Swot Analysis Of China Telecom Marketing Essay

Swot Analysis Of China Telecom Marketing Essay In this chapter, we will perform SWOT analysis to each company mainly based on their annual reports, as well as forecast their future trends and external environments development in the coming years through their future strategies and news. SWOT summarizes the key issues from the business environment and the strategic capability of an organization that are most likely to impact on strategy development. This can also be useful as a basis against which to generate strategic options and assess future course of action. (Johnson, G.2008) Strengths: characteristics of the business, or project team that give it an advantage over others Weaknesses (or Limitations): are characteristics that place the team at a disadvantage relative to others Opportunities: external chances to improve performance (e.g. make greater profits) in the environment Threats: external elements in the environment that could cause trouble for the business or project 6.1 SWOT analysis of China Telecom Strengths Absolutely leading broadband resources and network infrastructure in China. They have very strong advantages in fixed communication field  [1]  . Strong abilities in the development of new business because their affluent network resources and various business types. The first telecommunications operator in China to publish Cloud computing strategy and solutions  [2]  . To innovated the data traffic marketing model, through strengthening sales and marketing to enhance customers experience and cultivating users habit of usage to increase data revenue  [3]  . They will strive to enhance their strengths in innovation, service, efficient centralisation and operation management, and take more solid steps towards the goal of being a world-class integrated information service provider so as to create more value for shareholders  [4]  . China Telecom owns a great mount of customers in China, and they have good customer relationship. With 77 million wireline broadband subscribers and 126 million mobile subscribers  [5]  , they have a great advantage in the market share. China Telecom has advanced service quality; they build the Group Customer Service Center to supply more perfect services to their customers  [6]  . Weaknesses As a state-run company, it has a heavy social responsibility. There are more than 400 thousands employers working in this company, and the company also have a duty to help some backward areas build communication networks, as well as do investment in the basic network facilities. So the companys operation cost is very high  [7]  . Complex organization structure of the company leading to their market reaction speed is relatively slow, and the cost of innovation is high  [8]  . The starting point of Chinese new network development is lower than the European countries. The channel of distribution is weak because of the limitation of state policies and profession  [9]  . The companys strategy only focus on the current operation, the lack of long-term strategy and strategic planning talents make the company be weak in the overall situation  [10]  . The recently network infrastructure cannot supply specific services to customers because China Telecom has advanced network infrastructure which are mostly used to meet the demand of general service, not based on the actual market demands. Opportunities In 2011, Chinas mobile telecommunications market has gradually migrated from 2G to 3G services. With accelerated growth in 3G services, the market potential was huge  [11]  . China has launched its own domestic 3G mobile technology standard TD-SCDMA, which will challenge CDMA2000 and W-CDMA  [12]  . Government determination to invest in Chinas telecommunications industry ensuring that it becomes innovative  [13]  . With 1.3 billion citizens, the size of the telecom markets is the biggest. China is actively expending its political and economic ties with major emerging markets, which contribute China Telecoms Strategic cooperation all over the world  [14]  . At present, 3G service and wireline broadband service are still in a period of high growth. The commercialization of new services such as mobile Internet, Cloud computing and Internet of Things is further accelerating, which will open up a new area for the Companys development  [15]  . Threats Since 2010, the governments investment in 3G will be reduced gradually, and the development of the telecom industry will be driven mainly by consumption  [16]  . In recent years, a lot of foreign companies solicit telecom talents in China by high-salary or high-welfare policy. As a result, the brain drains of China Telecom become serious  [17]  . In China, there are relatively strict limitation by industry policies in the aspect of business license, Internet services and telecom fees etc. In the present China telecom market, the control of inequality has restricted the development of China telecom  [18]  . The telecom market is becoming saturate and competition between domestic telecom companies become more intense  [19]  . The integration of the information industry and intensifying market competition in China. 