Mobile One Essay
Introduction Mobile One (M1) is a telecommunications company based in Singapore. Launched in 1997, it was Singapore’s second largest mobile operator after Singapore Telecommunications. However, due to competition with the entry of StarHub in the mobile market, it is now the third largest mobile operator in Singapore in terms of number of subscribers. However, during its launch it gained tremendous support and managed to hold more than 35000 customers within few weeks.
It offered variety of new services to Singaporean customers such as 24-hour customer service, longer peak hours, and short message service. Moreover, M1 had also initiated Singapore’s first information-on-demand mobile phone service via SMS, and introduced an SMS-based banking service, virtual paging, GSM 900 pre-paid card as well as a high speed mobile data service. With its growing number of subscribers every year the company maintains an increasing amount of profit.Due to intense competition in mobile phone service providing industry, M1’s vision is to be the leader in personal communications, distinguished by innovativeness and dedication to their customers, people and shareholders’ and its mission was “to be an efficient and totally customer focused company, achieving the highest satisfaction for customers’, people and shareholders’In this report we will be conducting a comprehensive SWOT analyzing and making an assessment of M1’s internal strengths and weaknesses, and external environmental opportunities and threats; with reference to Porter’s five markets Forces Model, we will also try to develop a competitive strategy for M1 that can contribute to the long term sustainability of the organization.
` SWOT analysis SWOT analysis is tool for examining an organization and its environment, SWOT stands for strength, weaknesses, opportunities and threats (Robbins et al. 006, p. 267). 1. Strength Strengths are internal characteristics which can better an organization’s competitive situation. (Bartol et al.
2005, p. 201) Achievement M1 introduced Singapore’s first international roaming pre-paid card and clinched a license to offer 3G services in Singapore, as well pioneering mobile phone Cash-card, top-up or prepaid service. Due to pioneering new services give an edge to M1 in market in the early stage.M1 is the first company to offer 24 hours customer service in Singapore, which had an overwhelming successful response from cus¬tomers and brought its expansion forward, during this time other companies did not have the determination to operate to 24 hours, thus making M1 more favorable amount consumer.
M1 was awarded with numerous awards such “The Best Mobile Network provider in Singapore”, as well as “The best new operator in Asia-pacific”, and “10 retail gold courtesy Awards”. These awards give a strong impression in customer’s perception. LeadershipM1 has a strong leadership, as well as good strong organizational behavior, M1 carries democratic authority in his organization, this describes a “leader who tends to involve subordinates in decision making, delegate authority, and encourage participation in deciding work methods, use feed back as an opportunity for coaching” (P. Robbins, et al p. 596) Mr. Montefiore was the only CEO that managed to set up his company M1 in time for 3G; this clearly shows Mr.
Montefiore is very experienced and his vision allowed him to achieve such creditability to be able to stay at the forefront of new technological development “Mr.Montefiore is credited for transforming a young company into a listed firm in about five years” “Mr. Montefiore was given the “Out¬standing CEO of the Year” award, one of the three prestigious annual Singapore Business Awards given out by The Business Times and DHL Worldwide Express”. Creative and Innovative M1 introduced a counseling service through SMS known as “Ask Carey”, the unique MMS, where users can send a multimedia messaging service that allowed the user to send photos, animations, voices and music, between mobile phones; This allows customers to have some means of entertainment.
M1 has also received numerous awards for creating creative advertisements and received awards such as “The Most Effective Marketing Campaign” award, in particular as well as “innovation in the global telecommunications industry” and Ml was chosen as the best because its “Every¬thing under the Sun” campaign was creative, clear and in-formative, made effective use of chosen media, was targeted appropriately and produced measurable results.Weaknesses Weaknesses are activities that organization does not do well or resources it needs but does not posses, these step forces managers to recognize that every organization, no matter how large or successful is constrained by resources and capabilities it has available. Employees’ fraud In December 2001, there was a leak of customers’ personal details involving two of M1 employees breaching the company’s policy.Such treachery to M1, reflects a great impact on M1’s reputation, such circumstances may also lead to a repetition of the same behavior if M1 does not exercise substantial supervision over employees; and penalize those who committed such acts.
Termination of paging services M1 had decided to shut down, its paging services due to shrinkage in profit and of market share which was less than 10 percent of the total market. This action states that M1 was pursuing profit. This is a weakness because M1 abandoned customers’ need; even though M1 portrays itself as customer focused organization.Opportunities Opportunities offer potentially favorable happenings in the firm’s external environment. Global M1 is popular in Singapore as it was listed on the Singapore Exchange after making history by the third largest IPO (Initial Public Offering) ever in Singapore on the 4th of December 2002.
