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Strategic Management Analysis of Etisalat

Question:

Discuss about the Strategic Management Analysis of Etisalat.

Answer:

Introduction

The report will be based on the analysis of the strategic environment in which an organization operates in an effective manner. The organization that is taken into consideration for this analysis is Etisalat which has its operations in United Arab Emirates. The corporate social responsibility based activities of the organization will also analysed in the report in detail. The organization is thereby analysed based on various factors which include, the target market and the critical success factors in the industry. The chosen product of the organization named Etisalat will also be analysed in the report.

Political factors – The United Arab Emirates consists of the seven free Emirates. The seven Emirates are under the administration of the sheikhs. The rulers are members of the Supreme Council which is responsible for making the national approach. The Emirates are rules by the pioneer who the ruler of the greatest Emirate Abu Dhabi. The political framework of UAE has the ability to unite both the cutting edge and customary structures which have empowered the nation so that it is able to keep up the political soundness. The political factors of UAE can be rated at 3 from the scale of “-4 to +4” (Camillus, Bidanda and Mohan 2017). Etisalat can thereby expand the operations in this politically stable situation.

Economic factors – The economy of UAE is mainly based on the assets based on gas and oil that is manufactured in the country. The economy of the country has expanded in the last few years in spite of the political turmoil that has been faced in the year 2008 and 2009. The development of the country is based on the several monetary ventures that have been made based on different departments including, power, retail, base divisions. The country will be able to proceed with the development based activities with the help of the huge oil based industry. The rating that can be provided to the economic factors of UAE from the scale of “-4 to +4” is 3 (Cosenz and Noto 2016). The telecommunications industry of the country is thereby a booming area for the successful operations of Etisalat.

Social factors – The social factors of the country are based on people belonging to different age groups. The religions that are followed by the people of UAE are mainly Muslims and some Christian and Hindus as well. The languages that are spoken in the country include, Persian, Arabic, Hindi, Urdu and English. The income levels of the customers of the country are quite high. The rating which is provided to the social factors of UAE from the scale of “-4 to +4” is 3. Etisalat is a type of organization which provide services and is preferred by the customers who belong to all sections of the society.

Technological factors – The telecom industry in UAE is highly developed in nature and the country has been able to stand out with the help of effective telecommunications. The two major telecommunications partners of the company include, Etisalat and Emirates Integrated Telecommunications Company (EITC). The telecom industry is highly dependent on the two partner organizations. The ecommerce industry of UAE is also highly influential in nature. The government has also provided huge support to the ecommerce based operations of the different organizations. The rating which can be provided to the technological factors of UAE on the scale of “-4 to +4” is 4 (Daspit et al. 2017).

Environmental factors – The climatic condition of UAE mainly appreciates the blend that is created with the help of primary land based conditions. The falls of UAE in the various dry regions are subjected to the different local climatic conditions. The nation has been experiencing low downpours for the last few years which has made the area quite dry in nature. The rating that can be provided to the environmental factors of the country on the scale of “-4 to +4” is 2. The environmental conditions of the country need to be taken care by the operations of Etisalat so that it is remain in the industry in a sustainable manner.

Legal factors – The elected arrangement of the government is known to incorporate Supreme Council, the parliament body and the Council of Ministers. The federal laws are thereby implemented with the help of these government bodies for different organizations operating in this country. The immigration based laws of the country are also quite stubborn in nature and they need to be followed by the people who enter the country. The financial laws and policies are developed with the help of the Reserve Bank. The Central Bank of UAE is mainly responsible for the cash based laws of the country (Durand, Grant and Madsen 2017). The economic laws of the country are able to provide the organizations with a free environment to conduct their business operations in an effective manner. The rating that can be provided to the legal factors of UAE in this case within the scale of “-4 to +4” is 4. The laws and regulations that have been implemented by the government can thereby affect the policies that have been developed by Etisalat over the years.

The total score based on the positive and negative scale that is provided to the different factors of the PESTEL factors is 19. The PESTEL based factors of UAE have been provided thus score with the help of the analysis of the external environment. The decision rule based score of these factors is 19/24 which is approximately, 0.79 which greater than the basic score 0.45. The environment of UAE is thereby favourable for the successful operations of the organization named Etisalat (Dyer et al. 2015).

