Discuss about the concept of market competition and the various effective strategies.
Competition forms an important part of the business world in the present times. It is significant to note that the advent of globalization and the advancement of technology and the latest innovations have drastically transformed the way the various business organizations conduct their business (Campbell, Coff and Kryscynski 2012). Thus, it is often seen that the various business organizations take the help of the diverse analytical tools to analyze the market condition and also to get an idea of the level of competition faced by them (Campbell, Coff and Kryscynski 2012). The analysis of the market condition and the competition faced by the various business organizations not only gives them an idea of the level of competition faced by them but also helps them to devise effective strategies for their mitigation (Campbell, Coff and Kryscynski 2012). Thus, it can be said that effective competitive strategies help the various business organizations to bring about their overall growth as well as development. This report will provide an overview of the market competition faced by the company Telecom Italia and their digital media strategies.
The company Telecom Italia was formed in the year 1994 “by the merger of several state-owned telecommunications companies, the most important of which was Società Italiana per l’Esercizio Telefonico p.A., (known as SIP, from the earlier Società Idroelettrica Piemontese), the former state monopoly telephone operator in Italy” (Telecomitalia.com 2018). The company is one of the leading telecom service providers in the nation of Italy. Furthermore, in the stock exchange market the company trades under the name of Borsa Italiana (Telecomitalia.com 2018). Although the major business of the company is centered in the nation of Italy yet the business organization also provides services to the customers of Brazil through the help of “TIM subsidiary, (TIM Brasil)”(Telecomitalia.com 2018). The company not only provides landline phone services to the citizens of the nation of Italy but also provides broadband services, “mobile services in Italy, GSM mobile phone services in Italy” (Telecomitalia.com 2018). In a bid to enhance its international reputation and also with the inherent aim to expand its business to the other nations of the world the company in the year subscribed to the “United Nations corporate responsibility initiative Global Compact”. The company has been a leading champion of the environmental as well as social issues of the nation and it is a reflection of this that the company “on June 2014 it signed an agreement with A2A to buy energy only from renewable sources” (Telecomitalia.com 2018). The company as “per a 2018 statistics was the 300th largest company in the world in terms of the net revenue generated by it on a yearly basis” (Forbes.com. 2018). It is significant to note that for the year 2017 the net revenue of the company was “$18.1 billion” (Forbes.com. 2018). Some of the financial statistics of the company are provided by the below given figure-
Figure 1: Financial statistics of the company Telecom Italia
Source: “Factset, Bloomberg, S&P Cap IQ; Forbes”
The most commonly used framework to analyze the market competition faced by a particular business organization is the “Porter’s five forces model” (Wagner and Hollenbeck 2014). An analysis of the company on the basis of this particular framework would reveal the following facts-
The company Telecom Italia is “one of the leading telecom companies” of the nation of Italy. The company has been in business for around two decades and the profit margin of the company has been increasingly steadily (Telecomitalia.com 2018). Thus, it can be said that “the company faces a minimum amount of threat from the new entrants” in the telecom market of the nation of Italy (Wagner and Hollenbeck 2014).
It is significant to note that there are many business organizations in the nation of Italy related to the telecom industry. However, the company Telecom Italia has a very stable customer base and some of the offers provided by this particular company are very unique as well as attracting (Telecomitalia.com 2018). Therefore, “it would be apt to say that that the company” faces a very low amount of risk from the various substitute companies which are available in the market.
In the opinion of Porter, “if the bargaining power of the buyers is high then that is likely to hurt the prospects of the company in a negative manner” (Barney 2014). It is significant to note that “the switching over cost for the customers who are subscribers to the services provided by this particular company is very high” (Saeidi et al 2015). It is to be noted that the customers of this particular company need to take a subscription which lasts for approximately either three or six or twelve months (Telecomitalia.com 2018). Moreover, the services provided by this particular company are comparatively cheaper than the same services provided by the other business organizations in the nation of Italy (Saeidi et al 2015). Therefore, it would be apt to say that the bargaining power of the customers is very low.
The suppliers of the company Telecom Italia are the various technicians, software developers, IT service providers and others. It is generally seen that “if the bargaining power of the various suppliers related to a particular business is high then that is likely to hurt the prospects of the business organization concerned in a negative manner” (Barney 2014). It is significant to note that “the company under consideration here takes the help of multiple suppliers” and this helps the company to reduce the bargaining power of its various suppliers in a significant manner (Telecomitalia.com 2018).
It is significant to note that the company faces a significant amount of rivalry as well as competition from the various companies in the nation of Italy operating in the same industry. The company uses various effective strategies in a bid to reduce the amount of competition faced by it. One of the most significant strategies used by the company to reduce the level of competition faced by it is the policy of price competition (Saeidi et al 2015).
The customers as already mentioned form the most important part of the various business organization (Sigala, Christou and Gretzel 2012). Therefore, the primary focus of the various businesses is on the fulfillment of the various needs as well as the requirement of the customers (Sigala, Christou and Gretzel 2012). It is significant to note that most of the customers of the company concerned are a regular part of the organization and have a subscription of at least three or six or twelve months (Telecomitalia.com 2018). Therefore, the “satisfaction of the needs as well as the requirements of the customers” becomes of paramount significance (Sigala, Christou and Gretzel 2012). However, a recent survey indicates that most of the existing customers of the concerned business organization are satisfied with the services provided by the company concerned and have given the company a very high rating based on the quality of the services provided by them (Telecomitalia.com 2018). This it can be said that customer satisfaction forms one of the key points of the company under consideration here.
