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Pestle Analysis for Etisalat

Question:

Discuss about the Frontline Managers in Service Organizations.

In the modern competitive market, it is essential for the companies to make sure that they understand their status in the industry. It is also crucial that firm evaluates its internal and external environment (Mullins, Walker and Boyd Jr, 2012). This helps them in making plans for the operations of the firm. Any time when the company places its products in the market, it is essential for them to make sure that they have an effective marketing plan so that it becomes success. Every company has to make sure that there only goal is not to make profits only but they also have to think about the ethical issues present in their business. Etisalat is one of the major telecommunication companies operational in UAE. It is facing higher competition from the other rivals. This report highlights the internal and external environment of the Etisalat as well as underlines its competitive capabilities to sustain in the industry by utilising the opportunities available in the market. It also provides its competitors analysis and the ways in which its product is perceived in the market.

It is essential for any company to evaluate the environment in which it is doing its business (Wilson and Gilligan, 2012). For understanding the environment of the company PESTLE analysis can be highly beneficial. Pestle analysis for the Etisalat is as follows:

  • Political: This Company is working in the political environment that is more than stable. UAE has good political bonds with the other countries and hence it is easier for the company to manage its business in other parts of the world. The tussle between the Arab Countries for power can be a problem for the company (David, 2011). Business policies by the UAE government are also very helpful for the firms running inside the nation. In other parts of the world, various types of political instabilities can be seen. Many political ties has been made and broken which is making it difficult for the company to expand its base. On the positive and negative scale 3 points can be given to this factor.
  • Economic: Both the economic state of the company as well as that of the UAE as a nation is on the higher side. Such a strong economy like UAE helps the Etisalat to conduct its operations smoothly and making higher profits from its operations (Hitt, Ireland and Hoskisson, 2012). There are many stakeholders that are also available inside the nation who can invest in future expansion plans of the cited firm. But in the others parts of the world there are lot of economic instabilities that can be noticed especially in the European market. On the positive and negative scale economic factor is weighted as 3.
  • Social: Society of UAE is changing and so are their demands (Hill, Jones and Schilling, 2014). Communication needs have changed as they demand for higher connectivity in every region of the country. People also started to demand for the high speed data. To fulfil the needs of the society company has to make continuous up gradations in their plans. Since the per capita income of the country is on the higher side hence people can pay high for good services. On the scale of negative and positive 3 points is given to the company.
  • Technological: There are many technological changes that are taking place in the country (Foxall, 2014). These changes are happening at faster speed and hence Etisalat also needs to make sure that they are ready for purchasing the new technology. With the advancements of technology and the lowering of data rates in the market, it has become essential for the companies to make sure that they generate higher profits. On the scale of positive and negative weight of 3 has been given.
  • Legal: The legalities for doing business have changed but still the ease of doing business inside the nation has become easier. Rules related to telecomm has also eased up which is in favour of the company (Baker, 2014). The legal complications have been lowered down so as to make sure that Etisalat can easily invest inside the country. On the negative positive scale weight of 3 is given to this factor.
  • Environmental: Most of the technology that this firm is using works on the frequencies that are harmful for the environment especially to the living organisms. This has increased the tensions of the government as they have to make sure that health issues due to the use of such technology does not arise (Chernev, 2018). On the scale of negative and positive weight of 3 has been given to this factor.

The overall final index of the company is 0.75. The composite PESTLE index is greater than 0.45 which suggests that environment is favourable for the operations of the company.

Etisalat is one of the best performing Telecommunication Company in the UAE. It is the 14th largest mobile network telecommunication service provider (Vyuptakesh, 2013). Core competencies of the company

  • It is operational in Around 16 countries of the world with a consumer base of around 167 million.
  • It is generating revenue of around 51.7 billion with a net profit of around 8.3 billion.
  • It has done 510 roaming agreements that covers around 186 countries of the world enabling features like GPRS, Blackberry, 3G, 4G voice roaming etc.

