Case Study Of Rivalry In The Telecommunication Industry

The future of the telecommunication industry is an exciting future. No longer can these companies depend on telephone service plans to maintain profit. Each company needs to find other avenues, packages and services that can be sold to existing customers while attracting new customers. The companies

The main advantage of the vertical integration is the increased control. For instance, Wal-Mart with large market share is attractive to supplier. Though

The major thrust for the telecommunications sector is coming from within the industry due to continuous network and product upgrade and invention by industry players.

The telecommunications industry has steadily rebound since 2009; this is because of the growth of not only the mobile and broadband structures, but also the increase of the video market. In Figure 1, the projected outcome is indicates a steady increase in the new 4G mobile broadband networks which will fuel continued wireless growth. “Business customers in particular will continue to use this technology to expand their capabilities beyond the desktop computer. Emerging markets such as China, India and Latin America are expected to see strong growth,” (Verizon, 2011).

Perhaps the reason for such growth in wireless service is the nonstop development of smart phones (Apple’s iphone, Samsung’s Galaxy, RIM’s Black Berry, etc.). The attractiveness of high technology devices helps complimenting the service. The negative growth for voice can be explained by the stable growth for data as it is can be seen as a substitute.

Over a quite long period prior, telecommunication system has incredible improvements from the wire to wireless phone technology. “The ability to convey information quickly, accurately, and efficiently has always been one of the main focuses driving human innovation. From prehistoric man with their signal fires to the smartphone-wielding high-powered executives of today, communication still remains a key for survival and success.” (The History of Telecommunication) Telecommunications set a worldwide network helping people closer together. Nowadays, there are many firms with good services, such as AT&T, Sprint, PCS, T- Mobile, and Verizon in the US. Among these firms, AT&T is the telecommunicating firm that I would like to mention here about its mobile share value plans. Besides its services and products supplied, the mobile share value plans are one of the major changes of AT&T in 2014. The AT&T’s competitiveness, which is based on its pricing and servicing policies, is to measure against other companies in the Telecommunication Industry market.

Vertical integration allows executives and management to control distribution costs that often involve multiple mark-up and re-selling stages. A single organization that manages their own distribution process will enjoy the ability to optimize resources and minimize waste. Vertical integration provides more direct control over the value chain. When retailers develop or acquire a manufacturer, they gain power over production aspects and distribution processes. When manufacturers engage in retailing, they can control how they present and market their products to

The vertical integration is arrangement that tends to keep the supply chain of a company owned by the same company

Vertical integration is a system where an organization grows its business operations into various steps on a similar creation way, such as when a manufacturer owns its supplier or distributor. Vertical integration can help organizations lessen costs and enhance efficiencies by diminishing transportation costs and decreasing turnaround time, among different favorable circumstances (Clara, 2016). Notwithstanding, in some cases it is more viable for an organization to depend on the set up mastery and economies of scale of different sellers as opposed to attempting to wind up vertically integrated. It can be a forward integration or backward integration or a combination (Berkowitz, 2011). For example, acquiring a supplier or distributor in the

The dominant economic traits of this industry start with having an enormous amount of capital required for staying competitive. One is also required to spend lots of money on research and development, as the telecommunications industry seems to be the vision of the future. More and more companies like AT&T are trying very hard to combine their network services of phone line, video and data transfer, high speed internet access, and television cable via one line in the consumers homes. With a successful combination of the above stated services AT&T is hoping to be the industry leader in the near future.

In this following report I will discuss the phone industry and analysed it in great detail. I will analysis the market structure and try and understand why the mobile industry falls to heavily oligopoly structure. I will highlight all the structures, however I will discuss in detail how, for example Vodafone can be incorporated in the porter’s five forces method to show how the mobile industry has devolved over the years and to understand if consumers are driven by the actual technology of the phone but if it driven more by style.

Competitive rivalry exists between companies with the same or similar products/services and similar markets. Factors to be considered include:

Economic changes over the last decade in the telecommunication market and the global networking of the industries have led to an serious transformation process within the whole sector. The previous western monopoly position has given way to an international oligopoly. Increasing competitive intensity and a continuous pressure for innovations have all contributed to decreasing gross profit margins and high cost pressure in the ICT market.

In terms of communication and coordination, vertical integration leads to efficient and effective collaboration between supplier and Dell, and between Dell and customer through the physical proximity, established patterns of communications, and greater willingness to cooperate with other members of the same group. Another rationale for vertical integration is real time responsiveness and inventory management. Dell has real-time updating of order status and is able to check order status regardless of where the order is in the fulfillment process, which provided Dell with differentiating capabilities. Improved inventory

2. Barriers to entry in the mobile phone industry is high because any new entrants will need high investments in R&D, capital investment, technological investment and marketing in order to compete with the established organisations