Business Strategies Leading to Growth and Strong Position of Firm

STRATEGIC ANALYSIS

PESTEL

Maxis communication or Maxis Bhd is Malaysian Telecommunication Company providing many different type of customer value added products and service to individual and large consumers. Majority of shares of company is been owned by Ananda Krishnan and there are 11 million customers till year 2015. Maxis Bhd is having its customers within areas like that of Asia excluding Korea and Nepal and South America including Peru and Chile. So this current part will be covering PESTEL which is determining external factors and how are they affecting operations and working of company.

(P) Political

These factors would be the most which regulate and affect the operations of company that is been working within country. Political factors would be those related to regulation issue governed by ruling political party of that nation (JOSEPH. PHILLIPS, CBAP and PMP, 2018). In case of telecommunication industry factors such as Wi-Fi and Internet is now been regarded to as essential human right or need of all individuals. In the current stage where net neutrality is impacting to treat all data onto internet as equal and not discriminating with any other based on content, website or method of communication. So customers of Malaysian telecommunication industry are demanding that government must be treating all internet provider equal which is preventing from data speed and throttling of interne

(E) Economic

All factors which is regulating demand and supply or price of products within country will be counted under economic one. These elements will be including like that of interest rates, inflation, GDP rate, employment and taxes which are affecting Malaysian telecommunication industry. As if there are increased number of telecommunication companies with country this would be calling for more educated and qualified personals thus improving employment rate within industry. Inflation within country is also likely to impact customers of Maxis Bhd as they will be avoiding spending higher level of their income on service providers if inflation is hitting Malaysia. Thus causing company to lower down their price of products to attract more customers or changing their plans.

(S) Social

There is no further scope for telecommunication business to get expanded within area which is regarded as rural within one country (Nicholas and Steyn, 2017). There is no wide range of products and service which are offered to customers so they are having very less option at time of buying internet plan. Almost all telecommunication business will be having monopoly over markets so they end up charging for both internet and mobile handset.

(T) Technological

This is the most important and effecting factor among all as there is technological changes which are taking place on very regular level especially in telecommunication industry. Maxis Bhd will be installing fibre wire instead of copper one, landline is now converted into mobile which are now becoming more compact embedded with lots of features.

(E) Environmental

There are many changes in terms of global warming and climatic modifications which surly is affecting telecommunication industry. Customers are also becoming more and more environment concerns which are making them feel that companies must be focusing onto manufacturing products concerning environment as well.

(L) Legal

Legislative issues and problems will also be affecting telecommunication sector and their companies on wider aspect (Erl, Merson and Stoffers, 2017). Factors like that of monopolies, customers and governments as Maxis is importing and exporting telecom products they are allowed to do so.

Porter 5 Forces

These are force which is driving industrial analysis that of telecommunication sector of Malaysia and is able to explain as to who the competitors are and how company could be analysing its customers. In year 1985 Michael Porter introduced this model which is enabling company within industry to identify customers, rivals, suppliers and substitutes.

Competitive rivalry-

Competitions in markets will be playing important role as price of products and service will be factor causing tough rivalry among them all. Difference between firms will be competing within same market and industry in other to gain share of customers within market. Maxis Bhd within market is lowering down price so that customer of company could be increased.

Threat to substitutes-

The telecommunication industry or products will not be having any available substitute within market as threat of having substitutes will be low (Weimer and Vining, 2017). There is no other industry which is offering customers with products like that of mobile or internet services or even similar feature product is also not certainly available.

Entry barriers-

There is very little chance of entry on any new company or entrance within telecommunication industry as it required huge cost of capital for investment purpose. Even if they are willing to come they are to face many barriers for their entry including legal and political problems depending upon different countries.

Bargaining power of suppliers-

There are huge numbers of suppliers within this industry but the raw materials which are available in small amount. So this will be giving suppliers to increase in their bargaining power for companies imposing conditions on manufacturers by charging the higher costs to raw materials. 

Bargaining power of buyers-

Although there are not more companies selling products and services related to telecommunication then also customers will be having more bargaining power. They are having higher level of information in regard to the telecommunication industry but they are also very much price sensitive and their switching will be affecting competitor as well.

Key Performance Indicators (KPI)

KPI is the process under which it would be including how company is able to achieve their main objectives of business and this is helping in evaluating success of Maxis Bhd. There is many other key performance indicators of telecommunication will be like that of:

Average return per user-

This is amount of money or capital which Maxis Bhd is generating for each of the person or customer of company. This will be evaluating success and failure of company as Maxis is having higher user base which is forming ARPU as higher.

Subscriber acquisition cost-

This is cost which is associated with acquiring of customers of telecom company like all money or capital which is spend on promotion or advertising of products of company (McLean, 2018). If Maxis Bhd is able to identify this SAC then they will be able to take out all cost to company.

Churn-

Churn rate or user turnover is the rate at which users or customers of particular company is been leaving its services and products over certain period of time (Prochaska and Norcross, 2018). Higher level of churn rate within firm will be meaning that products or service are not impressing customer and they are not been able to continue with this same telecommunication company.

Network operating cost-

This network for telecom industry is the most strong point of success if they are providing faster and smoother network to their customers then it is known that customers are indulging to use more of that network only.

FINANCIAL ANALYSIS

This will be be helping to analyis current finanical position of Maxis Bhd within comparing two of its major competitors like that of DiGi Telecommunications and Celcom (Malaysi

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