Historical development This company was established in the year 1976 as a joint firm between International Aeradio Limited, a British company and a local partner. In 1983 structure of ownership changed and the UAE government had 60% share in it. There was increase from 36000 exchange lines in 1976 to more than 737,000 in 1998. This company has become the 6th largest firm in the middle-east and one of the largest contributors to the development of UAE outside the oil sector (Shayah, 2015).

Its mission statement states that to provide a best-in-class total customer experience internationally and domestically (Etisalat, 2018). To deliver attractive returns to shareholders by investing in the long term projects for future of the company.This company is known for not only making higher profits but also known for operating its business in more ethical manner as compared to other competitors in the market. It has done better in the economic responsibilities as they have been generating higher profits and sharing it with their stakeholders (Theodosiou, Kehagias and Katsikea, 2012). In legal responsibilities it has obeyed the laws in the past and has made policies so that violation of ethical practices is not possible. In terms of Philanthropic responsibilities it has managed to make its name as a good corporate house.The company has addressed the issues related to the ethics in a good way. This company has to manage the privacy of the data of millions of people which can be a difficult task and hence company needs to have a good policy in this regards. In future, company has to make sure that with the addition of many new technologies like IOT and cloud. This company has totally abolished the practice of child labour as well as has become strict over the practice of discrimination which is not seen in UAE.

Competitor Analysis

It is crucial for any company to make sure that for which target market they are bringing its products. It helps to shape their marketing strategies in a better way (Elkelish and Hassan, 2014). This company aims to bring 6G technology in most of the countries of its operations. This is a technology that will help the firm in increasing the speed of data it is providing to its clients. This is the specific product that suits in the UAE or Arab market only. This is due to the reason that 6G technology is of higher cost and UAE being a market that is having higher per capita income.

The needs of the company while bringing these products will be the advanced technology as well as the new skilled labours that are capable of doing operations on this technology (Meissner, 2012). In order to do this smoothly they need high amount of investment for which large financial resources will be required.

The key target market of the company will be the people from the age group of 15 to 75 years. In this also the largest amount of data requirement is of the people that are under the age group of 45 years.

Vodafone: This company is operating in an around 150 plus countries and providing services to more than 470 million consumers. It is having more than 1000000 employees all across the globe. In terms of its growth evaluation it can be said that it is having a fast expanding cellular market globally. It is having high marketing capabilities. Its strategy of merger and acquisition has helped them in their success. Their major strength lies in its brand name and quick decision making leadership while poor performance in last few years have been their biggest weakness (Elkelish and Hassan, 2014). Their competitive strategy is to provide best services in the market. In some of the market they are market leaders while most of the market they are niche.

Three mobile: Their strength lies in their excellent marketing and advertisement capabilities as well as higher brand loyalty. Their weakness is their decisions related with pricing. Their marketing capability lies in their control over niche market.

Telenor: It is one of the world’s largest telecommunication companies in the whole world. Its strength lies in its market base while the weakness lies in the slow strategic decision making process. Their strength lies in their market share as well as their strong brand name. They have been doing joint ventures for expanding into the new market.

AT&T: This firm has a market base of around 100 million customers in approx. 200 countries. Their strength lies in their employee base of more than 250000. Its marketing capability is high as they are known for the advertisement and marketing strategies they make (Bodolica and Spraggon, 2014). Their strength lies in its quality of services while their weakness lies in their limited market share.

It is essential for the companies to know their strengths and weaknesses. This helps them in making the strategies for the future (Behery, Jabeen and Parakandi, 2014). It also helps firms to understand the factors that cause them to underperform. It also helps in understanding the position of the organisation with respect to critical success factors.

Strengths
  • One of the major companies in Middle East in the services like mobile, corporate data services, internet, voice calls, broadcast and roaming.
  • They are the highest contributors to the development of UAE other than oil sector companies.
  • Higher revenue and higher profit shares showcases the performance of the company in the past few years (Davies, 2015).
  • Highly innovation friendly company and hence they are market leaders in many parts of the world.
  • This company has 525 roaming agreements in approx. 185 countries enabling 3G, voice roaming and Blackberry.
  • Support from the government of UAE has become the major strength of the company. This helps them in making effective decisions related to political and economic affairs.