The proposed for the company for the upcoming one year will be to expand its business all over the nation of Italy and also to enhance its customer base in a significant manner. The company currently is facing a significant amount of competition from its various other competitors in the same industry and with the introduction of latest technology as well as innovations the business of the concerned business organization has got affected in a significant manner (Kirchmer 2012). Therefore, in the next one year the company should focus on the expansion of its business in a significant manner by outrivaling its existing competitors within the same industry and also to increase the number of customers which it currently has.
The company can enhance its current business and also the number which it currently has by taking the help of effective marketing strategies. This can be done by taking the help of the various platforms offered by the electronic media (He, Zha and Li 2013). The company should try to enhance its presence over the social media and also other means of promotion over the social media (He, Zha and Li 2013). It is significant to note that in the present times the various platforms of the social media has emerged as one of the most popular mediums of promotion and thus the various companies often take the help of the platforms offered by the social media to reach out to a greater number of people (Ribarsky, Wang and Dou 2014). It is to be noted that “in the present times the various customers get influenced by the reviews as well as the promotions which the various companies post over the social media” (Ribarsky, Wang and Dou 2014). Therefore, the company under discussion here should enhance its presence over the social media in a bid to improve its prospects and also to achieve the desired goals set by it (Ribarsky, Wang and Dou 2014). This will require the company to create brand pages and also various official pages related to the company where the various customers will be able to know about the services provided by the company and will also be able to compare the services as well as the prices of the services offered by the company with the services as well as the prices offered by the other companies or the business organizations (Ribarsky, Wang and Dou 2014). The company can also take the help of the various social media like Facebook, Twitter and others (Teixeira et al. 2012). In addition to this, the company can also take the help of the various promotional events to promote the services offered by them (McGrath 2013).
The budget incurred by the company will be very nominal as the various social media platforms are free of cost and the only cost that the company will have to bear is the cost of the internet and other resources which will be required for the creation for the web pages necessary to promote the various services provided by the company (McGrath 2013). The company can also take the help of the various newspapers as well as the digital forms of advertisements (Schilke 2014). However, this is likely to cost the company a significant amount of money as the cost of advertising in the digital platforms is very high (Schilke 2014).
The company in a bid to enhance its prospects can take the help of various measures like taking the help of various platforms offered by the social media. The company can also take the help of advertisements to reach out to a larger number people. Furthermore, to reduce the amount of competition faced by it the company can also take the help of the recent innovations as well as technologies. This will help the company under discussion to reach out to a larger number of customers and a chance to increase the amount of profit gained by it.
Conclusion
To conclude, the various business organizations in the present times face a greater amount of competition in the business market. This is generally considered to be a reflection of the concept of globalization and the advancement in the field of technology as well as innovation. It is significant “to note that the various business organizations in the present times” take the help of the various marketing analysis tools to analyze the level of competition faced by them and also to devise effective strategies for the mitigation of the competition faced by them. Moreover, another trend which is commonly seen among the various business organizations is that they tend to take the help of the various platforms offered by the social media in a bid to reach out to a greater number of people.
References
Barney, J.B., 2014. Gaining and sustaining competitive advantage. Pearson higher ed.
Best, R., 2012. Market-based management. Pearson Higher Ed.
Campbell, B.A., Coff, R. and Kryscynski, D., 2012. Rethinking sustained competitive advantage from human capital. Academy of Management Review, 37(3), pp.376-395.
Forbes.com. 2018. Forbes Welcome. [online] Available at: https://www.forbes.com/companies/telecom-italia/ [Accessed 13 Apr. 2018].
He, W., Zha, S. and Li, L., 2013. Social media competitive analysis and text mining: A case study in the pizza industry. International Journal of Information Management, 33(3), pp.464-472.
Kirchmer, M., 2012. Business process oriented implementation of standard software: how to achieve competitive advantage efficiently and effectively. Springer Science & Business Media.
McGrath, R.G., 2013. The end of competitive advantage: How to keep your strategy moving as fast as your business. Harvard Business Review Press.
Ribarsky, W., Wang, D.X. and Dou, W., 2014. Social media analytics for competitive advantage. Computers & Graphics, 38, pp.328-331.
Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of Business Research, 68(2), pp.341-350.
Schilke, O., 2014. On the contingent value of dynamic capabilities for competitive advantage: The nonlinear moderating effect of environmental dynamism. Strategic management journal, 35(2), pp.179-203.
Sigala, M., Christou, E. and Gretzel, U. eds., 2012. Social media in travel, tourism and hospitality: Theory, practice and cases. Ashgate Publishing, Ltd..
Teixeira, J., Patrício, L., Nunes, N.J., Nóbrega, L., Fisk, R.P. and Constantine, L., 2012. Customer experience modeling: from customer experience to service design. Journal of Service Management, 23(3), pp.362-376.
Telecomitalia.com 2018. Telecomitalia.com [online] Available at: https://www.telecomitalia.com/tit/en.html. [Accessed 13 Apr. 2018
Wagner III, J.A. and Hollenbeck, J.R., 2014. Organizational behavior: Securing competitive advantage. Routledg
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