Stc Five Forces Model and Competitive Advantage

1096 words 5 pages
Rivalry Among Competitors
In 2005 Saudi Arabia became a member of WTO and opened up the Saudi Telecommunications market to foreign competitors. The Saudi Arabian Telecommunication market has become increasingly competitive. In addition to competing on prices all the major competitors are striving to offer differentiated products and services aimed at increasing their market shares. The competition is apparent in the decline in STC’s income despite higher revenues. Table 1 – Level of Competition (2008) | | | | | | | | | | | | | | | | Local services | Domestic fixed long dist | Inter-national fixed long dist | Wireless local loop | Data | DSL | Cable modem | VSAT | Leased lines | Fixed Wireless Broadband | | | C | C
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Satellite phones can either be considered a competitor or substitute. However for our discussion it is considered a substitute which has a possibility of threatening the mobile phone market if innovation leads to more functionality in Satellite phone handsets with probable introduction of satellite internet. Overall the force of threat of substitutes has high impact on the Saudi telecommunications market competitive scenario.
Power of Buyers
Approximately 59.4 % of the Saudi population is between 15 to 64, with a per capita GDP of $ 21,300. Customers tend to demand products that are high in quality and reasonably priced. The shifting costs are negligible to zero as such the power of buyers is moderate to high. The evidence shows that the prices have been driven down as such it is obvious that the Power of buyer has been and remains high.
Power of Suppliers
Network Equipment Providers (NEPs) are companies that provide communication solutions to Service Providers like fixed or mobile operators as well as to Enterprise customers. If you place a call on your mobile phone, surf the internet, join a conference call or watch a video on demand through IPTV (internet protocol TV) – it is all NEPs technologies that are enabling such kind of services.
The key players per type of customer segment are Service Providers; Alcatel-Lucent, Ericsson, Huawei, Juniper, NEC, Nokia-Siemens, Nortel, ZTE, Emerson Network Power and Enterprise Sector Providers; Avaya, Cisco, Motorola,