Since the last 130 years Singapore Telecommunications Limited (SingTel) has been operating its business activities successfully and has also played a vital character in the growth and development of Singapore as one of the top leading brand name in the sector of Tele-communications in the economy. The business corporation has been successful in and is doing well in serving the best quality of services and global communications solutions to the consumers so as to ensure the best level of satisfaction (Swotandpestle. 2017). The below mentioned is the external analysis of the business entity and the prime aim of conducting this analysis the provision of the overview of SingTel's approach, growth and performance. And this all has to be considered in the attainment of the competitive advantage and for business operations and how the business corporation is working with their regional subsidiaries. The policies, practices and the programs, which are being followed in the organizational culture and the business environment of the entity and these, are covered under four prime areas – Environment, consumers, Market and the society.
Emergence of Liberalization and Privatization of Telecommunications in Singapore has been come-up as a revolution and has also been supported by the governing authorities of the Telecommunication Authority of Singapore (TAS) (Fernando, 2011). There has been an emergence of the phase of the fast-changing technology in the telecommunications industry and the same has been observed in the case of SingTel, and this concept has been gaining an encouragement as per the requirements of the consumers who belong to very high society. And for the attainment of these demands and deeds of the consumers the business corporation has decided a worldwide trend which will be focusing towardsderegulation in the sector of telecommunications, privatization and liberalization.Also number of opportunities and challenges has been brought up for SingTel by this trend. Moreover the business corporation is majority owned by the Temasek holdings, which is considered as the investment wing of the Singapore holding (Babatunde&Adebisi, 2012). It has been considered as the biggest business entitiesin terms of market capitalization in Singapore exchange and has net portfolio value 223 million Singapore dollars. Further Liberalization, deregulation and an intense competing business environment has been offering a viable approach which also ensures and provides an assurance of improved value of products and services at extremely competitive prices (Wild, Wild& Han, 2014). Encouragement has also been given to some of the creative and innovative services which are basically focused at providing satisfaction to different market segments with some customized solutions to the issues.In the economy the concept of liberalization policy has been made focused at growing customer choice and encouraging greater effectiveness in the use of scarce resources.
One of the most effective and influencing factor for the business corporation is the economic situation of the economy (Solomon, 2014). Due to the emergence of the concept of Globalization which has jumped national boundaries, this has benefited and opened and has also enhanced the trade and business. Globalization has also come-up with numerous opportunities for the company. And this has made an increase in the use of the mobile phones, internet and other related equipment and services globally and there is an expectation of this trend to continue (Tanada. 2015). Moreover the company has got the opportunities for doing investments in the international markets for the enhancement and enlargement of the market and maintains profitability.It has been observed from the recent survey that the Singapore government has made investment for the diversification of the economy. This sector for suture will be into creation of fair and good business environment for providing support and motivation the human resource and also establishment of the legal and financial business framework will be made possible. It has also been estimated that there will be a growth in the economic sectors such as tourism sectors, financial expertise, consultant service and retail business (Koumparoulis, 2013). And this in-turn will be proven beneficial for SingTel for an enhancement in the business locally. Furthermore it has also been noticed that there is a close link or connection between the telecommunication services and the economic activities in Singapore and region. And hence it is must for the business corporation to have a good preparation so as to become capable for taking the optimal utilizations of effects such as the change of income and consumer spending habit.
On the basis of the analysis it has been observed that the culture of Singapore is very much distinctive and unique and which has been segmented in four major ethnic group’s .i.e. Chinese, Malays, Indians and Eurasians. These cultures have a strong belief in their customary values even though the newer generations has started the adaption of the western way of life. There has been a strong belief on the phase in the attitude of Singaporeans .i.e."kiasu" which means "scared of trailing to other". And due to this attitude, many of the young Singaporeans has been working very hard so as to have a high level of income and become capable for the adaption of new and latest technology (Chinaabout. 2017). A continuous change has been observed in their lifestyle, buying patterns and they are also demandingfor high standard and quality of products and services. And these factors will be bringing numerous opportunities for SingTel, such as an increase in the revenue graph and this can be attained by the business corporation by providing them with the innovative and tailored product and services.
There have been varied changes in the concepts of technology which has undergone many developments rapidly and continuously nowadays. The reasons for the investments in the developing new technologies for the products and services are the factors such as online telecommunications and the rising of telecommunication subscribers (Collins, 2010). According to the current survey, SingTel business operations have been covering telephone lines, e-commerce, Internet and mobile services. Identification has been done of the activities, which are very much significant for the growth with the consumer segments and the factors for the same are e-commerce and Internet-based activities. And hence the technological investments have become an vital part of business strategies for long-term growth. And also huge investments made by the business corporation in technology have been proven as the factor which made SingTel succeed in the past.
Legal action may have been taken against SingTel for their smear campaign. They will be charged for unethical marketing practices and defamation. Lawsuits from the side of customers are also there regarding poor services and network. Legal actions from the competitors have been also there regarding patents, trademarks and marketing activities. SingTel is also being accused for charging free applications. Applications such as Whatsapp and Skype are free to download, however they are charging for it. This will attract legal issues. On the other hand, several countries are considering for differentiated pricing policy. This policy may change the business scenario of SingTel.
SingTel promotes policy for sustainable development. They are committed to minimize the negative impact on the environment by preserving and protecting natural resources. They have a program of Environmental Management Systems (EMS) through which, they monitor their business activities and practices to determine the effectiveness of their environmental policy. On the other hand, SingTel have another program named, Health, Safety and Environment policy. Through this initiative, they provide safe and secure working environment for their employees. In addition, the consumers and other people visiting their offices will be provided suitable and proper ambience under this program. To reduce the impact on the environment, they are upgrading their base stations in to more environmental friendly ones. Their new stations will consume less than 50 percent than their old models. Their objective is to be identified as the most sustainable mobile operator in terms of environmental impact. SingTel also promotes various initiatives for water conservation. All offices of them are designed to conserve as much water as possible.
