G-etl Telecommunications Strategies - Assignment Example

G-etl Telecommunications Strategic plan Student’s Name: Course Code: Lecture’s Name: Date of Submission: Table of Contents Table of Contents 2 1.0 Introduction 3 2.0 Situation analysis 4 2.1 External environment 4 2.1.1 Political and Legal aspects 4 2.1.2 Economic environment 5 2.1.3 Technology environment 5 2.1.4 Socio-cultural environment 6 2.2 Competitive environment 6 2.2.1 Threat of new entrants 6 2.2.2 Rivalry among firms 7 2.2.3 Bargaining power of buyers 8 2.2.4 Bargaining power of suppliers 8 2.2.5 Threat of substitutes 8 2.3 SWOT analysis 9 2.3.1 Strengths 9 2.3.2 Weaknesses 9 2.3.3 Opportunities 9 2.3.4 Threats 10 2.4 Mission statement 10 3.0 Corporate and functional objectives 10 4.0 Strategic choices and decision 11 5.0 Tactical implementation 12 6.0 Conclusion 12 7.0 References 13 1.0 Introduction G-etl Telecommunications has been in existence for the last six years. it was incorporated in Sydney, Australia in 2007. From inception the company has continuously capitalized on innovation by investing heavily on research and development (RD). The company has a total of 8 products and services, mainly targeting individuals and small and medium enterprises. In ensuring that the products introduced to the market meet the customer’s needs the firm undertakes them through a process of quality control and testing. The company’s brand name “e-TL” is fairly distinguished by consumers considering the number of years it has been in operation. The two leading products that the firm has in the portfolio are the G-etl 94Ri® and Rita-etl 7s®. PJ-etl 12Ri® is the recent introduction in the market that has tremendously increased the sales of the firm. The company has had successes and challenges over the last six years (ABC, 2010). The company experienced high challenges during its entry in the telecommunications industry but has consistently been able to overcome them. The market environment in which G-etl Telecommunications operates in is very competitive and has many opportunities which are yet to be exploited. The telecommunication services have particularly been underexploited. The financial performance have consistently been improving, the firm was able to turn around net loss earnings in its first two years of operation to US$625281 in the last financial year. However, this could be greatly improved if the company had a strong strategic plan. Therefore, this strategic plan is expected to boost the company performance and competitiveness (Shepherd and Wiklund, 2005). 2.0 Situation analysis G-etl Telecommunications operates in four countries with diverse economic, political, legal, socio-cultural, and technological environments. These environments present both opportunities and threats to the firm. G-etl Telecommunications has quite a number of strengths and weaknesses. The situation of the company could be understood by analyzing the following areas. These include; 2.1 External environment 2.1.1 Political and Legal aspects G-etl Telecommunications operates in several countries across the world, Australia, Hungary, Croatia, Romania, Slovenia and United States of America. In these countries there are diverse political and legal environments. The company has to work in accordance with the set framework in these countries. For instance, in its recent entry to the United States market G-etl has to adhere to the pricing law under the Pricing Surveillance Authority. The law acts as an identifier and control of excessive pricing and restrains selected companies from charging excessive prices. In addition, in all the countries it currently operates in, there are laws regarding employment where in most of them at least 75% of the employees must be sourced locally. In all its countries of operation, there is a stable political environment which reduces the risk of doing business significantly. Successive governments in the countries of operation are keen to promote foreign investments such as G-etl Telecommunications. G-etl has been able to meet the legal requirements in the US although it took two years due to thorough scrutiny and testing that was followed (Jhawar, 2011; BCcampus, 2012). 2.1.2 Economic environment G-etl Telecommunications operates in the global economic environment. Therefore, the global economic trend affects the operations of G-etl in the market; demand and sales. The effect of economic environment has particularly been experienced during the global economic crisis; the willingness to buy a product and purchasing power of consumers is affected. The global economic crisis in Europe negatively impacted on the company’s financial performance in 2008 which contributed to net loss earnings (Jhawar, 2011; BCcampus, 2012). 2.1.3 Technology environment Innovation is the backbone of G-etl Telecommunication. Recently the company developed a new mobile handset, PJ-etl 12Ri® which has been well received in the market. G-etl holds in high regard and invests a lot in research and development. It has also outstanding research and development design teams to ensure continuity in innovation. The firm also cooperates with foreign electronic companies such as Foxconn in Asia in boosting the G-etl products design. In addition, recently the mobile devices technology has been rapidly changing which influences G-etl to concentrate on innovation investments another in order to remain competitive (Jhawar, 2011). 