1. How would you characterize the competitive intensity and attractiveness of the telecom industry in Eurasia by using Porter’s Five Force?
Intensity of Competitive Rivalry: At present, TeliaSonera is the leading telecom company and biggest investor in Eurasia having great and huge market share of telecom industry in the country. Therefore, the intensity of competitive rivalry will only occur in Eurasia telecom industry when the world competitors come forward to lead in this emerging and developing industry of Eurasia. This country holds a potential market for the industry of telecom for which it will lead to high level of competition only between the already existing few competitors.
Threat of New Entrants: The Eurasian telecommunication industry provides great barriers to the new entrants as there are strict policies and regulations by Eurasian government. The political presence of the country is quite risky and even the industrial institutions are having ambiguous settings leading to high cost of investments. TeliaSonera has been able to expand successfully because of its good and strong government and business ties in Eurasia. Thus, every new entrant will have to hold these ties. Eurasian markets very well welcome the foreign direct investments (FDI) in the form of their main economic development. But, for this the new entrant has to hold of strong capital requirement to get high ability to compete the telecommunication industry of Eurasia. This is essential because TeliaSonera holds the highest market share in almost all the Eurasia regions.
Bargaining power of Suppliers: The Company’s suppliers become powerful and dominating only when the product manufactured by the suppliers is quite differentiated or the products have been manufactured with switching cost. On occasional needs the power of suppliers may increase in Eurasian telecom industry when the industrial buyers need to invested in replacing the old satellite dishes, copper cable or fiber optic cables and other networking leads. With high competitive environment in Eurasia, the companies need to invest in the modernized technologies.
Bargaining power of Buyer: The buyers in telecom industry in Eurasia hold power only when they hold the ability to force down the prices, can play off with competitors and can demand higher quality. The population of Eurasia is quite young that results in high demands of high speed mobile networks and broadband services and after sale services. Consumers need high technology and high quality networks at affordable price so the buyers do hold the strong bargaining power. This power becomes strong also because of the competition between the service providers who already exist in the industry.
Threat of Substitute Products: The substitute products and services become good alternatives or choices for the consumers. As the growth of the telecom industry is high in Eurasia, the substitute products and services do play their role. It has been found that buyers of Eurasia is demanding for quality broadband services and networks so the new entrants will get the opportunity of providing substitute product to the buyers on lower rates and may be with better performance as compared to the already existing companies.
2. Many multinational companies fail in their expansion in emerging economies. What are the main capabilities and resources that drive TeliaSonera’ successful growth in Eurasian markets?
TeliaSonera has been able to get successful growth in the Eurasian markets as it identified its well defined strategy having tripod views that are industry based views, institution based views and resource based views. TeliaSonera led itself to success and profitable expansion in the emerging economy and market of telecom industry in Eurasia with 3 main things.
Industry based- As the Eurasian countries hold great and opportunistic market conditions for all sorts of technology related companies, TeliaSonera enhanced its better understanding in this context which supported its expansion plan. This company was well known about the fact that Eurasian market has less developed fixed networks and relies heavily on the mobile networks. They know that this market is young, and there are very few competitors and also welcome FDIs for economic stability and growth. TeliaSonera invested its money in the emerging economy and is on line of becoming top rated Telecom Company in Eurasia. TeliaSonera received huge sales opportunities too with this business strategy.
Institution based- There were challenges for TeliaSonera as it has weak institutional settings in Eurasia’s Soviet Union nations. But, TeliaSonera connected well with the government and also kept its global brand name on right position. Eurasian telecom industry holds strong liabilities regarding the related fix costs and infrastructure spending. For this, company’s wise choice was to build up highly strong relationship with Eurasian government in its well known expansion strategy such as creating jobs for local people, providing great employment opportunities and developing a good transmission system.
Resource based- The Company leveraged its telecom expertise of its decade’s times in the Nordic nations in the emerging and developing nations of the Eurasian regions. TeliaSonera hold unique resources in the form of its deep customer understanding and technical advancements. These resources helped the company to have strong operations even in the complex areas to become smooth and less problematic. This company has used its resources particularly in the regional infrastructure investments providing high quality and technical networks. This became a leading edge of the company as compared to the other local service providers (competitors). It definitely resulted in high cost investment but provided strong and satisfied customer base. With technology expertise, TeliaSonera achieved good government relations.
Overall, TeliaSonera leveraged its abilities and resources and set up a target to become the number one player in the Eurasian telecom industry. The three elements of the company’s expansion plan have made successful growth in a smooth way. It is an in-depth and strategized mind set of the company that has been helpful in its growth in all ways.
3. Given the institutional differences between European and Eurasia market, what are the main challenges faced by TeliaSonera in its international expansion strategy? Which strategies enable TeliaSonera to minimize the risk of these challenges?
While expanding itself on international level in Eurasia, TeliaSonera built a strong international expansion strategy due to the point of facing several challenges of the attractive and emerging market. The main challenges faced by TeliaSonera are its weak institutional settings in Eurasia’s Soviet Union nations; the legal, regulatory, and economic systems of Eurasia are still risky and bureaucratic; and ambiguous institutional frameworks lead to extra business risks and significantly high investment costs.