About the organization

Etisalat is the trade name for the organization named Emirates Telecommunication Group Company. This is an Emirati based multinational organization which operates in the telecommunication industry of Middle East. The organization has been able to acquire the position of the 14th largest operator of mobile network in the entire world. The company has been named as one of the most powerful organization in UAE. Etisalat reported a consolidated revenue of AED 5.17 billion. The organization is considered to be a significant organization among the two major telecommunication organizations in the country. This company is also the greatest carrier of the international voice based traffic in Middle East. The internet connectivity that has been provided by the organization to the customers of the country is an important part of the operations of Etisalat in the country (Ethiraj, Gambardella and Helfat 2018).

The performance of Etisalat in the telecommunications industry had seen a huge rise in the previous year. The revenues of the organization in UAE had raised by 5.5% and the overall revenues of the group further increased by around 2%. The company has seen growth in the revenues for the last few years and quarters. The profits of the organization had increased in the year 2017. The subscriber base of the organization had reached more than 12.6 million which further represented the growth of Etisalat year by year. The organization is thereby aiming at creating a better level of performance for the customers and provide long-term based value to the stakeholders as well. The launch of the 5G network by Etisalat was also quite successful and led to the ability of the company to provide the best technologies to the customers (Foss and Hallber 2014).

Corporate social responsibility of Etisalat

The major product that has been considered for the analysis of various operations of Etisalat is the mobile plan provided by the company to the customers of Etisalat. The different plans that are provided by the organization are thereby based on the needs and demands of the customers. The company mainly provides prepaid and postpaid plans which are able to fulfil the needs of the customers. The organization has also shown high levels of dedication to the social responsibilities that are required to be fulfilled for the purpose of operating in a sustainable manner (Frynas and Mellahi 2015).

The corporate social responsibility based activities of the organization are able to provide huge momentum to its operations and reputation in the industry as well. The business organizations engage themselves in various CSR activities which are able to address the issues based on societal, environmental and other operations related issues. The CSR programmes are also able to engage the employees in the organizational operations. The corporate culture of the organization is thereby able to align the values and the principles of the employees with the organizational objectives. This can also be helpful for the company to create brand recognition in an effective manner. The CSR based health programmes are able to boost the morale of the employees so that they become more productive in nature (Hill, Jones and Schilling 2014). The CSR programmes are gradually becoming a major part of the key strategies in the Middle East based regions and countries. The organizations in these areas are thereby looking at the long-term sustainability based projects which are able to provide high returns to the company. Etisalat has also applied this strategy to improve or enhance its operations in the telecom industry. The different CSR programmes of the organization are targeted towards countries like, Nigeria, Tanzania, Sri Lanka and Egypt (Hitt and Duane Ireland 2017). The company has also seen more profits and higher returns on the investments with the help of business based CSR activities. The innovative services are thereby able to open more streams of business for the purpose of helping the communities. Etisalat has been able to enhance its reputation with the help of different CSR programmes that have been arranged by the company in different areas. Etisalat is a major participant of the United Nations Global Compact which has been able to revolutionise the various CSR based concepts. The company has also been able to introduce a trend which is known as “Cause based CSR”.

Target market of Etisalat

Etisalat is has acquired the topmost position the telecommunication industry of Middle East. The organization is also expected to gain a position among the top ten mobile network operators of the world. Etisalat has been the trend setter for many technologies in the telecom industry. The company has the largest LTE based network in the entire Middle Eastern areas. The organization has been able to acquire a significant share in the market with the help of its technological expertise and high expansion rates as well. The major target market of Etisalat in UAE are the families and the commercial organizations as well (James 2016). The product of the company that has been considered in the analysis are the mobile plans that are offered to the customers. The mobile plans of the company mainly consist of various types of offers that are targeted towards specific groups of people. The company is thereby targeting the customers based on their demographics which includes, their age, income levels and other major factors as well. The prepaid and the postpaid plans are thereby offered to customers based on their personal needs and demands (Kasemsap 2014).

The major competitors of Etisalat in the telecommunication industry are, DU, Telkom, MTN, Cell, Neotel, Millicom. The competitors of the organization are working quite well within the environment which has further led to huge pressure on the profits of Etisalat. The main contribution to the success of the competitors of Etisalat in the market are the marketing based strategies and campaigns and strategies that have been developed by the organizations in the telecom industry.

The competitive strategies that have been implemented by Etisalat in the telecommunication industry are based on the ways by which the company aims at penetrating the market and increase its operations in other areas of the world. The development of the market that is already acquired by the organization is also a major part of the marketing strategy that has been developed by Etisalat. The diversification strategy that has been used by Etisalat in the telecom industry is also a major part of the ways by which the organization aims at creating its competitive position. Etisalat has thereby become a leader in the competitive telecom market of UAE which has only two major operators. The organization has targeted the mobile plan based products to large group of customers based on their specific needs (Popkova et al. 2015).

