Econet Wireless International and the African Telecommunications Industry Essay

Activities to be completed in this largessationCarry forth a SWOT psychoanalysis for Econet receiving set internationalist, identifying the attain issues that Econet deficiencys to address from the results of your analysis. Undertake an industry analysis of the Afri house Telecommunications securities industry using Porters tail fin Force Model. Using a competition analysis framework of your choice, analyse the Big v mobile operators in the African trade Econet radio International is facing or faced challenges in a number of markets it entered. Identify these challenges and the sources of these challenges. What tradeing system options should Econet use at it tries to give rise its accomplishments (Justify your options) and what should it do to successfully implement these st localisegies?IntroductionThe selection of a return strategy is ultimately determined by the companys strategical goals, core competencies and strategic assets as hygienic as by its sharpen cus tomers, collaborators and the everyplaceall economic, technological, socio cultural, regulatory and physical context. An integrative nestle of analysing these factors is essential for the learning of a successful wrickth strategy.OverviewEconet Wireless International (hereafter to be referred to as EWI) is a Zimbabwean owned international telecommunications group. The result of Dr. pass Masiyiwas vision, Econet began in mobile tele environ aid in July 1998, after social classs of legal battles. consequently it began leading the change in the telecommunications terrain. Zimbabwe has issued unaccompanied if 3 mobiletelecommunication independences to EWI, Orascom-owned Telecel and the government-owned NetOne.SWOT Analysis for Econet Wireless InternationalAs a result of the cozy and external analysis, our SWOT analysis is as fol woefulsStrengths increase by means of and through and through international elaborateness. As EWI expands onto 3 continents in 10 countries, they are qualified to develop spheric footprint, so increasing their chapiter base and securing their company. advanced merchandise get down. They continuously veritable product range, they developed into becoming a full-service communications company crack mobile telephony, traditional landline telephony, Internet services, information streaming services, transactions systems and contract services for early(a) operators. For ex enormous, in Zimbabwe alone, they apply a number of executable product offerings, namely Buddie, Ecocash, EcoFarmer, EcocashSave, Econet Solar, Econet Broadband and BusinessPartna Contract Lines.Their trade model alterd them to offer quality products at matched prices. They collaborated in the form of consortium partnerships and also knock ventures. For example, it was able to penetrate markets such(prenominal) as Nigeria, Kenya, Botswana, raw Zealand, Lesotho, Malawi and Burundi. Their joint venture was with Altech in South Africa. The realiz e of this partnership firm was listed in the Johannesburg short letter supplant thus exposing them to a juvenile source of bang-up. Their in return formed company, sassyco, would cause eventually taken over almost all of Econets companys, allowing EWI to backward intergrate with a supplier which in equipment casualty of future growth, would enable them to develop an even wider product offering. This alliance would have been mutually beneficial, with Econet getting access to technology products, pay and administrative structures while Altech would get the opportunity to veer riding on EWIs mobile internet.Multi-branding. EWI employ its name in countries where it had a supreme stake such as in Nigeria, Lesotho, bare-assed Zealand, Malawi and Burundi. In countries where it was the minority shareholder, it operated under different names, namely Mascom ( Botswana), Gulfsat Maghreb SA ( Morocco). Their management structure was such that in apiece country, the operation was headed by a national, who knew the business humor in that country but the financial human face was headed by an expatriate from headoffice thus maintaining effective control and providing support. This encouraged business dealing in those nations as the national heading the operation was able to negotiate deals from a knowl bounceable point.Weaknesses extra superior for trading operations, thus curtailing their growth, especially in refreshing Zealand and Nigeria as the plate study says, the consortium partners resisted a higher stake in Econet, believing they did not have the financial means and/ or resources to invest. In addition, Econet did not have equal money to finance the upgrading of its entanglement and it came under government threat of having its certify revoked, thus they had to borrow $75 million Export-Import Bank. Also, in Kenya, their permission was sour cod to non jump-starter by the consortium to fully honour the emancipation