To overcome these challenges and to minimize the risks of this business, TeliaSonera focused on the strategy of building of alliances and acquisitions in Eurasia with the local companies in telecom industry and making profitable investments. This was the key strategy of this company. This resulted in enviable company performance and made it reach the number or two positions in the industry of Eurasia. TeliaSonera had its operations in Eurasia with an aim towards setting a trend in its own way in the low penetration and highly dynamic markets. For an instance, the company’s alliance with the local Eurasian player “Kcell” (TeliaSonera having 51% share) resulted in making it the shareholder of the first company that launched the GPRS technologies helping the people of Kazakhstan to get hold of the easy and accessible MMS, WAP and mobile internet services. This way TeliaSonera was able to own a reputed company support in the whole nation. This also provided TeliaSonera with reputed and strong customer based as Kcell has 8% of its revenue from the promising customer base. Another instance is TeliaSonera’s acquisition with the Nepalese youth brand MeroMobile or Ncell for creating hundreds of new local jobs and employment opportunities, thus, TeliaSonera gave full efforts in becoming a trendsetter into the low penetration markets like Eurasia that are quite different from European mature markets.
4. How does TeliaSonera differentiate itself from its competitors in Eurasian market?
As TeliaSonera was to operate in a wide geographic and emerging area, the company came up with the idea of using new branding strategy for recognizing its different functions under just one single brand image. The company started using one single brand image for its 18 brands from all over Nordics toward Nepal since 2009. This strategy was implemented to show its customers the true message of unity under its multinational and strong brand. But, the local brand names were not changed at all.
It has been stated by TeliaSonera that it has two strengths that is leading and local. This is because it has been one of the leading operators of Europe having international reach and strength. Simultaneously it has powerful local brands with which it reaches all the markets. This is the reason that the company kept the local brands as it is and added a unifying visual symbol of its brand. This helped in differentiating TeliaSonera from its competitors in Eurasian markets. The best part of the new branding strategy was that it was reliable and valid. Because, it was initially tested in almost all the operating Eurasian markets like in Azerbaijan as Azercell, Uzbekistan as Ucell, Kazakhstan as Kcell, Moldova as Moldcell, Tajikistan as Tcell, Nepal as Ncell and Georgia as Geocell.
Conclusively, it is quite clear that TeliaSonera has united all its leading and local brands under one roof systematically that helped it to save its
1. How would you characterize the competitive intensity and attractiveness of the telecom industry in Eurasia by using Porter’s Five Force?
Intensity of Competitive Rivalry: At present, TeliaSonera is the leading telecom company and biggest investor in Eurasia having great and huge market share of telecom industry in the country. Therefore, the intensity of competitive rivalry will only occur in Eurasia telecom industry when the world competitors come forward to lead in this emerging and developing industry of Eurasia. This country holds a potential market for the industry of telecom for which it will lead to high level of competition only between the already existing few competitors.
Threat of New Entrants: The Eurasian telecommunication industry provides great barriers to the new entrants as there are strict policies and regulations by Eurasian government. The political presence of the country is quite risky and even the industrial institutions are having ambiguous settings leading to high cost of investments. TeliaSonera has been able to expand successfully because of its good and strong government and business ties in Eurasia. Thus, every new entrant will have to hold these ties. Eurasian markets very well welcome the foreign direct investments (FDI) in the form of their main economic development. But, for this the new entrant has to hold of strong capital requirement to get high ability to compete the telecommunication industry of Eurasia. This is essential because TeliaSonera holds the highest market share in almost all the Eurasia regions.
Bargaining power of Suppliers: The Company’s suppliers become powerful and dominating only when the product manufactured by the suppliers is quite differentiated or the products have been manufactured with switching cost. On occasional needs the power of suppliers may increase in Eurasian telecom industry when the industrial buyers need to invested in replacing the old satellite dishes, copper cable or fiber optic cables and other networking leads. With high competitive environment in Eurasia, the companies need to invest in the modernized technologies.
Bargaining power of Buyer: The buyers in telecom industry in Eurasia hold power only when they hold the ability to force down the prices, can play off with competitors and can demand higher quality. The population of Eurasia is quite young that results in high demands of high speed mobile networks and broadband services and after sale services. Consumers need high technology and high quality networks at affordable price so the buyers do hold the strong bargaining power. This power becomes strong also because of the competition between the service providers who already exist in the industry.
Threat of Substitute Products: The substitute products and services become good alternatives or choices for the consumers. As the growth of the telecom industry is high in Eurasia, the substitute products and services do play their role. It has been found that buyers of Eurasia is demanding for quality broadband services and networks so the new entrants will get the opportunity of providing substitute product to the buyers on lower rates and may be with better performance as compared to the already existing companies.
2. Many multinational companies fail in their expansion in emerging economies. What are the main capabilities and resources that drive TeliaSonera’ successful growth in Eurasian markets?