Porters 5 Forces
The below mentioned is the application of Porter's five forces model over the business environment of SingTel and which has helped in the determination of the issues or the problems which are associated with the business strategy and also the evaluation of the investment value of SingTel (Sgmusicwhiz. 2017). It has been observed that it has been suggested for SingTel to get aware about the key success factors which will be proven necessary to cope with the competitive forces. The following are the five forces for the business corporation:
On the basis of the survey a number of factors can be presented which are related and are the reason for the intensification of the rivalry in the industry. An increase in the number of competitors has been observed and due to which there has a decline in the growth of the industry and this has become the main reason in the strong industry rivalry (David, 2011). M1 has been considered as one of the main competitor for the business corporation, having huge resources and influential capability. SingTel have to look at other carefully to make a footstep among their rival entities. Moreover, the features and the characteristics of the products and services which requires and demands a high rate of investment and also low mobility of fixed costs and infrastructure. This is also one of the reason or the difficulty for the position of the business corporation in the sector of telecommunication.
Threat of new entrants
A license is mandatory to be issued by the Telecommunications Authority of Sing Singapore (TAS) and this is essentially to be done by every potential entrant into telecommunication industry. Moreover the security issues are highly prioritized and are also very much sensitive in the operational activities of the telecommunication services (Rothaermel, 2015). A proper and careful scanning is to be done by the Singapore government before the acceptance of the license. Moreover, the new competitor required Capital has been considered as the key factor and which the new entrant requires and by the help of the capital thenew entrants can measure the sufficiency of financial resource.
Threats of substitute products and services
There has been a decline observed in the significance of fixed line, which is slowly declining as a convenience method. There has been a rise in the threats of substitute for fixed traditional telecommunication systems, which has been done by replacing, and the substitute is VoIP (Voice over Internet Protocol), and online applications and this may be proven beneficial in the reduction of the communicational and infrastructural expenditure. However, the concept of traditional telecommunication systems has been widely used in almost every company, which also includes SingTel. On the other hand, this has proved convenience and efficiency of the concept by coming of provisional price and non-price options for traditional telecommunications systems under the new telecommunications access regime (Grant, 2016). In addition, competitive communications companies are making use of these services as inputs for providing voice, facsimile and broadband internet products to ultimate customers and other business corporations.
Bargaining powers of suppliers
It has been observed that, a sense of balance of control has been maintained between suppliers and telecommunication companies in the economy, and which indicates that the power of suppliers is moderate (Ruigrok& Van Tulder, 2013). Whereas the, suppliers are finding it difficult in competing directly with present customers and the reason for this is the geographically distinct networks and also the effort for making the long term agreement can pose challenge for the telecommunication sectors.
Bargaining power of customers
Buyers are very much capable in influencing the business corporation through their abilities of bringing down price forcefully, bargaining and demanding for the better value and more added services and indulge the rivalry against each other. Due to an increase in the competitors in the communication industry and lower switching cost, the bargaining authority of the customers is soaring for SingTel (Magretta, 2011). Also the customers have an option to go for the new-age telecommunication technologies over the traditional ones. StarHub and Mobile1 are the prominent names in the sector of telecommunication in Singapore which are the biggest competitors of SingTel, where the business corporation has to consider to their products and services. Numbers of alternatives are there for the consumers due to the presence of various standard and related products between SingTel and its competitors.
On the basis of the above carried out analysis it can be observed thatthe analysis of the external environment has been executed for SingTel which is a Tele-communication corporation. The below mentioned are the issues which have been come-up during the execution of the analysis:
- The biggest issues are the competitors and the increasing rate or the intensification of the competition (Porter &Heppelmann, 2014). SingTel has been facing a high competition from a number of business corporations.
- The customers have a good bargaining power and their demands are increasing day by day in the terms of the features and the characteristics of the products and the services. This can be issues as these factors affect the prices of the products and services.
- As the above-executed analysis has been made focus on PESTLE, which are the most significant factors and which are also capable of influencing the business environment. And hence SingTel should consider these factors while setting the business in other regions so as to attain success and growth in the sector.
- They should also look after their marketing strategies to stay ahead in the competition. Due to their charging free apps, they are trailing behind their competitors. These types of strategies may give benefits in the short-term. However, in the long run, it will pose a challenge for them.
- It has been observed that competition is the biggest issue and the problem for the business corporation and hence for tackling from the rivals SingTel should make use of the most updated mechanisms and procedures in the operating activities.
- Competition will be more in the telecommunication sector in the future and therefore, the marketing polices should be in such a way that it will meet the taste and preference pattern of the customers. Moreover, market expansion is also one of the key strategies that should be implemented by them. Market expansion will help them to increase their market share and revenue. In addition, their brand identity will be increase and the business risks will be more scattered in nature.
In the limelight of the above executed analysis it has been inferred that external analysis is one of the main factor which is very much significant for the business corporation. The above report has been made focus on SingTel which is a multinational brand name in the sector of telecommunication industry. PEST analysis has been carried out for the determination of the various factors of the business environment of the organization and further PORTERS’S five forces has been explained. It concludes that suitable and effective applications of all the discussed recommendations will help them to solidify their positions in their home market. Moreover, they will gain a foothold in the global market also.
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