BUSM4192 Introduction To Management Is An Essay.

SingTel is a telecommunication company which is based in Singapore and is the largest company in Singapore in telecommunication industry. SingTel is present in 25 countries across the world and have a total amount of 600 million customers. SingTel was established before 138 years in the year 1879 with headquarter located in Singapore. SingTel serves in three continents which are Africa, Asia and Australia (Singtel.com, 2017). Revenue as of March 2016 is $ 16.961 billion and profit in the same period was $ 3.871. The employee strength of SingTel is a bit less than that of 25, 000 and Optus, which is an Australian based telecommunication company, is the subsidiary of SingTel. The market share of SingTel in the mobile market is 47%, while in fixed line marketplace is 82% and it also holds 43% market share in the broadband marketplace (Hui et al., 2011). The vision of SingTel Company is to shape communication and various other things with the help of the digital technology for the customers of the organization and mission is to help the businesses and other people to communicate with each other without any effort in order to make the world an improved place (Singtel.com, 2017). Also, SingTel ensures easy, fast as well as reliable communication to the customers.

In this particular assignment, mainly the external analysis will be conducted for SingTel with the help of the Porter’s Five Forces as well as Pestle Analysis. Along with that four recommendations will be provided to help the company improve in future and a conclusion will be provided in the end based on the external analysis of the environment.

In the Pestle analysis of the company, political, economic, social, technological, legal and environmental factors will be discussed below in context of SingTel:

Political:

Singapore is a country which is politically very stable and the Trade Ministry and Finance Ministry is in the charge of the economy of Singapore (Tremewan, 2016). For the government of Singapore, the main source of income is the taxes that are collected from the business and as the income of SingTel is of high amount, they are charged with high amount of taxes. The tax that is paid by the company to the Government of Singapore affects the amount of profit as a result. There telecommunication industry is taken in the hands of the Government of Singapore and the government has launched various initiatives and companies in the market in the name of StarHub and M1 which also affects the market share of the company as a result (Kim et al., 2007). So, due to the political situation of the country, the market is highly competitive for SingTel. It is also a fact that Singapore attracts a lot of foreign investments which makes it a bit easy for SingTel to cope with the competition.

Economical:

The economical environment of SingTel helps the company a lot with the help of globalization in the 21^st century. The devices of the telecommunication industry are far reached with the help of the globalization and are sold all over the world and thus the economic factors of SingTel help the company to establish themselves in the foreign market (Ho, 2009). There is also scope for SingTel to make investment in the foreign countries and earn profit from there as with the help of globalization, the national boundaries for trade have been abolished. There was also Asian recession in the year 1999 which lowered the profit of the company at that time, but after that period, the company again started to show good performance and the profit of the company also increased. The investment of the government of Singapore in diverse areas has resulted in a corruption free environment and for that reason, the telecommunication industry has grown a lot and SingTel also got the benefits of growth.

Social:

Singapore is a country which believes in the tradition of their culture though it can be seen nowadays that some individual from younger generation is taking up the Western culture (Berkman et al., 2014). With the increasing of the purchasing power of the common people of Singapore, the sales of SingTel have also raised. Individuals are demanding more and more products which are high in quality and for that reason SingTel can provide more customized products to the customers and earn more profit from them.

Technological:

Internet Telephony is the new kind of service in which SingTel can invest more money in order to develop their market more and more. With the help of the internet website of SingTel, the company can sale their products to the customers which will help them to increase their sales as a result.

There is also some disadvantage of the technology on the part of SingTel which is that, Internet Telephony will have to bypass the communication networks of the local communication lines while connecting with the calls that is made overseas (Liao and Lien, 2012).

Legal:

Among the legal environment of SingTel, there are various rules and regulations from the government which needs to be followed by the company. Apart from paying the employees with minimum wage and safety in the workplace, the company should also follow the legal regulations such as not charging the customers extra money for free apps and also should not promote smear campaign against the government of the country.

Environmental:

Apart from all other factors, the environmental factors should also be focused on by SingTel. In the environmental factor, SingTel should be able to use green networks which will not pollute the environment. They should also be following water conservation and maintain the safety of the employees (Lee, 2008).

There are five market forces which will be analysed while conducting external analysis for SingTel which are mentioned below:

Threat of Substitute:

The threat of the substitute products for the products provided by SingTel is high in the market as they use fixed lines for the process of communication. The fixed lines are being replaced in the market by Voice over internet protocol and also with the help of the mobile phones (Garbacz and Thompson, 2007). As the mobile phones have cost benefit than the fixed lines, people are shifting more towards smart phones and thus the substitute threat for SingTel is high in the market. That is the reason; SingTel is trying to provide the customers with broadband in order to be competitive in the market.

