Portel's Five Forces Model Telecom Industry

The Pay TV industry in the US is changing rapidly. There are five main forces according to Porter that can describe this. The first four surround the fifth which is competitive rivalry. These forces help decide if a market is profitable. (Mindtools)

The intensity of rivalry, which is the most obvious of the five forces in an industry, helps determine the extent to which the value created by an industry will be dissipated through head-to-head competition. The most valuable contribution of Porter's “five forces” framework in this issue may be its suggestion that rivalry, while important, is only one of several forces that determine industry attractiveness.

This force describes the intensity of competition between existing players (companies) in an industry. The results of high competitive pressure could impact prices, margins, and hence, on profitability for every company in the industry.

But Firstly, we will start this part by talking about the importance of a deep analysis of the industry’s structure. A deep knowledge of the industry the company is in, is extremely important. The industry structure is unique and varies from industry to industry of course. It will determine the level of competitiveness and attraction of the industry. With the Five Forces model (Porter) and PESTEL (Political, Economic, Social, Technological, Environmental, Legal) analysis, the organization will get a better understanding of the market will allow you to know the requirements for the possible creation of sustainable competitive advantages and take the right strategic decisions. According to Porter, to create an efficient competitive strategy, it is important to understand the rules of competition that determine market attractiveness.

The Demographic environment relates to the structure of populations (Oxford Dictionaries | English, 2017). The factors that contribute to the demographic environment relevant to this report are location and density of the population.

Vodafone is one of the most important players on the European telecommunications market. However, this does not mean that the company has an easy job at retaining its customers and at increasing its market share. The most important competitors of Vodafone are represented by Orange and Cosmote. The regulations in the business field determine these companies to provide similar products and services, at similar prices. Therefore, it is important that Vodafone focuses on its communications strategy in order to strengthen its position on the market.

An industry analysis through Porter’s Five Forces reveals that market forces are favorable for profitability.

I. BACKGROUND: CelluComm and GMCT and the Industry AT&T’s Bell Laboratories cellular telephone networking innovation had enabled several cellular network operators to get licenses from the FCC to operate in separate license territories right about the same time AT&T was broken up in early 1980s. These operators were either companies like Cellular Communication Services, Inc. (CelluComm) or small entrepreneurs who had won license territories through the lottery system. CelluComm’s  president  and  founder  Ric  Jenkins  was  known  for  being  an  aggressive businessman  who  had  extended  it  to  a  200  million  dollar  enterprise  ranking  in  the  top  20  of  the industry.  Key  to

In the competitive environment, Comcast does not get threatened with new entries into the market very often as the cable and satellite industry is very costly to enter. Comcast also does not have much supplier power so that does not factor very heavily into their strategy, especially now with the increase in streaming and satellite services for television. However, the other three forces in the Porter’s five forces model are all very active in Comcast’s business model (10K Comcast, 2017). The consumers subscribing to Comcast and the businesses advertising with Comcast do possess a certain degree of buyer power, this forces Comcast to keep their prices competitive and relevant to current demands in the market (10K Comcast, 2017). The threat of substitution in this industry is growing, this can be attributed to poor customer service, higher fees and the growth of online streaming services such as Netflix and Hulu that are taking customers away from traditional cable and satellite companies (Levy,2016).

It can be used to "kick off" strategy formulation, or in a more sophisticated way as a serious strategy tool. You can also use it to get an understanding of your competitors, which can give you the insights you need to craft a coherent and successful competitive position.

     In today’s telecommunication market there is a lot of competition by industry giants such as Sprint,

8. Threat of New Entrants: “There are a number of low-cost carriers (LCCs) in the domestic market and the Company competes with LCCs over a very large part of its network.”

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.

The next study that is examined was the Five Competitive Forces. This shows the industry’s competitors, threats of new entrants and substitutes, and the power of the customers and suppliers. The main rival competitors within the TV service providers industry are Dish Network, Direct TV, Comcast Cable, Time Warner Cable, and Atlantic Broadband. The rivalry of these competitors could lead to lower profits due to price competition and new technology as each is trying to stay competitive in the industry.

Oligopolistic Markets are less common, but still prevail in the modern economy. An Oligopolistic business is one with few competitors, basing its revenue off of “outsmarting” its opponents by analyzing their decisions and predicting the outcome. Having an analysis of an opponent provides the basis for Oligopoly, as income is based on providing a product that has more features than another product, released to the public around the same time. The Cellular industry provides a pristine example of the Oligopolistic Market.