2.1.4 Socio-cultural environment In its quest to offer a first-class service to as many customers as possible, G-etl has continued to expand its market outreach campaign across countries in the world. Its market operations are undertaken in multicultural environments. Due to the diverse environment they operate in the firm has developed products and websites in different languages. It is predicted that in a few decades, it would be possible that 50% or even 60% of G-etl proceeds will come from outside of the Australia (Shepherd and Wiklund, 2005). 2.2 Competitive environment 2.2.1 Threat of new entrants The Mobile Phone industry operations are particularly very risky and have high price patents. This limits the entry of new firms or new products from already established firms. Although G-etl is quite new in the industry its product lines have shown high progress. There is high threat of new entrants in the mobile industry due to regularly changing needs of their customers and also frequent changes in technology. Therefore, in order for a company like G-etl to introduce its new product to the market it has to meet the needs of the consumers as well as be current. G-etl’s continuity in innovation and development of products has boosted its edge and is improving acceptance in the market thus easier entry of its new products. However, G-etl’s rate of innovation and products differentiation level is way below that of its main competitors (Jhawar, 2011). 2.2.2 Rivalry among firms The mobile industry is very competitive with many players being involved. It involves high risks and high price patents. G-etl’s main mobile competitors are Nokia and Samsung. In the fourth quarter of 2013 G-etl was fifth after Nokia, Samsung, Apple and LG Electronics in the markets that G-etl operates in. However, in the first quarter of 2013 G-etl improved its market share from 3.4% to 4.1% after the introduction of PJ-etl 12Ri® while retaining its fifth position in the market. This is an indicator that the firm is progressively improving competitiveness (Jhawar, 2011). Figure 1: Market share of mobile companies in the first quarter of 2013 2.2.3 Bargaining power of buyers G-etl’s pricing policy is keyed in the competitor pricing and consumer quality perception. In full realization of the stiff competition in the mobile market G-etl has put in consideration the prices of its competitors ensuring there is on the lower side while ensuring quality control. This tactic has enabled the company to reduce shifting to buy alternative products. However, the company is still facing challenges in differentiation of its products. The company has put aside funds for gearing the innovation process towards differentiation. 2.2.4 Bargaining power of suppliers As a young company G-etl has been unable to purchase its raw materials in large quantities. This has limited the company’s bargaining power which has not favored its production costs. As the company expands it intends to purchase raw materials in large quantities at a discount thus reducing the production cost. G-etl also intends to enter into a mutual agreement with Sony Ericson in raw materials acquisition, so as to boost their bargaining power. 2.2.5 Threat of substitutes In the current market, there exist many products of competitors that G-etl has. Nonetheless, G-etl has been able to create a competitive edge by introducing PJ-etl 12Ri® phone which has special interactive features. The target markets for this phone are the teens and young people under the age of 25 years. The low prices that G-etl offers its products have enabled the company to attract numerous customers as a substitute of other expensive mobile devices. However, with the differentiation problem that G-etl is facing it is losing some of its customers to other brands like Nokia and Samsung. 2.3 SWOT analysis 2.3.1 Strengths Competency in agreements: G-etl is in a strategic process for acquisition of raw materials. This is expected to reduce the company’s production costs. Synergy of knowledge and diverse workforce: The Company has strong workforce and is in the process of further strengthening its continuity by establishing G-etl institute for talent tapping (Shepherd and Wiklund, 2005). 2.3.2 Weaknesses High cost production: G-etl manufactures only a third of its hardware and has only one production plant. This has been a challenge to the company for the six years it has been in operation. Poor brand perception in the developed economies: G-etl’s primary market is Australia and Europe where it sells most of its production. The company has had a hard time accessing the US market; it has made very low sales (Shepherd and Wiklund, 2005). 2.3.3 Opportunities Growth in sales: the company has been enjoying growing mobile phone sales over the last four years and the trend is expected to continue with accelerated innovation (BCcampus, 2012). 2.3.4 Threats Rapid technological change: The mobile phone technology has been rapidly changing and it requires a lot of investments to make these changes. Intense competition: The Company faces intense competition in its mobile phone products. It competes in terms of price against Nokia’s and Samsung’s quality and strong brand (BCcampus, 2012). 