Strategic Management - Assignment PDF

Strategic Management Report
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Executive Summary
The report provided below allows in the identification of various strategies that is being used
by the organisation named Ooredo Oman. This is one of the prominent telecommunication
company in the middle east. The report led to the identification of the current and future
market trends and the impact of internal and external factors on the proper functioning of the
organisation. There is also a possibility that the organisation has been able to gain substantial
amount of attention for being customer centric and for introducing diversified product
portfolio. In addition, the company also focused on the importance of generic strategies and
the application of Ansoff Matrix to gain a proper understanding of the performance.
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Table of Contents
Executive Summary...................................................................................................................1
1. Introduction............................................................................................................................3
2. Situational Analysis...............................................................................................................3
2.1 External Analysis.................................................................................................................3
2.2 Internal Analysis..............................................................................................................5
3. Current and Future Trends.....................................................................................................6
4. Competitive Analysis.............................................................................................................7
4.1 Porter’s five forces...........................................................................................................7
5. Resourced-based View...........................................................................................................8
6. Application of Ansoff Matrix.................................................................................................9
7. Vertical Integration..............................................................................................................10
8. Business Strategies...............................................................................................................10
8.1 Porter’s Generic Strategies.............................................................................................10
8.2 Cooperative Strategy......................................................................................................11
9. Evaluation of Strategy..........................................................................................................12
9.1 Evaluation of Corporate Strategy...................................................................................12
9.2 Selection and Evaluation of Business Strategy..............................................................13
10. Conclusion and Recommendations....................................................................................14
10.1 Recommendation..........................................................................................................14
10.2 Conclusion....................................................................................................................15
Reference List..........................................................................................................................16
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1. Introduction
The idea of strategic management can be addressed as one of the integral concepts that allow
in the continuous planning, monitoring, analysis and assessment of every aspect that is
essential for an organisation to meet its overall aims and objectives (Wheelen et al., 2017).
The purpose of this assessment is to ensure that proper analysis has been conducted on the
industry that the organisation Ooredo Oman operates in. The report provided below intends to
cover the initial aspects of strategic management that allows an organisation to function
effectively. Ooredo Oman is mainly a telecommunications service provider who is
prominently known for providing Muscat’s finest communication services and offers great
value and substantial amount of service and excellent quality that generates them adequate
amount of customer satisfaction. The report conducted below would completely focus on the
importance of conducting a situational analysis and the kind of business or generic strategies
that would be considered by the company.
2. Situational Analysis
2.1 External Analysis
The external analysis can also be considered as the macro-environmental factors comprising
of some of the important aspects that has the tendency to impact the functioning of an
organisations. These external factors comprise of various kinds of attributes and have
substantial amount of association with the legislative structure of an organisation allowing
them to influence the decision-making process of an organisation (Chai, 2017). The macro-
environmental factors comprise of political, economic, social, technological, legal and
environmental. The table provided below generates a better insight of the environment that
the company is operating in.
Macro-Environmental Factors Analysis
Political The company enjoys substantial amount of
political support and financial patronage
from the government but the political
uncertainty of the country continues to pose
threat for the country in terms of multiple
situations (Halpern, 2015).
Economic The economic situation of Oman has not
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been considered favourable mainly due to
the fact that there has been a decrease in the
oil price that is affecting the GDP of the
country. Since, most of the major businesses
are of oil so there is a chance that factors
such as the disposable income, inflation,
recession, economic growth might be
impacted and Ooredo might not be able to
gain enough customers.
Social There has been a substantial amount of
increase in the existence of expatriate
population that has decreased the efficiency
of the organisation (Meriwether, 2018).
However, understanding the
telecommunication needs of the population
would allow the company to function better.
Technology The substantial amount of cloud and IoT
services have opened up various
opportunities for the people and the
company. The company ensures that they
are able to invest an adequate sum of money
for their research and development. The
company has also initiated the idea of
undersea cable thus maintaining their
technological innovation.
Legal The fundamental regulatory changes would
allow in affecting the functioning of the
company. The frequent changes make it
difficult for the company to cope up with
the obstacles of their regulations and the
legislative structures. Also, the protection of
the intellectual property of the company
cannot be assured as well.
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Environmental The company understands the importance of
environment and ensures that he has
generated substantial amount of information
to focus on innovative energy to mitigate
the impact of the environmental impact and
their interests on smart technologies also
allows them to gain some of the
environmental benefits (Held, 2018).