tip off obligations wi thin the given time frame. They failed to provide a service recovery alternative for the averted Buddie card game in 2002 in Nigeria. The implication here was that they created low switching costs for their subscriber base, boosting the gross sales of their competitor.Econet gave their competitors an edge over them in Nigeria, as evidenced by the outcome of their decisions to suspend Buddie cards and also, during their subsequent reintroduction. some(prenominal) times, MTN gained from these moves. In reintroducing the cards, they were not able to support the resulting clapperclaw volumes. They had not had the foresight to prepare for this possibility as a result of their reintroduction. entanglement quality problems resulting from calamity to support capacity when the Buddie lines were reintroduced. It was a situation of use up outstripping total.They had also not expected this outcome as a result of reintroducing the previously popular lines. Its conceptive dependance on their Zimbabwean operations means they weakened their causas at expansion repayable to the unfavourable economic climate. They had raised capital via the Zimbabwe air commercialise but could not use it externally due to stringent government controls on the introduction of hard bullion remittance intendations. Their failure to trespass on the license in sensitive Zealand meant a loss on their part.OpportunitiesTheir listing on the Zimbabwe Stock Exchange gave them the opportunity to raise more than capital. accomplishment of licenses in heterogeneous countries through consortium partnerships meant they gained a foothold in countries such asNigeria, Kenya, Botswana, Morocco, youthful Zealand, Lesotho, Malawi and Burundi though from a minority locate in the consortium. They were able to obtain licenses in various countries. bratsStringent government controls. Restrictions to remit its contrary currencies to finance its operations in early(a) countries, e.g. in New Zea land violent competition, e.g. in New Zealand where the market was duopoly delaying their entry into that market. Low switching costs. In most of their markets, subscribers are multi-networked. As subscribers used a number of networks to maximise on particular network availability and promotions, EWI could not in depend alone on that these subscribers would be faithful. severalize IssuesLimited capital for operations. They could list on the Stock Exchange to draw out investors. They could offer rights issues to existing shareholders, thereby attracting new capital. Network challenges. They strike to upgrade their systems. They contract to hold they have enough technological infrastructure, e.g. base stations, to be able to cater for network loads. Collaboration with suppliers. disposal regulations and restrictions. They need to form relationships with the host governments. Decision making. Improve their decision approach at corporate level, e.g. their decision to limit the nu mber of days subscribers had access to the network. From the above analysis, the followers threats are of high importance and Econet would do well to take noticeStringent government controlsIntense competitionLow switching costsMergers and acquisitions present an attractive and bankable opportunity thus Econet should seek this avenue further.Industry analysis of the Big Five using Porters Five Forces model. Threat of new entrants mettlesome becauseThere are strong barriers to entry in terms of obtaining an operational license due to government restrictions, e.g. Zimbabwe, as shown in the case when Masiyiwa argued the case that the Telecel consortium should bedisqualified as they did not meet tender specifications. Restrictive license fees in terms of costs of getting the license such as in Kenya when EWI had their license cancelled after only two months due to failure to meet their obligation in terms of the license fee. A lot of capital is indispensable to start the business. It is estimated that $14 billion on average is needed as investment in the mobile audio business.Bargaining powerfulness of buyers risque becauseLow switching costs such as in Nigeria when Econet opted to suspend the sale of its prepaid Buddie cards for 6 months due to quality problems, resulting in them losing subscribers. The buyers power is strong in Burundi because they have a cosmos of 7 million people with only 4 mobile subscribers.Bargaining power of suppliers High becauseThe government controlled operator supplier, Nitel, had strong negotiate power, as evidenced by their holding back to supply Econet with transmission links for more than a year and Econet had no option but to wait. There were hardly a(prenominal) suppliers.Industry rivals High becauseCustomer base grew speedily between year 2000 and 2005Intense competition among players in the mobile industry.Substitutes Low becauseLandlines penetration rates were low, for example, in Chad, the rate was on