Executive Summary:
This final project is presenting the strategic concepts that were learned throughout the class, and how they are applied in real life.
Etisalat is a world leading telecom group, existing for more than 40 years, in not only the Emirate leading telecom company but also one of the top 500 corporation worldwide, as mentioned the financial times. With a presence in 15 countries, Etisalat also has points of presence in countries in Europe, USA and Asia.
This paper will firstly start with a description and history of the company, Etisalat, its formation, management and ownership, as well as its vision and value. It will then move to portray its current strategies and operations, the products and markets served, and the locations it exists. Furthermore, the analysis of this world leading telecom group will be divided into internal and external factors, and an analysis of its competitors, and other strategies and recommendations will be presented.
For the external assessment, it comprises the Porter’s Five forces, SWOT analysis, and the TOWS analysis, from which recommendations will be driven and the value chain.
On the other hand, the internal analysis comprises the financial analysis, PESTEL analysis, Porter’s value chain, stakeholder analysis, stakeholder’s analysis, VRIO and the RCC.
On the final part, issues and challenges of the company will be presented as well as some recommendations and new strategies.
INTRODUCTION:
COMPANY PROFILE:
Etisalat, or Emirates Telecommunication Group Company PJSC, was founded in 1976, in a joint stock, between local partners and a British company, International Aeradio Limited. The United Arab Emirates then acquired 60% of the ownership which changed the structure of the company, and the remaining 40% was traded to the public. From 1976 to 1998, the progressions of the corporation’s network expanded the trade line in UAE from 36,000 to 737,000. (Etisalat, 2019)
In January 2001, Etisalat witnessed an evident growth, when it spread its operation into the global market. And by 2011, it was ranked 140th worldwide and was considered, besides the oil sector, one of the main sources of growth in the UAE. (Etisalat, 2019)
Etisalat has a major presence in Saudi Arabia and Egypt, where it procured further markets thanks to the introduction of the services of the broadband, mobile television and internet access, that resulted on huge market dynamics. (Etisalat, 2019)
INDUSTRY PROFILE:
The telecommunication industry had been improving and evolving through the centuries, starting with basic communications means like drums smoke signals in the USA, Africa and Asia. Emerging in Europe, the first semaphore systems were first established during 1790s, and the first electrical telecommunication systems saw the day in the 1830s. In 1876, the telephone was invented by Alexander Graham. In the 1990s, the internet emerged. (Mitel, 2018)
The telecommunication industry, includes mobile and fixed-network services, has reached a value of $1.4 trillion in 2017, and is expected to grow and to about $1.46 trillion by 2020. (A. Host, 2019)
The table below shows the IT spending on telecommunications services worldwide from 2008 to 2021.
FIGURE 1: TELECOM SERVICES: GLOBAL SPENDING FORECAST 2008-2021
VISION AND VALUES:
VISION:
“Drive the Digital Future to Empower Societies”. (Etisalat, 2019)
Etisalat’s vision is to empower societies by driving the digital future, and by being an inspiration to everyone for them to realize their true potentials. (Etisalat, 2019)
The digital future is about fast-tracking the economic growth of the businesses, reshaping and easing the lives of their clients, and improving the competitive market of the country. (Etisalat, 2019)
VALUES:
Etisalat has four core values: empowerment, agility, collaboration and customer centricity.
The empowerment encompasses the way that people at all level get to be motivated, take ownership and act in a proper way in order for them to accomplish the group, organizational and team objectives. Agility in Etisalat context is about being able to have a quick response, and this by working in and adapting to diverse situations that come with a variety of groups and individuals. Moving to collaboration, it is the way of adapting and recognizing the different styles and ways to work that would realize shared and common goals as well as working in a cooperative through unit boundaries and organizational level. Finally, the customer centricity the ability and of course the willingness to provide the priority to the customers, offering services that with quality that match Etisalat’s notoriety and delivering the best customer service. (Etisalat, 2019)
CURRENT BUSINESS AND OPERATIONS:
CURRENT STRATEGY:
Following its vision that guides Etisalat Group to transition from its traditional aspect, and to work towards goals that aim to reshape its customers’ lives, improve the competitiveness, and fast-track the economic growth, the telecom operator introduced a strategy that would allow it to get aligned with its strategic direction called “TARGET”. This strategy is implemented to allow Etisalat to gain from the growth opportunities. The framework followed by “TAREGT” is:
T: To drive the digital future to empower societies.
A: Accelerate value generation through innovation and digitization.
R: Raise capabilities and develop talent across the Group.
G: Grow B2B/digital across the footprint.
E: Expand portfolio in MENA and knowledge economies.
T: Transform operating companies into strongholds. (Etisalat, 2019)
This strategy was initiated to respond to the market environment and the macro-economic across the footprint of Etisalat that keeps evolving, and it resulted in coming with the “TAREGT” strategy. (Etisalat, 2019)
SERVICES, PRODUCTS AND MARKET DESCRIPTION:
The UAE is as of now overhauled by two major telecommunications organizations: Etisalat and Du. Etisalat was monopolizing the telecommunication market until Du started in February 2007 its mobile services. Yet, with over 80% of the market share, Etisalat remains stills UAE’s driving telecom provider.
