Using the telecommunication industry, design a Strategic Group Map. Then, apply
ID: 465695 • Letter: U
Question
Using the telecommunication industry, design a Strategic Group Map. Then, apply the Five Forces Model to the telecommunications industry. Identify which of the five competitive forces is strongest? Which is weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants? Include rationale. Determine whether the strength of the five competitive forces, overall, will allow for you as a new entrant to introduce a new telecommunication product.
Explanation / Answer
Five forces model to the telecommunication Industry:
1. Threat of new Entry (Low)
High Capital Fixed cost
Regulatory approval and licensing
High operational cost
Scare technical skills
2. Bargaining power of Suppliers (Medium)
Multiple Equipment Suppliers
Scare technical and human resources
Service differentiation
3. Bargaining power of Buyers (High)
Multiple telecom operators
No service differentiation
High switching cost of business customers
Low switching cost of residential customers
4. Internal and External Rivalry (High)
Deregulated Industry
High exit costs and barriers
New and low cost technologies
5. Threats of substitute (High)
Efficient backbone technologies
Cheaper alternatives
Packaged services
Lower switching cost
Bargaining power of buyers is the stronest and threat to new entry is weakest. Threat of substitute seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants because it may cause the arrival of cheap alternatives which may impact the market share and profitablity of new entrant.
Author's Note: Please be specific to question that need to be answered.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.