With this opportunity, it has increased the reputation of the company and eventually, the opportunities to work with other companies in Singapore for certain purposes will increase. Besides, it also tends to increase the attention from foreign investors.This is because, as they are listed on the Singapore Exchange, this will lead to increase the confidence of the investors towards the company. Youth segment of the market The youth market is definitely growing from all over the world; Singaporean youth are no exception to this trend, this combined with their higher spending power make them a profitable market to cater to.
The youth market in Singapore is also considered tech savvy, which are very enthusiastic about technology related products. And youth markets are early phone adapters.Survey by AC Neilson shows us that such people from the 15-29 age groups formed a 32 percent of the total market in Singapore. According to research Singaporean youths are very particular about current lifestyle trends. StarHub formed an affiliation with MTV Asia, since MTV is very influential towards youth’s current trends.
Technology Youth markets are expected to be highly receptive to 3G (3rd generation services). As mentioned earlier youths are the fastest of all age groups to adapt to new Technology.However, WAP(wireless application protocol) was launched before WiFi and 3G, although there were drawbacks to WAP, such as it is usually very slow, and does not contain all information which can be usually be located on the internet. Moreover, one latest development for M1 is focused on using the mobile phone to make payments for mundane transactions such as parking fees, movie tickets, groceries, phone bills and the like.
This development is most probably suitable for businessman or career woman.For example, this can attract the attention of customers that used to flight for business purposes. Threats Telecommunication industry regulated by IDA The regulations by the IDA have restricted M1’s abilities, such as broadcasting information through advertising. With this regulation, M1 cannot make any claims and assumptions regarding its price or quality of its telecommunication services to customers as it will mislead and confuse them.
Another IDA rule is all telecommunication companies must allow customers to retain their old numbers for free when they switched providers.This has narrowed down M1’s ability to charge customers for using their services. Therefore, revenues may be harder to gain and M1 would have to find other means of attracting customers. Competition M1’s competitors are SingTel and StarHub, SingTel was a public company till 1992, and Star Hub was launched after the establishment of M1, even then it managed to capture a sizable market through its smart move of not charging incoming calls and per-second billing.
Such strategy was not implemented by M1 and SingTel therefore, they lost significant amount of market share. Moreover, StarHub also slashed their prices for international calls by 69%, these actions by StarHub will cause major threats to M1, since M1 is unable to predict and monitor StarHub’s competition. Internet phones Calling from the internet is not a direct competition or threat to M1, but it can be threat later regarding international calls especially,. Today’s customers are very demanding they want services like video conferencing.Other internet services such as chat, free VOIP (voice over internet protocol) like Skype can also pose an indirect threat to M1.
Porter’s Five Forces Model Threat of New Entrants The barriers to entry are defined as “the existence of high start-up costs or other obstacles that prevent new competitors from easily entering an industry or area of business. Barriers to entry benefit existing companies already operating in an industry because they protect an established company’s revenues and profits from being whittled away by new competitors”. Dictionary. com n. d) So for a firm to enter a Singapore’s telecommunication industry, the firm will need to pass the following barriers of entry, which are amount of capital needed, technology, and skilled labors.
The most difficult part for firms to enter an existing market is acquiring the capital, and most of the time it is a huge sum of money. Apart from large investments, it also takes a long period of time to establish in a telecommunication industry. This was clearly demonstrated by M1 where they broke in to monopolized market by SingTel.It took M1 around a year to obtain a license to operate mobile phone services and radio paging service.
Furthermore, it M1 twenty four months to laying the groundwork, and launched its mobile phone services on April 1, 1997. Telecommunication industry is always being updated by modern technology, so they need to obtain the latest technologies, such the latest cell phone towers to transmit radio waves (Levitt, Cell-Phone Towers and Communities: The Struggle for Local Control), lasted satellites, system software, broadcasting capabilities.Furthermore, getting hold of new technology is extremely expensive. Past experience is essential for new entrant, or else it will a pose as threat to them; according to M1 the organization hired people who had some sort of experience with telecommunication industry.
They also hired employees who are experts in fields such as marketing, sales, management, customer service, product/service development, financial planning and mobile operating system to perform and operate successfully in order to compete.In another words, this necessary details experience and the appropriate skills to perform successfully in a major telecommunication industry. Threat of substitute products Threat of substitute products occurs to switching cost and buyer loyalty based on customers’ likelihood in switching to a substitute product (Robbins et al. 2006, p. 275).
In M1’s case study, we have identified a threat of substitute product towards the telecommunication industry: The appearance of the internet can be posed as a substitute especially VOIP o mobile phone services. As internet services booms, more and more people are turning towards the internet for means of communication. This also allows customers to spend less or nothing at all, internet can serve multiple purposes, such as entertainment and different types of communication, such as talking to more than one person at a time. Software like Skype, (a popular programs used to communicate verbally), is very successful due to its ability to carry clear voice messages to anyone in the world, even to those with slow connection.This poses great threat to mobile phone companies, since they are convenient for those who use dial-up connection for internet as they are still able to make calls to people through online calling programs and not through normal telephone line.