TeliaSonera has been able to get successful growth in the Eurasian markets as it identified its well defined strategy having tripod views that are industry based views, institution based views and resource based views. TeliaSonera led itself to success and profitable expansion in the emerging economy and market of telecom industry in Eurasia with 3 main things.
Industry based- As the Eurasian countries hold great and opportunistic market conditions for all sorts of technology related companies, TeliaSonera enhanced its better understanding in this context which supported its expansion plan. This company was well known about the fact that Eurasian market has less developed fixed networks and relies heavily on the mobile networks. They know that this market is young, and there are very few competitors and also welcome FDIs for economic stability and growth. TeliaSonera invested its money in the emerging economy and is on line of becoming top rated Telecom Company in Eurasia. TeliaSonera received huge sales opportunities too with this business strategy.
Institution based- There were challenges for TeliaSonera as it has weak institutional settings in Eurasia’s Soviet Union nations. But, TeliaSonera connected well with the government and also kept its global brand name on right position. Eurasian telecom industry holds strong liabilities regarding the related fix costs and infrastructure spending. For this, company’s wise choice was to build up highly strong relationship with Eurasian government in its well known expansion strategy such as creating jobs for local people, providing great employment opportunities and developing a good transmission system.
Resource based- The Company leveraged its telecom expertise of its decade’s times in the Nordic nations in the emerging and developing nations of the Eurasian regions. TeliaSonera hold unique resources in the form of its deep customer understanding and technical advancements. These resources helped the company to have strong operations even in the complex areas to become smooth and less problematic. This company has used its resources particularly in the regional infrastructure investments providing high quality and technical networks. This became a leading edge of the company as compared to the other local service providers (competitors). It definitely resulted in high cost investment but provided strong and satisfied customer base. With technology expertise, TeliaSonera achieved good government relations.
Overall, TeliaSonera leveraged its abilities and resources and set up a target to become the number one player in the Eurasian telecom industry. The three elements of the company’s expansion plan have made successful growth in a smooth way. It is an in-depth and strategized mind set of the company that has been helpful in its growth in all ways.
3. Given the institutional differences between European and Eurasia market, what are the main challenges faced by TeliaSonera in its international expansion strategy? Which strategies enable TeliaSonera to minimize the risk of these challenges?
While expanding itself on international level in Eurasia, TeliaSonera built a strong international expansion strategy due to the point of facing several challenges of the attractive and emerging market. The main challenges faced by TeliaSonera are its weak institutional settings in Eurasia’s Soviet Union nations; the legal, regulatory, and economic systems of Eurasia are still risky and bureaucratic; and ambiguous institutional frameworks lead to extra business risks and significantly high investment costs.
To overcome these challenges and to minimize the risks of this business, TeliaSonera focused on the strategy of building of alliances and acquisitions in Eurasia with the local companies in telecom industry and making profitable investments. This was the key strategy of this company. This resulted in enviable company performance and made it reach the number or two positions in the industry of Eurasia. TeliaSonera had its operations in Eurasia with an aim towards setting a trend in its own way in the low penetration and highly dynamic markets. For an instance, the company’s alliance with the local Eurasian player “Kcell” (TeliaSonera having 51% share) resulted in making it the shareholder of the first company that launched the GPRS technologies helping the people of Kazakhstan to get hold of the easy and accessible MMS, WAP and mobile internet services. This way TeliaSonera was able to own a reputed company support in the whole nation. This also provided TeliaSonera with reputed and strong customer based as Kcell has 8% of its revenue from the promising customer base. Another instance is TeliaSonera’s acquisition with the Nepalese youth brand MeroMobile or Ncell for creating hundreds of new local jobs and employment opportunities, thus, TeliaSonera gave full efforts in becoming a trendsetter into the low penetration markets like Eurasia that are quite different from European mature markets.
4. How does TeliaSonera differentiate itself from its competitors in Eurasian market?
As TeliaSonera was to operate in a wide geographic and emerging area, the company came up with the idea of using new branding strategy for recognizing its different functions under just one single brand image. The company started using one single brand image for its 18 brands from all over Nordics toward Nepal since 2009. This strategy was implemented to show its customers the true message of unity under its multinational and strong brand. But, the local brand names were not changed at all.
It has been stated by TeliaSonera that it has two strengths that is leading and local. This is because it has been one of the leading operators of Europe having international reach and strength. Simultaneously it has powerful local brands with which it reaches all the markets. This is the reason that the company kept the local brands as it is and added a unifying visual symbol of its brand. This helped in differentiating TeliaSonera from its competitors in Eurasian markets. The best part of the new branding strategy was that it was reliable and valid. Because, it was initially tested in almost all the operating Eurasian markets like in Azerbaijan as Azercell, Uzbekistan as Ucell, Kazakhstan as Kcell, Moldova as Moldcell, Tajikistan as Tcell, Nepal as Ncell and Georgia as Geocell.
Conclusively, it is quite clear that TeliaSonera has united all its leading and local brands under one roof systematically that helped it to save its
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