WE Telecom Egypt’s Internal and competitive Environment
WE Telecom Egypt
WE Telecom Egypt is the leading mobile network company in Egypt. It operates under a mobile network infrastructure branded as WE. The history of the company dates back to 1854 when it deployed its first telegraph line (WE Telecom Egypt, 2020). Telecom Egypt became a fully registered mobile operator on August 31, 2016, after it agreed to pay €713.14 million for licensing of the 4G network (WE Telecom Egypt, 2020). However, the WE mobile network was launched in 2017 after following the acquisition of the LTE 4G network in 2016 (WE Telecom Egypt, 2020). This essay analyzes the company’s internal environment as well as its competitive environment.
Analysis of WE Telecom Egypt’s Internal Environment
The SWOT tool is used to analyze the company’s internal and external environment by analyzing its strength, weaknesses, opportunities, and threats (Gürel & Tat, 2017). However, this discussion is only limited to analyzing the strengths and weaknesses of WE Telecom Egypt since they are the factors that compromise the internal environment.
Strengths
The company has a strong brand name and has presences in almost all regions in the country; thus, it has a high geographical reach. Egypt is an emerging economy with over 80 million population. This has presented a good market ground for the telecom company. Moreover, the young demographic has ensured better adoption for the latest technology, which is a value-added service to the company.
Secondly, it offers a diversified product and services portfolio. It supports voice services, broadband internet, and IPTV services. This is given it a competitive edge over its rivals. Moreover, the diversified revenue base has helped in offsetting its weaknesses.
Its customer services are excellent. This has made it create a strong rapport with customers. The customer support team is accessible 24/7. Moreover, it has a strong online presence on almost all social networking sites.
Weaknesses
Similar to other African countries, most of the customers are subscribers of prepaid services. Markedly, this is amid the rising cost of living, which has led to social-economic dissatisfaction. Secondly, internet usage is relatively low, especially when compared to mature markets in developed countries. Also, the company has adopted a competitive pricing strategy, which has led to many subscribers to join other mobile operating networks. Don't use plagiarised sources.Get your custom essay just from $11/page
Analysis of the Competitive Environment using Porter’s Five Forces Model
Porter’s five forces is a model that was proposed by Michael E. Porter in 1979 (Porter, 2008). The framework has five competitive forces that can be used to analyze the competitive positioning and strengths of an organization (Porter, 2008). Figure 1. Below shows the pictorial representation of the five forces.
Figure 1. Porter’s Five Forces Model. (Source: The five competitive forces that shape strategy, 2008)
The Threat of New Entrants-low
The threat of new entrants in the telecom industry is relatively low. This is because it requires an investment of substantial capital and resources to venture in Egypt’s telecom industry. Secondly, the brand has already established a loyal customer base, and hence the psychological switching of customers is high. Thus, the threat of new entrants is relatively low.
The Threat of Substitute Products or services- high
The threat of substitute products and services is relatively high. This is because there are other companies that operate within the same industry that offers similar services to the one provided by Telecom Egypt, including Westel Inc, TOT Corporation and GVT.
Bargaining Power of Suppliers-low
The bargaining power of suppliers is low since they have less control over the prices. Further, the products supplied are less differentiated and fairly standardized. Also, it is notable that the cost associated with switching from one supplier to another is relatively low. All these reasons make it easier for Telecom Egypt to switch from one supplier to another. This makes suppliers’ bargaining power a weaker force.
Bargaining Power of Buyers-Low
The bargaining power of buyers is low since the number of companies offering telecommunication services is few. This means that the buyers have few options to choose from, and hence do not have much control over the prices.
The threat of Rival Firms-high
There are few firms operating in the same industry as WE Telecom Egypt. However, despite this fact, they have a significant market share. This means that they engage in competitive actions. Therefore, the threat of rival firms is high.
Finally, based on the competitive and internal environment analysis, WE Telecom Egypt can leverage Ansoff’s product strategy matrix of producing more innovative products for the same market segment. The e-payment system is a good example of an opportunity that is untapped and that it can leverage. This will mean incorporating digital payment system in their mobile network infrastructure.
References
Gürel, E., & Tat, M. (2017). SWOT analysis: a theoretical review. Journal of International Social Research, 10(51).
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40.
WE (Telecom Egypt). (2020). Retrieved from https://halberdbastion.com/intelligence/mobile-networks/we-telecom-egypt