Ooredoo is one the largest telecommunication company in Qatar with over 114 million customers worldwide. The five porters can be used to explain the progress of the company in the telecommunication industry. One of the five porter's model is the competitive rivalry, and it refers to the number of rims operating under the same market. Since OOredoo is an international company, it faces stiff competition from millions of telecommunication companies around the world. However, the management of the company has ensured that it remains profitable for those many years. One of the major rivals of the firm is MetTel which is another internal telecommunication company (David, 2015).
According to Porter, Such competing firms can result in the collapse of a firm. While trying to venture into a new market, OOredoo must ensure that it will be able to match the competing on that market. For example, the company has few branches in the United States due to the huge number of telecommunication companies in that country. As such, it will limit a number of profits that the company would make each year. To counter competition, OOredo has invested a lot of its resources in advertisement. This is one of the strategies that the company uses to create awareness about their goods and services. It is important to note that porters five model refers to both the internal and external factors that affect an organization. Competition is one example for external factors that can affect the growth of the business.
Bargaining power of the supply is another factor that affects the growth of OOredoo. These included various components such as labor, raw materials. Since the company is in a telecommunication sector, the power of supply does not limit as much. For example, the number of labor in that market is very huge (Muehlhausen, 2013). Also, the availability of raw material is effective in which the company has been able to carry out its operations. However, due to the huge number of competing firms, the power for supplies can also limit its growth as all the other firms will have to be competing for the limited resources.
The threat of new entry is another factor in which OOredoo has been able to deal with over the years. There are some factors that can limit the entry of new firms in a given market. One of the factors is the stiff rules and regulation form the government. While trying to venture into a new market like the United States, OOredoo was restricted by some policies set by the government (Muehlhausen, 2013). The company was supposed to pay higher taxes compared to the local companies in the country. As such, it limited a number of profits the company made.
Buyer power is another factor explained in the porters five model theory. It refers to the ability of the customers to pressure the company regarding their prices. Based on the company information, their prices tend to fluctuate depending on the country. Since they have to attack a huge number of customers, they will have to reduce their prices.
The threat of substitutes is one of the external factors that had a negative impact on the company. This refers to the alternative products that consumers can use. Due to the increased level of competition, other firms have developed new technology that ensures better communication. For example, the use of wireless communication technology. Such measures have impacted the OOredoo negatively as some of their customers tend to prefer such substitutes products.
The company also utilizes the available technology in its innovation and marketing. Technology and information aid marketing innovation in the competitive markets. Competitive advantage can simply be defined as the factors that makes a business better than others. The modernization and enhancements of the available trade or business channels via the use of technology can remarkably decrease the costs of transaction. Marketing innovation that is not aided by technology in a business or trading framework instead needs resource based edge for introducing transfer of knowledge and information regarding the available opportunities in the market. In general, innovation is a tool that is essential for managers to successfully utilize their resources for the creating of a competitive advantage.
David, F. R. (2015). Strategic management: Concepts and cases. Upper Saddle River, N.J: Pearson Prentice Hall.
Muehlhausen, J. (2013). Business Models For Dummies. Hoboken: Wiley.
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