Introduction
The telecommunication industry is the fastest growing industry in almost every country. Both, technology advance in the telephony industry in general, and in the wireless technology in particular, as well as technology advance of the Internet contributed the most for the fast growth of this industry. Telecommunication services constitute the most natural example of network externalities, since by definition, the nature of these services involves communicating with a large number of people (Shy 2001). The telecommunication industry has been built progressively and steadily on major accomplishments in the progress of science and technology. The use of computers to control telecommunication switching systems and the use of telecommunication to gain access to computerized data bases were the two trends behind these claims of convergence. Today’s telecommunication industry uses very sophisticated technology, and there are doubts that the top executives of many companies themselves have the engineering and technological background and knowledge necessary to understand the technology and its implications. This means that they must rely upon others within the corporation (Noll 1997). The telecommunication industry is one industry that continues to improve to meet the changing and complicating needs of clients. Two businesses that compete in such industry are PCCW mobile and One2free. The paper intends to compare and contrast the business level strategy of these companies. The paper also intends to assess if the strategy chosen is the best strategy, and if not, recommend the strategy that should be adopted.
Telecommunication industry
Investment in infrastructures to create and maintain the new information technology (IT) has been a major determinant of the growth of the macro economy. In order to make structural adjustments, existing investment patterns had to be altered to effect the change from capital intensive to information intensive investment. The growth of the primary information sectors of the countries of the Asia Pacific region created both backward and forward linkages with other sectoral growth and served as the leading sectors for development. Such transformation was also aided by the operations of transnational corporations, whose subsidiaries provided the needed technology transfer to the developing countries, and their demand for telecommunications networks created further investment opportunities for the growth of new services (Jussawalla 1993). Hong Kong’s telecommunications services are modern and enable the country to serve as the regional center for global business and to be a gateway to China. Almost 80 percent of its central office switches are digital. Its competitive and aggressive pricing of services has given the country an excellent telecommunications infrastructure (Jussawalla 1993). Hong Kong is one of the areas where telecommunication systems are used on its maximum capacity. The telecommunication industry in Hong Kong provides the region assistance in making sure that the services of the state will be top notch. The telecommunication industry in Hong Kong serves as a bridge that connects Hong Kong with various parts of the world. Two companies in Hong Kong contribute to the development of the telecommunication industry. These two companies include PCCW Mobile and One2free.
Corporate Mission and Major goal
PCCW mobile
PCCW mobile is the largest provider of communication services in Hong Kong. In Asia it is one of the businesses that provide the best information and communication technology systems. The mission and goal of PCCW includes
One2free
One2free is backed up by their mother company CSL. CSL is the leading mobile operator in Hong Kong. One2free is a fast growing communication company that makes sure that they listen to their clients and deliver what the client really wants. The company has clients that have been with them for the past 10 years. The mission and goal of One2free includes
Abel’s approach
For PCCW mobile, it satisfies people who need communication technology that can be used anywhere, anytime. PCCW satisfies PCCW mobile satisfies the need for a reliable but affordable communication system. To satisfy the needs of the clients PCCW mobile make sure that their technologies are continuously updated and attuned to reaching more places in Hong Kong. PCCW makes sure that it promotes itself as a total solution provider for one-solution telecommunication with Quadruple-play capability to empower its product/service leveraging all its other business areas like PCCW now TV, Broadband internet.
One2free is a lifestyle brand aimed at the young and dynamic market segment. One2free is on the process of re branding and is now aiming towards satisfying family members. At first one2free satisfies young people and their desire to have telecommunication products that fit their needs. One2free satisfies the client’s need for customized solutions for every member of the family. One2free satisfies the need for alternative but relevant tailored communication solution. The company makes sure that the clients can achieve their communication needs without any geographical barriers. One2Free is owned by CSL which provides services to the largest mobile subscriber base in Hong Kong and is backed by the company’s famous quality network and service that is second to none. The company satisfies such needs by the client through a service that equals no other network.
Business Ethics
Shareholder strategy
For PCCW mobile the stakeholder strategy revolves around making sure that the needs and intents of the stakeholders will be one of the priorities of the company. For one2free the stakeholder strategy focuses on ensuring that the company will listen to the stakeholders and their demands and act appropriately on it. One2free has a responsibility not only on its own shareholders but on the shareholders of CSL their mother company. One2free shares the belief of CSL that the responsibility towards shareholders should be prioritized.
Reciprocal Strategy
For PCCW mobile the reciprocal strategy focuses on providing humane and fair service to whoever needs it. The company wants to make sure that their service will benefit all people who need it. For one2free the reciprocal strategy is an extension of its goal wherein clients are served individually without branding them and their social status.
Citizenship strategy
PCCW mobile’s citizenship strategy focuses on having activities that can give assistance to people, this activities may or may not have something to do with their services. PCCW mobile engages in activities that have goals in giving assistance to suffering individuals. One2free’s citizenship strategy focuses on information drives that will help clients to understand how their products can be properly used.
External analysis
Porter’s five forces
Risk of new competitors
For PCCW mobile new competitors are not a threat because they have established themselves in the industry and the region. Hong Kong clients have already tried the company’s product and they are satisfied with it, unless the competitor offers an innovative product clients will still purchase the company’s products. PCCW mobile belongs to a large corporation that has all the capability to counter any threat from new competitors. For One2free new competitors are also not a threat because they have established themselves in the industry and they have their own style of service that clients have been fond of.
Rivalry among established firms
The competitive spirit in Hong Kong’s Telecommunication industry is high; this is due to the fact that companies such as PCCW mobile and one2free constantly improves their products and services to meet the needs of their clients. PCCW mobile and One2free discover new technologies that will help them gain advantage over their competitors. PCCW mobile, One2free and other companies discover newer and beneficial markets that they can put their focus on.