Thus, such calling programs would be a threat to 3G services on mobile, where customers’ are being charged to make a video calls; whereas it can be used for free on the internet Bargaining Power of Customers “Bargaining power of customers determines how much customers can impose pressure on margins and volumes. ” (Mosley et al. 996, p. 89).
The advancement of mobile phone service industry has led the customer to become more complicated than before; especially in Singapore’s mobile service market has saturated and customers are less price sensitive. The non price aspects resulted in a high bargaining power of customer, because customers would want to have the best quality service (due to higher spending power of Singapore) regardless of how much they would have to pay. So this resulted in aggressive competition amongst companies, as well as reduced prices and higher quality.As mentioned, M1 was one of the first companies to have launched 3G and 24 hours customer service in Singapore.
This demonstrates that the bargaining power of customers is very high in M1, as the company is solely reliant on it’s customers to progress. Customers are the soul of an organization in terms of survival, especially in the telecommunication industry, provided that the core benefits are provided to the customers and all customer inquiries are duly answered. Customer satisfaction is of the utmost importance in the telecommunication industry. Bargaining Power of SupplierThe bargaining power of suppliers is how much suppliers exert industry power by threatening to raise prices or cut quality of goods and services.
(Bartol et al. 2005, p. 202) As a provider of mobile phone services, the signal tower is very crucial to M1. The raw material required for producing signal towers is mainly steel and therefore M1 would need to be affiliated with reliable, good quality steel manufacturers. Other than signal towers, M1 also relies on the capital and investment, which requires the co-operation of shareholders, as M1 is now a listed company.M1 will need large amounts of capital and heavy investments in order to stay in front or at par with their competitors.
To obtain capital or investments, M1 has to impress shareholders and give them the confidence to invest in the company therefore the fraud incident caused by the treachery of M1 employees must be prevented from happening in the future as this would drastically effect current shareholders confidence and trust in the company and it’s management and not to forget, the severe effect on M1’s reputation. Existing RivalryRivalry in a business is custom, an organization will be able to experience growth and maturity through rivalry. Rivalry among existing competitors leads to tactics such as aggressive pricing and promotion, battles for customers or channels or increased service level. (T. Have et al.
2003, p. 46) M1 has two main rivals: SingTel and StarHub. The competition is inflexible as the Singaporean market is either mature or saturated. This shows that M1’s competitiveness with SingTel and StarHub is intense as they conduct more advertising campaigns, launching of new call plans and increased quality of customer services.Through these non price strategies, M1 can attempt to establish brand loyalty providing what the customer actually demands for.
These non- price tactics will incur significant costs. Conclusion Like all businesses, Mobile One is faced with both strengths and weaknesses, as well as threats and opportunities. Strengths such as being the pioneer of 24-hour customer service, asset of the numerous awards received since its establishment and the force of a competent management. Thus these strengths would enable Mobile One to expand further and increase market share.The weaknesses of M1 however are the termination of the paging services, where they were in hold of 10 per cent market share, which they had discontinued due to low turnover and the fraud incident.
There are numerous external threats and opportunities. Porter’s Five Force model has a great influence on Mobile One operations, such as, the threat of new entrants into the market, threat of substitutes, bargaining power of supplier and customers and rivalry. A competitive strategy is outlined in the recommendation below. RecommendationAfter conducting the research through SWOT analysis and Porter’s five force model, we have concluded that Mobile One is a fast growing company. With reference to Porter’s five forces model, an appropriate competitive strategy is selected. There are three types of competitive strategies: cost leadership strategy, differentiation strategy and focus strategy.
(Yosshino ed tl, pg 169). The differentiation strategy is the best option: either to increase an organization’s differentiation advantages in relation to suppliers, customers, competitors or to decrease differentiation advantages of others relative to the organization.In other words, this strategy is chosen because M1 seeks to offer products that are unique and that are widely valued by customers. M1 has so far built a strong recognition of its brand through innovative services such as the first to have a 24 hour customer service in Singapore. However from proceeding analysis, there is an obvious problem. The growth in the Singaporean telecommunication industry is already saturated; M1 is vulnerable being a pure mobile operator and the problem is worsen especially when it is facing two strong competitors which are SingTel and StarHub, who rovides other telecommunication services such as fixed lines and internet.
Furthermore, M1 was able to take the lead in 1998 when they introduced an SMS-based banking service and 3G service in 2001. They made themselves technologically up to date mainly to compete with its rivals. Since customers are more concerned about the varieties and quality of services, M1 should continue their progressive steps in coming out with new types of products to outpace its competitors and at the same time provide high quality customer service rather than reducing prices which is proven ineffective.