Introduction
Spark New Zealand is one of the biggest and most reputed telecommunication company in New Zealand. In recent years, Spark Company in New Zealand is facing lots of intense competition and challenges in the marketplace that are providing hindrance for the company to become successful in the global market. The important purpose of this assessment unit is to investigate and evaluate those competitive forces and challenges as faced by the company in its business environment. The project deals in evaluating several influential factors like external and internal analysis through the application of PESTEL and SWOT analysis. It also aims at evaluating the role of rising trends and technology in influencing the perception of the customers towards the company and its services that it provides. With the help of this analysis process, the unit report will provide information about the respective company that could help it in achieving its goals and objectives of becoming the largest and topmost telecommunication company in the marketplace.
Spark New Zealand is formerly known as Telecom New Zealand, which was established in 1987 post the division of Post office in New Zealand. The company is headquartered in Auckland. In the year 1990, the company Telecom New Zealand or Spark New Zealand turned out to be the foremost telecommunication organisation throughout the globe to be fully privatised. In the year 2014, on 8th August, the Telecom New Zealand Company changed its former name to Spark New Zealand. The company provided fixed-line mobile services, telephone services, ICT and became the major provider of internet services in New Zealand (Khan et al. 2015). The CEO of the company is Jolie Hodson, Chairperson is Mark Verbiest, and Managing Director is Simon Moutter. The company consisted of 5562 number of employees in the year 2015 and held total revenue of $3,531,000,000 in 2015. The company also provides execution, IT consulting and procurement, along with installation and equipped sales facilities, providing services through divisions like Powertel and Gen I and Xtra enabling broadband for all (Roux, 2015).
Spark New Zealand has several operating divisions that are as follows-
Under this, Spark New Zealand’s internal environments will be investigated with the application of SWOT analysis of the telecommunication company. Internal analysis process appraises Spark New Zealand company’s health by analysing its weaknesses, resource strengths concerning the quality of how it receives and sends information over fibre-optic cables, mobile services, networks, antennas and other equipment for communication at the global level. The analysis will also define external threats that could hurt or hamper the company’s business in the coming future.
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Strengths |
· High-performance cable equipment · Reputed brand name in New Zealand · Fibre optic technology with cutting edge (Hansen & Jones, 2017) · Impressive and outstanding customers services · Strong sales · Strong financial position · A wide range of services and products · Continuous innovation · Effective communication |
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Weaknesses |
· Competitive deficiency · Lacklustre sales · Cables lines that get corroded (Hansen & Jones, 2017) · Slow services |
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Threats |
· Increasing government policies and laws against telecommunication industries · Increasing competition · Sluggish economy · External treats limiting company’s success · Financial risks like interest rate issues and credits issues |
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Opportunity |
· Increasing customer interest · New Technology (Hansen & Jones, 2017) · Decreasing in competition |
Strengths will enhance the resource capabilities of the Telecommunication Company and ultimately giving a competitive advantage to the organisation in the marketplace. Company’s weakness of competitive competency could place company at risky situation if it fails to mitigate challenges of slow services and replacement of corroded cable lines causing customers to get angry and switch to other options of services from rival telecommunication companies like Vodafone New Zealand, Callplus Group and 2Degree etc. (MacMahon & Milne, 2015). Mentioned threats could limit the future of the telecommunication business of Spark New Zealand and producing hurdles for the company’s future. New rivals like Vodafone New Zealand and 2Degree could provide tougher competition to older telecommunication organisation like Spark New Zealand whereby these newer companies could get more customer base way by providing cutting-edge technology and fast services through the adoption of latest technologies like using a new range of fibre optics to speed up services and network communication rapidly.
For analysing external environment of the company, PESTEL analysis based on major four factors that include political factors, social, technological and environmental factors, has been conducted in order to identify its influence on Spark Telecommunication Company’s business operation.
Political factor
A political factor force interrupts the activity and process operations of the organisation. These factors could affect the business environment of the company in various ways. Spark New Zealand has to abide by several laws and regulations as imposed by the respective country’s government on products and services being offered by the company. They have to follow the stiff regulation of employment laws, tax guidance, safety and trade laws that could affect the business and trade market environment of the company (Grishunin & Suloeva, 2015, August). The battle against and for net neutrality is raging in the country, and customers believe data and internet should be treated same by telecommunication service providers and governments as well. Net neutrality will prevent service providers from throttling data and internet speeds.