average one landline per 70 people while the mobile phone users expanded between year 2000 and 2005 from 15.6 million to one hundred thirty- louvre million. The overall rating is high because rivalry is high, threat of new entrants is high, bargaining power of suppliers is high and bargaining power of buyers is high.Competitor AnalysisCompetitorKey StrengthsKey WeaknessesPerceived StrategiesKey SegmentsMillicomFirst-mover position commercialise leader status exist leadershipMulti-branded considerable market coverage within South the StatesLess aggressive business approach user-friendly to attackLow tax revenues in the big fiveMass-marketingMulti-brandingCost leadershipLow population marketsInternational marketsMTCInnovatorHigh capital base material market coverageMarket strength through acquisitionAn aggressive playerHigh rate of economic growthNarrow product rangeMulti-brandingFull market segmentationHigh population areasMTNMarket coverageMarket leader unbendable capital baseEconomies of scaleResource utilizationWide product rangeNo multi-branding hot navalLeveraging existing business ontogeny new markets through acquisitionsResearch and developmentHigh population areasNiche, e.g. Middle EasternOrascomStrong capital base through conglomerationMulti brandingCost leadershipWide product rangeMarket leaderMulti-brandingRemoved operations in AfricaMarket developmentHigh populationVodacomStrong revenue baseMarket leaderAdequate resources for expansionInvestment opportunitiesLeast internationalisedMarket growth limitations victorious unnecessary risksJoint venture franchisingForward integrationDomesticInternationalTable 2 gildCapital/ Revenue (in billions $)Market Coverage (number of countries) winding Subscriber Number (in millions)Millicom1.41613MTC32023MTN32132Orascom2.1941Vodacom3527From the analysis above, the market leaders are MTC, MTN and Orascom in terms of revenue. Millicom and Vodacom take the role of market challengers. In looking at mobile subscriber, Orasc om and MTN are the market leaders followed by Vodacom, MTC and Millicom respectively. In terms of market coverage, MTN leads followed by MTC. Millicom is the market challenger. Orascom and Vodacom are nichers as they counsel on specific markets.ChallengesLegislationGovernment controls in the form of price controls, barring establishment of orphic mobile networks Trading policiesLicense to operateGovernment regulations licensing boardIntense competitionDuopoly in New ZealandInfrastructure problemNetwork support lack of foreign currencyGovernment foreign currency regulations in ZimbabweChanges in supercede rate efficient meltdown in ZimbabweLack of capital turn back in listing on stock exchangePoor quality Buddie cards in Nigeria output development and testing was poorMarketing outline OptionsAnsoff MatrixMarket penetration The organisation tries to grow its market share through sales of existing products to the present market, for example Econet Zimbabwe trying to grow its mark et share from 70% to 80%. They could fulfill this through promotions such as offering discounted tariffs. This can be done through ensuring that they have got enough capital to support the reduction of cost on pricing. The company needs to develop budgets to steer ample resources towards promotion and advertising.Product Development Coming up with new or change products, for example Ecocash has been modified to include an account, that is, EcocashSave. They need to invest in a Research and Development department, tasked to come up with more innovative products. They also to need to emphasize on Total Quality Management to avoid product recalls, for example, in Nigeria where the cards had quality problems.Market development The company seeks for and finds new markets in which to expand, for example they go into a totally new market such as penetrating Canada. They can do this through acquisition of licensing in that country.Before acquiring the license, they would need carry out market research to control that that market is attractive and can be profitable for them. They should also ensure that they have enough capital to successfully implement this marketing strategy. In addition, they need to have the right management and organisational structures.Blue oceanThe process of identifying an untapped market in an effort to run away from competition. For example, Econet came up with Econet Solar where they tapped into the solar provision market in an effort to ensure that their customers phones battery life did not affect their network accessibility. In these topsy-survy times where clients have become complicated, the only way to survive in business is through eliminating competition through investing in new technology and/ or Research and Development. As a result, they can realise much in terms of profit. We advise Econet to take the Ansoff matrix strategies because it covers the wide place setting of marketing strates or options of growth.