Kaar and Stary, 2018). The company is the market leader in their home nation and are considered prominent faces overseas as well. Even after gaining substantial amount of popularity the company has not been able to garner followers for their electronics products and at the same time would be initiating 5G services that are questioning the interference level of the customers.
Diversification strategy
The company is prominently known for dealing with substantial amount of technological advances and is also known for initiating technological forces by themselves. The organisation intends to make sure that they have a complete control over the retailers and the suppliers as it would allow them to gain a market status and ensure that they are able to avoid discrepancies associated with the idea of over production as well. However, the company’s interest in other prominent devices or businesses associated with the telecommunications industry makes the organisation more prone to the idea of diversification strategy.
Vertical integration is mainly defined as the strategy that is mainly used to make sure that multiple companies have the ability to gain control over their industry’s value chain. Being the market dominator of the telecommunications industry in UK, it can be said that the company has been accredited enough with the idea of an effective supply chain management (Adhikari, 2017). Also, it has been identified that the company has not been able to maintain a proper relationship management with the supply chain mangers, the reason why the company had not been able to gain enough success in collaborating with the suppliers for the effective functioning of the organisation.
Current and Future Trends
The use of Porter’s generic strategies allows in the proper identification of the proper ideas that allow the organisation to function better in an organisation. If the idea of Ooredo Oman is to be considered, then it can be said that the company has managed to gain substantial amount of dominance in their home nation but there is a possibility that they might not be able to get enough amount of attention from the competitors overseas.
The cost leadership strategy is well known for gaining competitive advantage with the help of lower costs. Here, the primary focus of the company is intended towards charging low costs that would eventually lead up to the point of the businesses charging low prices for their products and services (Liu and Atuahene-Gima, 2018). It is evident that the company needs to enhance its focus towards their relationship with the suppliers in an appropriate manner and develop a partnership with them to make sure that they are able to function effectively in the industry.
Differentiation Strategies
The product differentiation strategy can be considered as critical for any organisation belonging to any industry. In the case of a telecommunication sector, the product differentiations strategy is considered than usual and it can be said that due to the unavailability of wide range of options the companies fail to understand the needs of the customers. In the case of Ooredo Oman it can be said that the company is willing to initiate the 5G services very soon but there is a possibility that the company might not be able to garner the attention of the customers on a massive rate at the global scale as most of the population would be entitled to shift their attention towards their home brands instead of the international ones.
Focus Strategy
The idea of focus strategy mainly encourages the essence of the understanding of the needs and requirements of the target market of the organisation. It can be evidently stated that the people are mainly inclined towards the proper understanding of the ability if an organisation possesses to understand their daily devoir and make sure that certain initiatives is being taken to eradicate the issue (Dodgson, 2018). Ooredo Oman is highly content towards helping the people with their products but it is not possible to cover their needs every time.
The idea of cooperative strategy mainly involves engaging into a joint venture or into a collaboration with a company of similar or different industry to achieve a common organisational goal. There are multiple companies who have initiated the idea of cooperatives strategies to make sure that the people are able to address the importance of gaining substantial amount of profit in the market. Ooredo has exchanged strategic cooperation agreement with the company named Huawei earlier and in the recent scenario, the company extended their contract for 5 years more (Heracleous and Werres, 2016). This agreement allows both the companies to collaborate in ensuring the use of advanced services that would eventually allow in the proper establishment of a workplace scenario for the company.
Competitive Analysis
The evaluation of the corporate strategies and the business strategies can be conducted properly with the application of the SAF model. It is essential that the strategies have been able to fulfil the criteria of the SAF to determine the success rate of the strategies.
|
Strategies |
Suitability |
Acceptability |
Feasibility |
|
Market Penetration |
The idea of market penetration has been considered suitable by the company and would allow them to function better in the industry |
The company is engaged towards improving their sales and target but the regulations of the other countries binds them of their operations and duty to perform effectively. Also the company encounters substantial amount of growth by the end of the year. |
This strategy can be easily implemented as it has been expected that there is a possibility of conducting proper promotional activities due to the availability of resources and viable assets of the organisation. |
|
Product Development |
The company can exploit their R&D department to the fullest and come up with the idea of the proper implementation of the 5G services plan and gain the understanding of the customers on the same |
There is a possibility that the key stakeholders of the organisation would be benefited from it. |
The implementation of the strategy is considered not very difficult due to the availability of creative minds and viable assets |
|
Market Development |
It is suitable for the company to expand in some of the prominent countries or they can form collaborations with the already existing ones for the benefit of the firm |
There are substantial amount of risks involved but the company would be prone to success at a certain rate |
This would require extreme amount of research and licensing efforts |
|
Diversification |
There is a very less possibility of the idea of diversification because of the product portfolio of the company, which is similar to majority of the companies. |
The stakeholders might also deny its need in their lives |
The development of this strategy will not be easy for the company. |
Table 1: Evaluation of the Ansoff Matrix
|
Strategies |
Suitability |
Acceptability |
Feasibility |
|
Cost –leadership strategy |
It is considered suitable and effective for the business of Ooredoo |
The customers will also be pleased from the strategies and the initiatives undertaken by the organisation |
It can be identified as feasible and can be achieved by the organisation effectively |
|
Differentiation strategy |
In the case of Ooredoo, the differentiation strategy has a very less possibility of working due to the product portfolio of the company |
It is an achievable strategy but the success rate cannot be guaranteed |
This would be considered costly for the functioning of the product and would also be difficult in the implementation of the strategies |
|
Focus strategy |
This can be considered suitable for the customers as they would be permitted to make their products highly customer centric |
This is achievable and would entirely focus on the necessities of the consumers |
The results would be witnessed in the long term and being customer centric would earn them more profitable returns |
|
Cooperative Strategy |
It is suitable for the company as it allows them to gain insight of the external operations. The venture with Huawei has turned out to be successful for the company |
It is acceptable to work among cross cultures as both the companies are gaining benefits from this |
The results will also be witnessed in the long term and would be considered as profitable. |
Table 2: Evaluation of the Generic strategies and the cooperative strategy
(Source: Created by the learner)
Conclusion and Recommendations
The assignment led to the better understanding of the aspects that allow the company Ooredo to function effectively in the market. However, due to the unavailability of certain product ranges, the company fails to garner the attention of the customers on a significant level. Thus, it is important to notice that the organisation must acquire certain amount of suggestions for their better strategic performances in the future. The company can initiate the idea of enhancing their product portfolio and explore the possibilities of gaining substantial amount of idea regarding the possible changes or the alterations that can be initiated. The company can also go on to explore their possibilities making advancements in their electronic services for the better operations of their product line. Also, the company can take the initiative to incur the idea of extreme amount of joint collaboration with the international giants to make sure that they are able to function better in the market.
Conclusion
The report provided above focused on the importance of strategic analysis of an organisation. The organisation chosen was Ooredo Oman, which was a Middle East based telecommunications company and was widely popular as the market leader in their respective nation. The report provided substantial amount of knowledge regarding the various aspects associated with the situational analysis and how this has a tendency to impact the performance of the company. In addition, the report also focused on the current and possible future trends of this industry that should be considered by the organisation for the benefit in their business. Further it can be said that the organisation would be capable enough to witness the fact they have engaged in a proper collaboration strategy with a prominent company for the better functioning of their organisation. Further, it can also be added that the company has certain amount of possibility to engage into an idea of diversified and customer-centric services that would earn them reputation in the market.
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