6.2 SWOT analysis of Royal KPN Strengths KPN is ranked amongst the most sustainable European telecommunications companies for the second year in a row  [20]  . The number of households that KPN can serve with fiber services has grown sharply  [21]  . Strong Operational Performance in terms of telephony services  [22]  . The strong KPN brand. KPN has a number of other consumer brands in different countries, because they have a varied customer base which calls for a suitable range of products and services. KPN will strengthen their market positions in the Netherlands by an enhanced focus on product and service quality, a more efficient organization and a tighter policy on costs. KPN will create a nimble organization by simplifying the organizational structure and by offering a clearer set of products and services in both the business and consumer markets in the Netherlands. KPN aim to increase the customer base for fixed and mobile telephony and see particularly good opportunities for the fiber network. They will continue their Mobile International Challenger strategy in the coming years. Weaknesses Business market size declining due to price pressure, continued rationalization and macroeconomic impact  [23]  . Concentrated revenues from Netherlands, with other geographies contributing very less in terms of profits  [24]  . Customers lose in traditional mobile service because of new Internet communication services  [25]  . Lost market share to competitors in the mobile sector due to what customers perceive to be high prices and inflexible service packages  [26]  . Market reaction speed is relatively slow, leading to a downtrend in the operation revenue  [27]  . Opportunities Strategic acquisitions- opportunities across the globe, and the company said that KPN will continue to explore all strategic options  [28]  . Increasing demand for the more profitable 3G services, variety of 3G services also supply more broad development space to KPN. 4Gs springing up request the support of a sustained investment  [29]  . The sharp rise in mobile internet usage, as is data usage, the telecom and ICT landscape is continuously developing  [30]  . The growing range of new and profitable services based on internet protocol  [31]  . Technological opportunities from Smartphone, tablets, fiber and cloud services  [32]  . Threats Competitive pressures from its more global competitors. The European local telecom markets tend to saturate. Regulatory issues across Europe. Due to MTA (Matanuska Telephone Association) impact, the regulation about Roaming and Spectrum may lower KPNs growth in ARPU  [33]  . Increasingly substitute text messages or voice calls with instant messaging or voice over internet protocol services such as Skype  [34]  . European debt crisis and looming recession impact the companys business and corporate market, lead to consumer confidence declining. NMA (National Media Association) starts an investigation regarding possible collusion of mobile operators on propositions in the mobile market. Regulator OPTA announces to put KPN on close supervision further to alleged violations of obligations based on the Telecommunication Act  [35]  . http://wenku.baidu.com/view/7cef4a070740be1e650e9af6.html à §Ã‚ ²Ã‚ ¾Ãƒ §Ã‚ ²Ã‚ ¾ 6.3 SWOT analysis of Deutsche Telekom Strengths The widely basic network facilities across all over the Europe and strategic partnerships  [36]  . Bid amount of customers with high loyalty and upscale markets. A leading Internet service provider with more than 25 million broadband subscribers and strong performance of broadband services  [37]  . Absolutely leading technology advantage in telecom industry and comprehensive business services. It is placing a wide range of products and services in the Telekom cloud  [38]  . The global famous brand with broad market distribution and their business services provide all over the world  [39]  . They will continue to invest in key growth areas despite unfavorable regulation. They are building modern broadband networks both wireless and wireline, which makes them a major contributor to the online society. They are focusing on innovation- with some areas, such as mobile internet and cloud computing, already generating substantial revenues  [40]  . They will be investing in modernizing the network and continuing their efforts to establish T-Mobile as the carrier that offers customers the best value for money. Weaknesses High operate pressure from the companys high debt  [41]  . Fast expand lead to the companys scale is too bid, as well as the market reaction speed is relatively slow. Relatively lower service quality than the other leading telecom companies in Europe  [42]  . The cost of management is too high because of the corporate merger and acquisition in recent years  [43]  . Competition from other European and global operators means little market share growth. The falling fix-line business markets make a big loss in companys revenue  [44]  . Limited presence in Asian markets  [45]  . Opportunities Germany is the largest national economy in Europe and the consumption level is high  [46]  . The fact means that Deutsche Telekom has a comfortable development environment and business markets. Germany has Europes largest telecom market, with average penetration in the broadband and mobile sectors  [47]  . High data volumes, a booming smart phone market and customer demand for high-speed networks in local market  [48]  . Corporate merger and acquisitions over the world. Increasing demand for the 3G services and new networks technologies such as 4G and mobile internet usage  [49]  . Positive outlook for cloud computing. According to experts, in 2020 many companies will no longer have their own servers and instead switch to cloud  [50]  . The development of modern wireless technologies highlights their original technical advantages  [51]  . Threats Government intervention. Government intervention could put downside pressure on the stock and increase political risk. Unfavorable regulation and the imposition of special taxes in some countries in Southern and Eastern Europe  [52]  . Difficult economic situation in Europe as well as the huge challenges that Deutsche Telekom are facing in telecom industry- continuing intense competition in their core business with network connections. Depression of European telecom industry and the local market tend to saturate. The shortage of talent in Germanys telecom industry  [53]  . Users demand for the service quality is becoming higher and higher  [54]  . Increasingly substitute network services threatened the traditional business. 