2.4 Mission statement G-etl Telecommunication mission is to put forward the highest quality mobile phone products and services to its customers. The founders and the management focus on custom-made service to the company’s customers by offering convenience and speedy service. G-etl Telecommunications has the technological expertise to help out its customers in selecting the products and services that best meets their needs. Finally, G-etl Telecommunications staffs have strong salesperson relationships with the product suppliers and are able to meet customers' demand for the most modern innovation in mobile phone technology. G-etl believes it is imperative to be an active member of the society and to impact people's lives while doing fair business with them (Jhawar, 2011). 3.0 Corporate and functional objectives G-etl Telecommunications plans to focus on the personal users, the general business users, and the specialty business users. The company long-term objective is to offer products and services packages that are priced properly for each market segment and also intends to offer the services that best suit each segment's needs. The company also aims to provide quality products and services in the long-term so as to create a strong brand and value in the customers’ minds. In addition, G-etl aims at promoting creativity and innovation skills by creating an institute of tapping talents thus ensuring continuity and progress. Further, the company aims at expanding regionally and then throughout the world (Stonehouse and Pemberton, 2002). The business objectives of G-etl include company growth, becoming established as the leading distributor of mobile phones and wireless communications services and increasing number of retail outlets throughout the globe. In furthering the business objective community wellbeing is put in to consideration in ensuring the firm gives back to the society (Jhawar, 2011). G-etl functional objectives include increasing sales by 0.25million units annually; the current sales are 1.2 million units annually, thus revenue growth. In achieving this, the company intends to improve its market share especially in the business segment which remains low. Further, G-etl aims at retaining a motivated workforce through recognition, appreciation and promotion (Stewart, 2002). 4.0 Strategic choices and decision Over the few years that the company has been in operation, it has made strategic choices and decisions that are a foresight for growth of market share and revenue. In order to improve its bargaining power with the suppliers, G-etl is in the advanced stages of entering into a raw materials acquisition agreement with Sony Ericson. The two have small market share and high production costs thereby being unable to compete with the leaders favorably (Jhawar, 2011). In order to create a strong brand, the company has developed a production innovation and differentiation strategy. The company aims at developing at least 4 new products annually and adding features to the existing one so as to prolong their lifespan and compete favorably in the market (Jhawar, 2011). 5.0 Tactical implementation In increasing the bargaining power of G-etl, the agreement with Ericson to purchase raw materials together in large quantities increases their negotiation powers. The unity of purpose would boost G-etl pricing system by being in a position to offer cheaper products. G-etl intends to set aside 25% of its net income annually towards research and development so as to boost innovation. The company is also in the advanced stages of establishing G-etl institute aimed at tapping talents and platform for creativity (Stewart, 2002). 6.0 Conclusion In conclusion, G-etl Telecommunications has a promising future. The company is on a growing trend in the Mobile phones and wireless network services. As the company grows there is need to increase new employees to exposure by working with the more experienced ones. In addition, the company should consider establishing social amenities at the workplace so as to reduce stress and burnout among employees. 7.0 References ABC 2010, Our strategic plan 2010-2013, Viewed on 25th 04 2013 from http://about.abc.net.au/wp-content/uploads/2012/06/StrategicPlan2010-2013_ABC.pdf BCcampus 2012, Strategic plan 2012-2015, Viewed on 25th 04 2013 from http://www.bccampus.ca/assets/Content/Reports/strategicplan-2012-web.pdf Jhawar, S 2011, Success Story: Mobile Phone Manufacturer Ramps Up Strategic Planning with MindManager, Viewed on 25th 04 2013 from http://www.mindjet.com/whymindjet/customers/casestudies/cases/CS_SonimTechnologies.pdf Shepherd, DA & Wiklund, J 2005, ‘Entrepreneurial small businesses: A Resource-Based Perspective’, Edward Elgar Publishing Ltd, Cheltenham. Stewart, KS 2002, ‘Formal Business Planning and Small Business Success: A Survey of Small Businesses With An International Focus’, Journal of American Academy of Business, vol.2, no.1, p.42-46. Stonehouse, G & Pemberton, J 2002, ‘Strategic Planning in SMEs - Some Empirical Findings’,Management Decision, vol.40, no.9, p.853-861. Read More