Bargaining power of the buyers:

There are various competitors in the market and as a result the buyer power in the marketplace is very high. The buyers with the help of bargaining can force the price of the SingTel products to go down in the market. The customers are also able to choose internet in order to call and reject fixed line services from SingTel and that is how they are forcing the fall in the product price with their bargaining power.

Bargaining power of the suppliers:

The bargaining power of the suppliers is moderate in the marketplace as the suppliers are bound by a contract from SingTel for 2 years and in those 2 years, they are not able to bargain with the company and thus the power of the suppliers is almost in the hand of the company (Hamid and Atan, 2011). As SingTel is the largest company in the market, for that reason, the bargaining power of SingTel is also low.

Threat of New Entrants:

The threat of new entrants in the marketplace is very low as license is required on the part of the company to enter into the market which is very costly to obtain and also if a new competitor is trying to enter in the market, the market share of SingTel is impossible to achieve by the competitor in a short period of time and thus new entrants threat is very low in the market. Also, the capital is a huge requirement for this industry and a lot of capital is needed on the part of the new entrant which can also be a factor that makes the threat of new entrants very low in the market.

Rivalry Intensity:

The market share for SingTel is the highest in the Singapore though the competition in the market is fierce and high rivalry in the market (Lim et al., 2011). M1 is the major competitor of SingTel with 32% market share in the mobile operator market and StarHub is the main competitor of the company in the broadband market with 25% market share. In the broadband market SingTel holds 32% of the market share while in the mobile operator market, the market share of SingTel is 44%. The resources of M1 are huge and are also powerful in the market which provides them the ground to fight with SingTel (Ang, 2011). Also the pricing of the products and services of each company in the market affects the other telecommunication company and if the price of broadband is lowered in the market by one competitor, another company in the market is bound to lower their price due to the intense competition, as, otherwise the customers can shift their demand to the competitor with lowest level of price. So, from the above analysis, it can be said that the market rivalry for three firms is very high in the Singapore Telecommunication marketplace.

From the discussions that have been made above there are a few recommendations that can be provided for the company in order to make the future look bright for the company and they are mentioned below:

Firstly, due to the advancement of technology, the shift from the fixed telecommunication lines into the mobile phone market can be seen among the customers and for that reason SingTel can focus more upon providing mobile services to the customers rather than focusing upon the providing the customers with fixed telephony services as it is on the verge of becoming obsolete (Lam and Shiu, 2010). SingTel can provide diverse amount of services and can also start provide the customers with mobiles of their brand and connections free with the mobiles which will help the company to raise their sales in the market and as a result their profit will also increase.

Secondly, SingTel is present in Asia, Africa and Australia and for that reason they can think of extending their business in Europe and America too which will help them to provide the countries of Europe and America with new products and services and also help the company so that they can increase their sales. Moreover, as the markets of Asia and Australia are congested with various service provider networks, the expansion is the best strategies for SingTel which can provide them increase their market share in the world marketplace.

Thirdly, with the help of lowering the price of the broadband than the competitors of SingTel which are M1 and StarHub, more capture of the demand in the market is possible. Te market share in Singapore can be increased by SingTel with the help of offering lower process in the broadband market. Being the highest market share company in the country, the customers will be able to trust the company easily and this will help them to raise their market share further.

Lastly, internet is a technology that can be used by SingTel to promote their services and the products of the brand. The internet can help a lot to promote the products and the services produced by SingTel with the help of the pay per click and pay per view ads in social media sites. As the social media sites are booming with individuals and youths, the youths of the country can view the ads of SingTel in the social media and can adopt the products of the company as well as their services and thus the sales of the company can be increased (Lin and Liu, 2011).

From the above discussion, taking on the Porter’s Five Forces and Pestle Analysis, in the conclusion it can be said that it is very important for the company to increase the foreign investment of the company as it is not in the hands of SingTel to control the taxes which is prepared by the government. Also, manipulating the mentality of the youths in order to take up the products and services of the company is also important. SingTel should also be able to use the internet in order to promote their services and sale their products through their websites and follow the legal rules and regulations of the government.

In order to erase the threat of substitutes, SingTel can shift their focus into the mobile connection market from the fixed telephony which can increase their sales and also produce more services and products that are innovative in nature. They can also lower the prices of the services in order to attract more customers towards the company in order to raise their part of share in the market (Cheng, 2007). Lastly, the bargaining power of the buyers can be lowered by the company with the help of providing the customers with the products according to their specifications and demand.

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