Part B: Industry Analysis
There are five competitive forces model that determine an industry’s profitability. These five forces are entry barrier, threat of substitutes, rivalry among competitors, bargaining power of suppliers and buyers.
1. Entry Barrier
One of the barriers for competitor entry telecommunication industry is high capital investment. Companies in this industry required high fixed costs and spend relatively large on network equipment and maintain development. Besides, technologies required also have considered as barriers for companies entering the telecommunication. The types of technologies employed by DiGi include the GSM (Global System for Mobile communications: originally from Groupe Spécial Mobile) standard for its mobile network, operating in the 1800MHz frequency band. The advanced technology which required in the telecommunication industry incurred high capital investment and also needed professional knowledge in relevant sector to success in the industry. It was not easy copy or imitate by competitor. 2. Threat of Substitutes
There are many substitutes for mobile services such as a very traditional way- letter, fixed home line telephone, fax, and email. From the year of 2000 onwards, broadband Internet services, which enable faster and always-on connection to the worldwide web, offer more promising growth potential. In addition, the pressure on the very low cost to use the phone calling through internet or communicate through online messenger had threatened the mobile service industry. The attractiveness of internet services making it more affordable to the masses.
3. Rivalry among Competitors
Telecommunication industry in Malaysia is oligopoly structure nowadays. Digi have two main competitors, they are Maxis, Celcom. Maxis lead the telecommunication industry. They are largely compete on differentiate their product and services on how to improve their features and implementing innovation. Moreover, company in this...
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