Social factor
Safety and accessibility factors in the context of social elements have widely affected Spark New Zealand. In addition, the company must ensure the effectiveness and safety of mobile cell or phone. Interested consumers of the company desire mobile cell to be laced with common features like the internet, camera, messaging alert, instant messaging and conference call and more features that are provided by rivals (Nekrasova, Leventsov & Axionova, 2016). Spark NZ horizontal expansion is limited in the telecommunication sector as it is finding difficulty in expanding its business in rural areas of the country. Customers are given fewer options for buying mobile, television and internet packages. As telecommunication companies are monopolies, they are in charge of mobile and internet carriers. Consumers require these offers to communicate with family, friends, take-part in social-media challenges, purchase products online and search career options or more.
Technological factor
Innovation in the past few years has been playing an important role in the telecommunication sector. Because of shifting business environment, Spark NZ should ensure that its respective offered services and products are updated and have a quality standard. The management of the company is required to having the firm knowledge of customer choices and latest technology. Telecommunication company must install new fibre optic wire over corroded copper lines(de Sena Abrahão, Moriguchi & Andrade, 2016).
Environmental factors
Global warming and climate changes are affecting the process of telecommunication products in reaching its customers. About employees of the Spark NZ, they need to adapt to changes in the digital functioning of the business. Needs and demands of customers are changing rapidly. Thus, it does not guarantee which technology will be effective in the long run. Another factor that could affect the company is the emission of greenhouse gases that are emitted from the various processes in running the infrastructure. The Spark NZ must organise online communication offerings for customers around various locations in the world to enable them to be aware of the ill-effects of these gases and the CSR policies as followed by various companies to mitigate the same (Bondarenko et al. 2017).
Role of digital media and electronic marketing on the business
As the business is unable to keep balance with emerging technologies and customers’ attitudes and behaviours in the marketing landscape, the pressure is exerted more on marketing operation of business-to keep their business processes to be efficient, skilled employees and supportive technology. This situation has led companies to face challenges to keep their brands connected with customers and also to shape interaction between customers with the companies. Digital or electronic marketing includes the application of the processes, capabilities, technologies and structure to cost-effectively scale and exploit on targeting, interactivity, optimisation and personalisation of online channels (Stephen, 2016). Digital marketing operations play a crucial part in driving bottom-line development including cloud computing, iOS, windows application etc. This capability directly allows agility, speed, iterative progress, experience and responsiveness that a successful organisation requires to have in the marketplace (Paoloni et al. 2017). Electronic marketing on telecommunications business would help towards-
Digital and electronic marketing through its core communication channels like a phone call, email along with online platforms like Facebook, YouTube, Twitter, and LinkedIn etc. have increased the process of customer’s interaction and thus, providing an opportunity for businesses to publicly demonstrate their customer satisfaction standards enriching relationships with customers (Kelsey, 2015). The digital platforms provide access to every individual around the world allowing them to post their comment and views regarding any products or services provided by the company. This could have a positive as well as negative impact on influencing behaviours of customers towards brand or services/products (West, 2015). As digital marketing is largely involved with social media platforms, the active users of it believe comments and reviews on sites are more trustworthy. The companies providing data could be influential factors in determining the buying behaviours of the customers interested in products (Tiago & Veríssimo, 2014). Positive review or comments on social media pages or online sites would create positive perspective about products and services offered by telecommunications companies like Spark NZ which ultimately increases its sales, brand loyalty, financial profitability and customer’s base. Whereas, the company could consider negative responses to modify its business operations and the process of delivering products to increase better customer experience and services.
FOUR segmentation bases
Geographic: Under geographic segmentation, the company markets by considering geographic criteria that includes the major cities and it targets several regions reference to town size as well as on the basis of population density. Spark NZ focuses on marketing over 10 biggest cities in New Zealand such that to increase its products visibility. These include cities of Wellington having 490,000 people, Auckland having 1.5 million people, Hastings/Napier having 130,000 people, Hamilton having 230,000 people, Christchurch having 360,000 people, Dunedin having 120,000 people, Palmerston having 85000 people, Nelson with 65000 people and New Plymouth with 74000 number of people in the country (Spark – Investor Centre. 2018). Underpopulation density includes-
Demographic: Under this, the Spark NZ proposes to target various groups of the population including college students, corporate sectors individuals, trade and salespersons operating a business, retired, semi-employed and self-employed individuals targeting different age groups from 5 to 60+ age (Singh & Singh, 2017). The company also focuses on targeting variable dependants/family size with 0 to 5+ in number along with income groups of under NZD$8000 to NZD$10,0000 by providing them with service packs ranging from small, medium to premium services depending on their capability to buy products/services of the company.