Critical success factors of Etisalat

The success of Etisalat in the telecommunications industry is mainly based on the various critical success factors which are as follows,

  • Etisalat was the one and only telecom operator in the United Arab Emirates for a huge amount of time.
  • Etisalat has acquired the position of the leading organization in Asia, Middle East, Africa and Asia.
  • The growth and expansion of Etisalat has been helped the company to become one of the most important organization in the entire world.
  • The highly demanding telecommunication based industry has been helpful for Etisalat to become strong and further create high amounts of profit as well.
  • The latest and high technologies are used by Etisalat in its various operations all over the world.
  • The powerful and intense marketing campaign of the organization has also empowered the expansion based activities in different areas.

SWOT analysis of Etisalat

Strengths – The organization is facilitated with the availability of huge investment of capital which helps it to provide the latest technologies which is similar to satellite based services. The clients are thereby allowed satellite technology so their services can be used in any part of the world. The company is also known for offering enhanced levels of customer service which helps in creating a loyal customer base.

Weaknesses – The initial expenses of the company are quite high and all the employees in different parts of the world do not have the right information about new technologies. The customers and the employees are also not always aware of the technology that is present in environment (Sakas, Vlachos and Nasiopoulos 2014).

Opportunities – The growth of business operations can increase the network coverage over larger areas. The availability of low wage employees is also an opportunity for the organizations to create a profitable position in the industry. The political situation that prevails in UAE is quite stable in nature which will helps in the proper operations of the organization.

Threats – The lack that is seen in the purchasing power of the clients is an important factor that can affect the profitability of Etisalat. The strategies based on marketing that have been implemented by the competitors also affects the ways by which the organization operates. The economic recessions taking place in different areas of the world are also quite important in affecting the revenues of the company in an adverse manner.

Etisalat can use the financial strength in order to increase its opportunities of expansion in other areas of the world. This can help the company to create a profitable position in the telecommunication industry. The major weakness of Etisalat is the lack of knowledge of the employees related to latest technologies. This weakness can be turned into a strength with the help of the financial capabilities of the company to create its resources effectively (Plans 2018).

Ways by which the target customers perceive the brand

Etisalat is considered to be a valuable and lucrative brand in Middle East. The loyalty programme that has been offered by the organization to customers have also been able to raise the value of the brand. The perception about the brand in the minds of consumers has also been quite high with respect to the services and products that are offered to them. The level of products and the quality of services play an important role in the perception of Etisalat that is created in consumer minds. The competitors of the organization have been able to create huge pressure on the ways by which it operates in the telecom industry. The products and services that are offered to the customers have been given more importance as compared to the competitors in the industry. This provided the company with the topmost and most valuable position in the telecom market.

The positioning map of the telecom industry will be helpful in understanding the position that is created by the company as compared to its competition in the market. The positioning map of the organizations in the telecom industry is explained as follows,

Conclusion

The report can be concluded by stating that Etisalat has been able to create a profitable and valuable position in the telecom industry of UAE. The competitors of the organization have been created pressure on the profitability of Etisalat. The analysis of the external environment of the company has proved that it is suitable for the operations in the country. The SWOT analysis has depicted that the company can use the strengths for the purpose of using the opportunities and changing its weaknesses into greater strengths. The hugely growing telecom industry of UAE is also an opportunity for the successful growth of Etisalat in the country. This can also help the company to serve the target market in an effective manner.

References

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https://www.taylorfrancis.com/books/9781351999908

Cosenz, F. and Noto, G., 2016. Applying system dynamics modelling to strategic management: a literature review. Systems Research and Behavioral Science, 33(6), pp.703-741.

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Daspit, J.J., Chrisman, J.J., Sharma, P., Pearson, A.W. and Long, R.G., 2017. A Strategic Management Perspective of the Family Firm: Past Trends, New Insights, and Future Directions. Journal of Managerial Issues, 29(1).

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Dyer, J.H., Godfrey, P., Jensen, R. and Bryce, D., 2015. Strategic management: Concepts and cases. Wiley Textbooks.

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Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press, USA.

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Plans, P. (2018). Etisalat UAE | About Us. [online] Etisalat.ae. Available at: https://www.etisalat.ae/en/about-us.jsp [Accessed 18 Jul. 2018].

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