Strengths and Weaknesses

Weakness

  • Less control in various countries all around the world.
  • They have been poor in managing their global operations which has resulted in the some bad performances in the past.

Opportunities

  • They have high potential of expanding their business in developing nations like India and China. These two countries have large population which can become an excellent market for the cited firm.
  • They have higher chances of enhancing customer services (DUBAI TRADE, 2011).
  • They have the opportunity of providing increased bucket offering to their consumers which can help them in attracting larger number of consumers towards the products of the company.

Threats

  • High numbers of competitors are present in the market. Some of the major competitors in the market like Telenor, Vodafone, AT&T are having higher capability to influence the trends in the market.
  • Brand clutter might lead to major consumer churn rate.
  • There are new players entering into the market. These new entrants have new kinds of plans that are capable of attracting consumers towards their products.

With the above analysis it can be said that the company has a good capability to address the needs of the market. This analysis also explains that in spite of such a large competition in the market Etisalat has the capability to lead the market. Their excellent financial and other kinds of resources give them the strength to capitalise on the opportunities they have in the market.

In existing time the value preposition for the company is that it is fostering innovations. This company is known for its innovative approach that it uses for attracting its consumers. Since the 6G technology is innovative and is specifically designed for the countries like UAE having higher per capita income and has less tax barriers for business.

There are some market issues that are faced by the organisations:

  • Excessive competition: In the market of UAE this company is facing a challenge as there is limited amount of people living there while the number of companies has increased considerably.
  • Oil and gas industry dominance: There is a dominance of the oil and gas companies inside the country which tends to influence of market and its demands (Al-Ansaari, Bederr and Chen, 2015).
  • Excessive advancements in technology: This has become a challenge for the company as they have to make sure that they make innovation at a pace that they beat all their competitors in the market (Stefanovi?, et al., 2015). Without making such strategy company may fail to ensure their high growth.

It is essential that company places its product in a better way (Suliman and Hayat, 2011). The company aims to place its products in the premium products that provide excellent experience to the consumers. This helps the company to gain higher profits from its chosen product. As UAE is the market where people can easily avail this technology and it is feasible in the cited market.

People also understand the product or services of the company to be better than other competitors (Khan, 2012). This is the reason why the company has able to capture the larger part of the UAE market. People are ready to pay the higher prices for the products and services of the firm.

On the positioning map the company aims to put its product in the first quadrant i.e. High performance and high price. This is perfect for the companies that are in the business of telecommunication in the rich economies like UAE. This kind of positioning helps companies in making a higher brand name and brand value in the market. This is one of the best positions to achieve higher profits in the UAE market.

On the perceptual map this company is placed between highly innovative and high coverage quadrant. In terms of technology most of its big competitors are under the same sub category. This is the perception which every company wants to make in the telecomm industry. Since innovation is the base of the industry as well as it is also important for any organisation to have a high coverage. This is the most primary thing that every company demands.

Conclusion

From the above report it can be concluded that Etisalat is one of the best performers in the telecomm industry. This company needs to analyse on its strengths so as to grab the opportunities present with them. This company aims to launch its 6G technology in UAE for which the environment of the country is very good. This company has been performing well in terms of CSR activities which have helped it in creating a good brand image. On the perceptual mapping this company places its 6G product on highly innovative and having higher connectivity. On the positioning map it is placed in the region of high performance and high price.

This will be a fairly new technology in the market and hence they have to make sure that there is proper implementation of the technology. The bandwidth requirement for this technology will also be high hence companies need to properly invest on the technology for making this swift smoother. Company should also make improvement in the customer services departments so that better services can be provided to a consumer which is necessary for the growth of the company.

References

Al-Ansaari, Y., Bederr, H. and Chen, C., (2015) Strategic orientation and business performance: An empirical study in the UAE context. Management Decision, 53(10), pp.2287-2302.

Baker, M.J., (2014) Marketing strategy and management. Palgrave Macmillan.

Behery, M., Jabeen, F. and Parakandi, M., (2014) Adopting a contemporary performance management system: A fast-growth small-to-medium enterprise (FGSME) in the UAE. International Journal of Productivity and Performance Management, 63(1), pp.22-43.