Etisalat is growing impressively globally, and it is right now the sixteenth biggest telecom organization worldwide. By 2010, Du becomes a fierce competitor and claims 30% of the industry. As of 2002, the cell phones’ number of subscribers skyrocketed in the nation and expanded broadly by of 25.6% every year. The mobile market in the UAE is continuously expanding, and new telecom items showed up, like initially Blackberry, coming with many categories of internet connections and other services. The market of media communications is solid in this nation since there is solid inclination towards its administrations and items. Telecoms administrations are significant and required in the UAE. (Etisalat, 2019)
Finally, the crucial growth of the industry globally created more competition and need for advanced and high-speed products and services.
LOCATIONS:
Etisalat Group, headquartering in Abu Dhabi, exists in fourteen different countries besides the UAE. It has representative offices located in New York, London, Paris, Frankfurt, Singapore and Amsterdam. (Dubaifreezone, 2017)
Etisalat is present with different operators labels in the UAE as Etisalat, Saudi Arabia as Mobility, Morocco as Maroc Telecom, Pakistan as ptcl, Egypt as Etisalat Misr, Afghanistan as Etisalat Afghanistan, Mauritania as Mauritel, Mali, as Sotelma, Côte d’Ivoire, Central African Republic, Gabon, Togo, Benin and Niger as Mooy, and finally Burkina Faso as ONATEL. (Etisalat, 2019)
EXTERNAL ASSESSMENT:
The external analysis will tackle the PESTEL analysis, SWOT’s opportunities and threats and TOWS analysis, Porter’s Five Forces and the chain value.
PESTEL ANALYSIS:
PESTEL Analysis explains how the macro-environmental factors affect and impact on the performance of the company. Below is the framework compost of this external analysis:
POLITICAL FACTORS:
The United Arab Emirates is composed of seven Emirates, all free. They are rules under the Sheikhs administration. The leaders are part of and rule from the Supreme Council, that is from where national approaches are made. The capital is Abu Dhabi and it is the pioneer Emirate. The UAE has a political framework that enables it join the traditional and the progressive structures that have been empowering this nation to reach a level of political stability, which would enable a Etisalat’s sound expansion. (Camillus, Bidanda and Mohan 2017).
ECONOMIC FACTORS:
The primary source of UAE’s economic growth is found in the oil and gas which is industrialized in the country. In the last few years, the nation’s economy has seen a massive growth despite the economic crisis encountered in the years of 2008 and 2009. Due to the ventures and investments made in different sectors such as retail, power and base divisions, the country keeps on developing. More than that, the oil industry proceeds are considered a major help in the progress of the development activities. Thereby, opportunities for a success in the telecom industry is persistent. (Cosenz and Noto, 2016)
SOCIAL FACTORS:
Internationals are considered 85% in the UAE, with residents and locals coming from different backgrounds and ages. The country is Muslim and thus the religions followed is mainly Islam, with also Christian people and Hindus. The spoken languages include English, Arabic, Persian, Urdu and Hindi. The incomes in UAE are considered fairly high which enables offered.
TECHNOLOGICAL FACTORS:
In UAE, the industry of telecommunication has always been on rise, and due to the successful telecommunications, the nation was competent in proving itself. The group includes two main partners and telecommunication organizations, EITC (Emirates Integrated Telecommunications Company) and Etisalat to which the industry is independent. In UAE, besides the telecom industry, the e-commerce one is as well successful with the support of the government. (Daspit and al. 2017)
ENVIRONMENTAL FACTORS:
Despite the very dry climatic conditions that UAE experiments, a blend is created from the help of the government support backing up the basic land conditions. The country’s location, making it fall within dry regions makes it subject to various climates, where downpours are very low. These environmental factors should be considered by Etisalat to create a sustained strategy.
LEGAL FACTORS:
As mentioned is the political factors section, the Supreme Council’s members rule the nations. More than that, the governmental structure is one that integrates The Council of Ministers, the parliament body and the Supreme Council. These governmental bodies help implement the federal law to the many organizations in the UAE. The immigration laws are very strict, and everyone who comes into the country has to follow them by the letter. As for the financial policies and laws, the Central Bank of UAE works alongside the members to develop them, who is also helps with the micro-economic related laws. Hence, the businesses are operating in an environment that is free to encourage new entrepreneurs. These implemented regulations and laws can eventually affect Etisalat’s policies either positively or negatively. (Durand, Grant and Madsen 2017).
SWOT ANALYSIS:
The SWOT analysis refers to the strengths, weaknesses, opportunities and threats of the company. The strengths and weaknesses are the internal factors, and show the company’s performance, and the opportunities and threats are the external factors, and show the outside factors that the company faces.
FIGURE 2: ETISALAT SWOT MATRIX
TOWS ANALYSIS:
On the other hand, TOWS analysis divides the external and internal factors, in order to gather them back in a more detailed analysis. When SWOT is only showing the favorable and unfavorable conditions, TOWS comes to drive strategies from them.
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