6.4 Conclusion In concluding, we can see from the SWOT analysis, China Telecom is one of the worlds largest telecom provider due to the Chinas huge population and potential market, so the companys advanced technology, innovation ability, as well as 3Gs spring up in China will bring a huge business value to China Telecom. This is meaning the same huge potential investment opportunity for the investor. It will be a very good period to invest in China Telecom. Besides, Mobile Internet, Cloud computing and Internet of Things will open up a new area for the Companys development. That is all the good news that brings investors more benefits from their investment. But Chinas telecom business is immature relatively because the late start and China Telecom as a state-run company has a heavy social responsibility and limited develop environment. For investors, invest in state-run company means they will meet more investment restriction. High operating costs, strict limitation policies and increasing competit ion will be huge challenges to China Telecom. That also means more investment risk for investors. According to the chairman of China Telecom, Wang Xiaochus report in 2012, China Telecom is aiming to be the world-class integrated information service provider. To enhance their strengths in innovation, service, efficient centralization and operation management will be China Telecoms core strategy in the future. Royal KPN is a leading telecom provider of Netherlands, with strong operational performance especially in telephony services. It will be a strong advantages at present when the demand for varies of telephony services is growing rapidly. The companys stable development strategies make it be one of the most sustainable European telecommunications companies. So it can be seen that invest in KPN is favorable and safe. Then, increasing usage of new communication technologies such like mobile internet will make a lot of business opportunities to the company. Besides, Companys acquisitions and telecom services across geographies will further promote the companys development. We believe that KPN will attract more investors as the development of new communication technologies and the companys extension strategies. But the competition from other European telecom companies means limited market shares, as well as the saturated market and regulatory issues across EU, giving huge pressures to the company. Besides, global economic slowdown and debt crisis in European also make adverse influence to the companys development. For investors, the saturated telecom markets and floundering economy in Europe means they will get relatively few returns when they invest in KPN at present. And the debt crisis in EU also leads to investment risk. In the coming years, we can see from KPNs new strategy 2011-2015, they will promote the Strengthen, Simplify and Grow strategy and ambitions towards their goals in 2015, aim to give more favorable product and services to customer. Deutsche Telekom is the largest telecommunications company in Europe with widely basic network facilities and strategy partnerships. A lot of investors prefer to choose Deutsche Telekom because its global famous brand with broad market distribution and their business services are provided all over the world. High telecom technology, high loyalty customers and upscale markets make the company have strong competition powers among the increasing competitors in Europe. So invest in Deutsche Telekom is general considered to be reliably. But undue corporate merger and acquisition strategy, as well as the companys high debt make high operating pressures to the company. These adverse factors in companys operation will threat the profit returns in the investors investment. Also as an EU country, regulatory issues, strict competition and debt crisis in Europe will be big challenges to the company. In the future, Deutsche Telekom will continue to invest in key growth areas despite unfavorable r egulation. They are building modern broadband networks both wireless and wireline, which makes them a major contributor to the online society. They will also focusing on innovation with some areas, such as mobile internet and cloud computing. In general, all of the three companies have their respective advantages and disadvantages. Increasing competition, saturated markets and regulatory issues are the situations which the telecom industry must to face with. How to balance the increasing demand for new network services and the loss of traditional business will be the key points to every telecom provider. For investors, despite we can see that invest in China Telecom will have much potential due to the increasing demands for new services, but the immature telecom markets and limited develop environment in China mean higher investment risk than the other two companies. Invest in KPN and Deutsche Telekom are both considered to be safe and reliably, because their strong brands, advanced network facilities and technologies. We can see that, be contract with the adverse economic environment and regulation in Europe, KPN relatively well development strategies help them reduce many losses, and meet more business opportunities in new technical demands. Deutsche Telekoms low market reaction speed and high cost lead a higher loss in their traditional communication services. So we prefer to choose KPN for investors to do investment due to the companys sustainable competition advantages and future development strategies.