Bodolica, V. and Spraggon, M., (2014) Managing Organizations in the United Arab Emirates: Dynamic Characteristics and Key Economic Developments. Springer.

Chernev, A., (2018) Strategic marketing management. Cerebellum Press.

David, F.R., (2011) Strategic management: Concepts and cases. Peaeson/Prentice Hall.

Davies, W., (2015) The International Business Environment: A Handbook for Managers and Executives. CRC Press.

DUBAI TRADE. (2011) UAE business environment. [Online]. Available at: https://www.dubaitrade.ae/knowledge-centre/business-in-dubai. [Accessed on: 10th March 2018].

Elkelish, W.W. and Hassan, M.K., (2014) Organizational culture and corporate risk disclosure: an empirical investigation for UAE listed companies.

Etisalat. (2018) Driving the digital future. [Online]. Available at: https: https://www.etisalat.ae/en/about-us.jsp. [Accessed on: 10th March 2018].

Foxall, G., (2014) Strategic Marketing Management (RLE Marketing) (Vol. 3). Routledge.

Hill, C.W., Jones, G.R. and Schilling, M.A., (2014) Strategic management: theory: an integrated approach. Cengage Learning.

Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., (2012) Strategic management cases: competitiveness and globalization. Cengage Learning.

Khan, M.U.H., (2012) Stability and Sustainability of UAE Macro-Economy. Defence Journal, 16(3), p.1H.

Meissner, H.G., (2012) Strategic international marketing. Springer Science & Business Media.

Mullins, J., Walker, O.C. and Boyd Jr, H.W., (2012) Marketing management: A strategic decision-making approach. McGraw-Hill Higher Education.

Shayah, M.H., (2015) Economic diversification by boosting non-oil exports (case of UAE). Journal of Economics, Business and Management, 3(7), pp.735-738.

Stefanovi?, M., Tadic, D., Arsovski, S., Pravdic, P., Abadi?, N. and Stefanovi?, N., (2015) Determination of the effectiveness of the realization of enterprise business objectives and improvement strategies in an uncertain environment. Expert Systems, 32(4), pp.494-506.

Suliman, A. and Hayat, R., (2011) Leadership in the UAE. Leadership Development in the Middle East, Edwar Elgar, Cheltenham, pp.104-128.

Theodosiou, M., Kehagias, J. and Katsikea, E., (2012) Strategic orientations, marketing capabilities and firm performance: An empirical investigation in the context of frontline managers in service organizations. Industrial Marketing Management, 41(7), pp.1058-1070.

Vyuptakesh, S., (2013) International Business: Concept, Environment and Strategy. Pearson Education India.

Wilson, R.M. and Gilligan, C., (2012) Strategic marketing management. Routledge.

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My Assignment Help. (2019). PESTLE Analysis Of Etisalat - Strengths, Weaknesses, And Opportunities. Retrieved from https://myassignmenthelp.com/free-samples/frontline-managers-in-service-organizations.

"PESTLE Analysis Of Etisalat - Strengths, Weaknesses, And Opportunities." My Assignment Help, 2019, https://myassignmenthelp.com/free-samples/frontline-managers-in-service-organizations.

My Assignment Help (2019) PESTLE Analysis Of Etisalat - Strengths, Weaknesses, And Opportunities [Online]. Available from: https://myassignmenthelp.com/free-samples/frontline-managers-in-service-organizations
[Accessed 26 February 2024].

My Assignment Help. 'PESTLE Analysis Of Etisalat - Strengths, Weaknesses, And Opportunities' (My Assignment Help, 2019) <https://myassignmenthelp.com/free-samples/frontline-managers-in-service-organizations> accessed 26 February 2024.

My Assignment Help. PESTLE Analysis Of Etisalat - Strengths, Weaknesses, And Opportunities [Internet]. My Assignment Help. 2019 [cited 26 February 2024]. Available from: https://myassignmenthelp.com/free-samples/frontline-managers-in-service-organizations.

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