Behavioural: Based on the observed behaviours of a customer’s behaviour, marketing segmentation is done. Under this, the Spark NZ company looking to targets customers on variables like-
Psychographic: The Company Spark NZ wishes to prefer individuals and youth population in the country residing mainly in semi-urban and urban areas. The company will focus on customers who are willing to pay much more than usual package charges for quick setup of fibre optic wire networks, ICT and mobile networks etc. under premium pay services.
Under the targeting segment profile, the Spark NZ would target-
B2C Market: Recharge plans for prepaid packages starting from $19/ four weeks to $49/ four weeks providing internet data from 1.25GB to 4GB Rollover depending on package price along with talk time of 200NZ Rollover to 500NZ Rollover per minute and text unlimited. Under the postpaid plan, it will offer package ranging from $39.99/MTH to $79.99/MTH and above with data of 1GB + 1GB Bonus to Unlimited texting and talk time for attracting more of customers base (SparkDigital – IT Services, Network, Cloud, Security & Mobility Solutions. 2018).
Product Positioning:
Conclusion
It could be concluded from the above discussions that Spark New Zealand needs to have a thorough analysis of the rapidly changing and competitive environments. There is a need that company must keep pace with changing the environment by using various platforms like digital and electronic marketing in order to increase brand visibility and allows its customers to have unparallel and exceptional services/products at a lower price than rivals. For mitigating potential challenges, the company must improve its stability in revenue development, productivity and decreased costs possible only by significant investment in mobile and telecommunication networks and decreasing fixed cost sales to become a top market leader of the mobile network in the digital era.
Reference List
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Bondarenko, T. G., Isaeva, E. A., Orekhov, S. A., & Soltakhanov, A. U. (2017). Optimization of the company strategic management system in the context of economic instability. European Research Studies, 20(2), 3.
de Sena Abrahão, R., Moriguchi, S. N., & Andrade, D. F. (2016). The intention of adoption of mobile payment: An analysis in the light of the Unified Theory of Acceptance and Use of Technology (UTAUT). RAI Revista de Administração e Inovação, 13(3), 221-230.
Grishunin, S., & Suloeva, S. (2015, August). Project is controlling in the telecommunication industry. In Conference on Smart Spaces (pp. 573-584). Springer, Cham.
Hansen, S., & Jones, N. (2017). New Zealand Telecommunications. Australian Journal of Telecommunications and the Digital Economy, 5(3).
Hardash, J., Landegger, A., Decker, B., & Thompson, V. (2015, March). Translating technology taxonomies to facilitate cross-industry innovation. In Aerospace Conference, 2015 IEEE (pp. 1-8). IEEE.Kelsey, J. (2015). Reclaiming the future: New Zealand and the global economy. Bridget Williams Books.
Kelsey, J. (2015). Reclaiming the future: New Zealand and the global economy. Bridget Williams Books.
Khan, A. I., Al-Shihi, H., Al-Khanjari, Z. A., & Sarrab, M. (2015). Mobile Learning (M-Learning) adoption in the Middle East: Lessons learned from the educationally advanced countries. Telematics and Informatics, 32(4), 909-920.
MacMahon, R., & Milner, M. (2015). Ultra-fast broadband in New Zealand: Progress accelerating. Australian Journal of Telecommunications and the Digital Economy, 3(4), 12.
Nekrasova, T., Leventsov, V., & Axionova, E. (2016). Evaluating the efficiency of investments in mobile telecommunication systems development. In Internet of Things, Smart Spaces, and Next Generation Networks and Systems (pp. 741-751). Springer, Cham.
Paoloni, C., Magne, F., Andre, F., Begaud, X., Krozer, V., Marilier, M., … & Zimmerman, R. (2017). TWEETHER Future Generation W-band backhaul and access network infrastructure and technology.
Pringle, T. (2015). Ovum forecasts big data software to grow by 50%. Ovum [Pressemitteilung]. Retrieved August 23, 2015.
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Singh, I., & Singh, S. (2017). Framework for targeting high-value customers and potential churn customers in telecom using big data analytics. International Journal of Education and Management Engineering, 7(1), 36-45.
Spark – Investor Centre. (2018). Retrieved from https://investors.sparknz.co.nz/Investor-Centre/?page=At-a-Glance
Spark Digital – IT Services, Network, Cloud, Security & Mobility Solutions. (2018). Retrieved from https://www.sparkdigital.co.nz/
Spark Foundation. (2018). Retrieved from https://www.sparknz.co.nz/what-matters/foundation
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Tiago, M. T. P. M. B., & Veríssimo, J. M. C. (2014). Digital marketing and social media: Why bother?. Business Horizons, 57(6), 703-708.
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