Assess The Attractiveness Of The Telecommunications Industry In 1998 Case Analysis
“Assess the attractiveness of the Telecommunications industry in 1998”
In order to assess the levels of attractiveness of the telecommunications industry in 1998, it is essential to use Michael E. Porter’s Five Forces Framework. This particular framework allows to detail and assess how enticing the industry was, by considering these five forces:
• Threat of new entrants
• Threat of substitutes
• Power of suppliers
• Power of buyers
• Intensity of rivalry
Before the deregulation of the Irish telecommunications market in December 1998, there was an extremely low threat of new entrants. It was all due to the duopoly which was existent at that time. The duopoly consisted of Eircell (which was later bought by Vodafone in 2001) and Esat Digifone …show more content…
Due to the Irish telecommunications industry still being in the stage of growth, and the structure of supply was somewhat like diluted manufacturing market. Hardware companies, such as Sony Ericsson, Nokia or Samsung supplied mobile phones to the dense duopoly market of Esat Digifone and Eircell. It would seem that such market structure left the suppliers with very little or no bargaining power, but both, Eircell and Digifone were very dependent on suppliers, as they provided the latest products, and the mobile phones had greater influence on the demand than the mobile phone operators . This allowed Meteor to penetrate the market by targeting the youth segment by offering mobile phones that would appear attractive to them. These phones included phones with MP3 access and cameras. Such differentiation of products allowed them to prevail in this …show more content…
One would think that this would result with extreme defensive strategies in order to retain customers and make the brand easily identifiable, especially when Meteor entered the market in 1998. This however, was not entirely the case. The 11% market penetration rate has annulled this defensive approach. Another reason which annulled this was that this 11% in such fast-growing industry did not call for any major expansions, and the firms did their best in order to obtain and retain their customers. Due to these reasons, Meteor’s chances to become an important player in the industry were extremely low. It was also difficult to assume whether it would be successful at all, since it was the new, unknown and untested entity on the market, especially as the already-existent competition had a wide consumer base and high capital infrastructure. However, the strategies of the existent firms did not encourage vast expansion, nor did they vary much from one another, thus allowing for a slightly weakened competition
In order to assess the levels of attractiveness of the telecommunications industry in 1998, it is essential to use Michael E. Porter’s Five Forces Framework. This particular framework allows to detail and assess how enticing the industry was, by considering these five forces:
• Threat of new entrants
• Threat of substitutes
• Power of suppliers
• Power of buyers
• Intensity of rivalry
Before the deregulation of the Irish telecommunications market in December 1998, there was an extremely low threat of new entrants. It was all due to the duopoly which was existent at that time. The duopoly consisted of Eircell (which was later bought by Vodafone in 2001) and Esat Digifone …show more content…
Due to the Irish telecommunications industry still being in the stage of growth, and the structure of supply was somewhat like diluted manufacturing market. Hardware companies, such as Sony Ericsson, Nokia or Samsung supplied mobile phones to the dense duopoly market of Esat Digifone and Eircell. It would seem that such market structure left the suppliers with very little or no bargaining power, but both, Eircell and Digifone were very dependent on suppliers, as they provided the latest products, and the mobile phones had greater influence on the demand than the mobile phone operators . This allowed Meteor to penetrate the market by targeting the youth segment by offering mobile phones that would appear attractive to them. These phones included phones with MP3 access and cameras. Such differentiation of products allowed them to prevail in this …show more content…
One would think that this would result with extreme defensive strategies in order to retain customers and make the brand easily identifiable, especially when Meteor entered the market in 1998. This however, was not entirely the case. The 11% market penetration rate has annulled this defensive approach. Another reason which annulled this was that this 11% in such fast-growing industry did not call for any major expansions, and the firms did their best in order to obtain and retain their customers. Due to these reasons, Meteor’s chances to become an important player in the industry were extremely low. It was also difficult to assume whether it would be successful at all, since it was the new, unknown and untested entity on the market, especially as the already-existent competition had a wide consumer base and high capital infrastructure. However, the strategies of the existent firms did not encourage vast expansion, nor did they vary much from one another, thus allowing for a slightly weakened competition