Industry

V. THE INDUSTRY

A. Industry Definition

B. Industry Analysis

i. Driving Forces

One of the driving forces in the telecommunication industry is the use of modern technology. Since modern technology is rapidly growing, the demand of new services to be offered is also rapidly booming. An example is the internet usage. It is one of the fastest growing technologies that telecommunication companies are already penetrating. Another factor is the increasing in market competition. Because of the fast growth of technology, the number of consumers of the industry is also increasing. Therefore, a lot of multinational companies are showing their interest in investing in the telecommunications industry. Another factor is the increasing use of mobile technology. Still related to the rapid growth of technology, the increasing consumers of mobile technology also spark the interest of companies to enter the telecommunications industry. The previous telecommunication industry, which is the traditional phone service, used to earn the highest revenues but today, the mobile technology service will replace the previous telecommunication industry.

ii. Macro - Environmental Analysis (CDENTPC)

The Macro Environment Analysis is the first step of a strategic analysis. Its purpose is to identify any possible opportunities and threats to the industry as a whole that are outside its control.

Competitive Forces

Demographic Forces

Environmental Forces

Natural Forces

Technological Forces

Political Forces

Cultural Forces

iii. Porter’s 5-Forces Model of Competition

Threat of New Entrants.  It comes as no surprise that in the capital-intensive telecom industry the biggest barrier to entry is access to finance. To cover high fixed costs, serious contenders typically require a lot of cash. When capital markets are generous, the threat of competitive entrants escalates. When financing opportunities are less readily available, the pace of entry slows. Meanwhile,...