Bargaining Power of suppliers
The bargaining power of suppliers is high for both PCCW mobile and one2 free. Both companies rely on the materials from the suppliers in the creation of their product. The price of the suppliers can affect both companies’ products thus both PCCW mobile and one2free has to make sure that they maintain a good relationship with their suppliers. Both PCCW mobile and one2free makes it certain that any agreements they have with signal and equipment suppliers will always be honored.
Bargaining power of buyers
The bargaining power of buyers is high for both PCCW mobile and one2free. The comments of buyers are very important for both companies. The comments from buyers are used to deliver better services to clients. Both PCCW mobile and one2free do the best they can to provide service to the buyers. The buyers are the ones that can add to their income and they can be the ones that will help both companies to improve their standing in the industry. The demands of the buyers will be always an important concern for both companies because it is one way to make sure that clients will not leave and go to other companies.
Threat of substitutes
Currently substitutes are moderately relevant to both companies. No substitute has threatened both PCCW mobile and One2free; the substitutes have different capacities and limits. The substitutes have its own target market and goal thus PCCW mobile and One2free are not affected by the substitutes. But the improvement in technologies causes concern for the companies especially in terms of wireless technology.
Role of the macro environment
Political environment
The political environment in Hong Kong does not and will not affect PCCW mobile and One2free. Any political noise is irrelevant to both companies. Unless the political environment will change rules that relate to their operations, both companies prefer to stay away from such subject. The political environment has allowed the liberation of the telecommunication market, liberation of the market paved the way for improvement of services.
Legal forces
The legal forces in Hong Kong try to make sure that there is fairness and equality in terms of laws in that region. The legal forces of Hong Kong can create changes in the way business is done by One2free and PCCW mobile. The legal forces can dictate the limits of both companies’ operation and it can change the selling techniques used.
Technological forces
The technological forces dictate the trends in the telecommunications industry, these forces is the one that determine what should be used to create a product or provide a service. Both PCCW mobile and One2free rely on the products created by the technological forces; the products of these forces are the ones that can give both companies advantage over their rivals and success in their field.
Economic forces
The economic forces can dictate the actions of PCCW mobile and one2free, if the economy is doing well then both companies can offer new products but if the economy is in a worse state both companies have to reduce unnecessary expenditures and un important actions. The economy of Hong Kong has given opportunities to telecommunication businesses. The status of the economy has paved the way for various telecommunication businesses to prosper in the region and help in proving that Hong Kong is one the premier region that houses the industry.
Socio cultural forces
The socio cultural force serves as the conscience to both firms. This force ensures that PCCW mobile and one2free will not do things they know can ruin both company’s reputation with the society. This force ensures that both companies will consider first its environment before making any decisions.
Demographic forces
The demographic forces are used by PCCW mobile and one2free to determine their target market and which market they want to provide service. It determines facts both companies should know. The demographic force helps both companies to decide regarding how their product will be made so that clients can appreciate it. It will help in deciding on how a product should be changed to meet the demands of the region.
Internal analysis
The competitive advantage of PCCW mobile is its quadruple play offer that includes fixed-line, broadband Internet, broadband pay-TV and mobile services. This kind of service cannot be provided by other companies and it gives PCCW mobile an innovative way to serve clients. The company also provides one-solution with its strong telecommunication technology. This solution allows the company to reach more places and it helps the company have good reputation with the clients. The competitive advantage of One2free is its customized solutions that are aimed at every family member wherein different products are aimed for a certain member of the family. This is a unique strategy considering the Hong Kong mobile services environment wherein adults and school boys are the only ones that probably has a mobile.
Compare and contrast business strategy
PCCW mobile uses the differentiation strategy wherein the quadruple play offer has set its own identity in the industry. This product is different because it was able to combine various aspects of telecommunication like the internet and mobile services. It helped the company to be protected from industry competitors and new entrants because this strategy developed loyal clients that have been fond of the company’s services. This strategy helped the company to be less vulnerable to powerful buyers because the products are unique thus the buyer cannot easily dictate the price. This product paved the way for future changes in the industry. One2free uses the focus strategy wherein the company chose a niche market. The company chose the family as its targeted market; this protected the company from threats from newer competitors. This strategy helped One2free to form better relationship with the clients and it helped the company to try to attract clients to be loyal to them. One2free formerly focused on the younger generation but it introduced a massive change and decided to use the family as its target market. In the two different targets, the company made sure that they are focused on whatever client base they desire.
Comment on appropriateness of strategy
The strategy used by PCCW mobile has served its purpose of helping the company differentiate itself from its rivals. It made sure that people will know PCCW mobile for the uniqueness and boldness of its product. The strategy should remain as it is. PCCW mobile should use its identity as total solution provider for one-solution telecommunication as a means to be the leader in the Hong Kong telecommunication industry The strategy used by One2free was successful in giving the company a different kind of identity wherein the targeted client was families and not the one that is expected in the industry. Before the target market of the company was young people and it was a good target but their competitors have the same target market. The company then initiated changes and targeted families instead of young people thus they have a wider target range. One2free’s strategy should not be changed but it should continue determining the most unusual target. This unusual target will help the company bring more acclaim to themselves and CSL their mother company.
Conclusion
The telecommunication industry is one industry that continues to improve to meet the changing and complicating needs of clients. Two businesses that compete in such industry are PCCW mobile and One2free. These two companies have different characteristics that give it advantage over their competitors. The competitive advantage of PCCW mobile is its quadruple play offer that includes fixed-line, broadband Internet, broadband pay-TV and mobile services. The competitive advantage of One2free is its customized solutions that are aimed at every family member.
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Credit:ivythesis.typepad.com
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