Table 1: PESTLE analysis of Ooredo Oman
(Source: Created by the learner)
2.2 Internal Analysis
Conducting an internal analysis is considered as an important aspect of a strategy that allows
an organisation to gain substantial amount of information on the understanding of the internal
capabilities of an organisation (Rothaermel, 2015). The SWOT analysis provided below
would allow having a substantial amount of idea regarding the capability of the organisation:
Strengths
 The company has a strong brand value and tends to perform better with a strong
liquidity profile as well. The company has encountered substantial amount of growth
in the past six years and makes sure that they have managed to perform effectively in
their 12 international markets (Samuel and Sarprasatha, 2016)
 The company is the market leader in Qatar and in Oman as well and they provide best
offerings compared to their regional and global competitors. The company continues
to work on the revenue models that comprise of mobility offerings, broadband
solutions, digital ecosystems and fibre technologies
 The company has a strong presence in two of the most prominent cities in the world
such as Indonesia and Myanmar. The company encountered a growth in their
subscribers by 80.5 million in combination (Samuel, 2017)
Weaknesses
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 The company has a long overdue debt after the issuance of the bonds, implying that
the company might not be able to function properly in the markets effectively, until
they have solved this discrepancy
 The political instances of majority of the countries they are operating tend to create
havoc to develop control over a Middle-East based country. They also have a
tendency to impact the business functioning of the organisation
Opportunities
 The launch of the 4K TV poses as a great opportunity for the company to initiate tis
business services in some other segment. This particular service provided by the
company comes with no particular upfront or device fees and provides them with
unlimited access to digital content. The company has substantial amount of scope for
expanding this service and earn profit in the existing 12 cities they are operating in
 The association with the major sporting events also allows the company to gain
substantial amount of the popularity and encourage their performance as a global
entity. The FIFA world cup that is to be held in the year of 2022 poses as a major
opportunity for the company to continue increase their customer base (Tobal, 2014)
 The telecommunications industry has the tendency to deal with challenges every now
and then to initiate the incorporation of new technology, thus, implying that there is
always going to be a persistent demand for capital investment. The company can
attract decent amount of good venture capital for their growth and development
Threats
 The business environment is very challenging and the unstable political situation of
some of the major markets of the company poses as a great threat for their business
operations. Some of the markets comprise of names such as Iraq, Tunisia and
Palestine
 Terrorist attacks in Europe and the political instability in the Middle East region has
prompted the company to be acquainted with the geo-political risks that has a
tendency to dampen the investment chances
 The company’s success completely depends on the economy of Qatar and Oman,
which in turn is entirely dependent on the oil prices that has been considered quite
volatile in the recent scenario
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3. Current and Future Trends
In the current scenario, it has been identified that the telecommunications industry has been
subjected to numerous kinds of technological and environmental discrepancy. It is evident
that the company would be likely to accustom something similar to that in the future as well.
The current trends in the telecommunications industry comprise of the extensive amount of
operations in terms of technological advancements that would permit the company to
function better in the market. The current trends comprise of the connecting of IoT (Loo et
al., 2016). The IoT has turned out to be an ecosystem of the electronic or the
telecommunications industry. The use of cloud computing and carrier grade Wi-Fi also
allows the companies to function effectively in the current industry.
It has also been identified that by the year 2021, the telecommunications industry would be
accustomed to certain amount of changes that would allow them to function better and ensure
their advancement in this particular industry (Bennett and James, 2017). Some of the
important future trends that has been identified are as follows:
 Premium availability of content and cross industry alliances, mainly with the
companies that produce entertainment content
 The telecom giants would be completely successful in launching 5G, which has the
tendency to detach the network infrastructure, thus, welcoming new possibilities
 Machine learning and the extensive use of artificial intelligence would allow the
telecoms to make sure that they are able to conduct back office operations and trivial
customer interactions in a very convenient manner
 The idea of in-flight connectivity has garnered popularity among the telecom industry
and it is also considered as a game changer for the airline companies. It is because the
customers have shown credibility towards the use of smartphone when choosing an
airline
4. Competitive Analysis
4.1 Porter’s five forces
The use of Porter’s five forces would allow in the better understanding of the nature of
competition that exists in the telecom industry in Middle East. It was evident to gain an
understanding of the impact of the international companies on their operations and also
focused on their global expansion strategy, but it is also essential to understand the
importance of the existing competitors in this particular market.
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Threat of the New Entrants
The threat of the new entries in the Oman telecommunications industry has been considered
low because of the fact that it is identified to be one of the most capital concentrated sector of
the Middle East. Also, it is mandatory for the firms to generate licenses from the PTA, that is
being considered extremely expensive and time-consuming, it can be said that it would be
difficult for any new company to initiate a venture with substantial amount of capital
(Coussement et al., 2017). There are also other prominent reasons for the threat of new
competitors as there are extreme government restrictions, telecom licenses issues and high
fixed costs as well.
Bargaining Power of the Suppliers
The bargaining power of the suppliers has been considered low because there is already an
existence of intense competition between the firms and the foreign suppliers. The suppliers
most of the time maintain a long term and flexible behaviour with their customers to make
sure that they have the capacity to be their facilitator for a substantial amount of time. There
is also a high availability of substitute inputs that do not permit the suppliers to make any
kind of demands.
Bargaining Power of the buyers
The bargaining power of the buyers is relatively high in this situation because there is
extensive amount of possibilities that the people would have the opportunity to switch to any
other substitute product and make sure that they have adequate amount of options to choose
from, especially in this segment.
Threat of the substitutes
The threat of the substitutes has been considered high in this situation because of the fact that
the customers would be willing to make reliable changes in their options if they are not
satisfied with the extent of operations provided by them (Mounier, 2017). They would be
willing to switch to another product and ensure that the new product chosen has higher
amount of technological advancements.
Competitive Rivalry
The rivalry among the competitors is considered high and intense. It is convenient to address
there is a necessity among the people to make sure that they are able to enhance their
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competitive advantage by encouraging the idea of technological advancements. It can also be
said that the extent of rivalry is intense because of the new firms introducing price cuts
options for their operations.
5. Resourced-based View
If the resource based view of the company is considered, then it can be said that they have an
adequate and professional relationship with their suppliers and have managed to gain a
competitive dominance in the industry as well. However, it is also important to consider that
the resources perceived by an organisation at the initial stage might not be the kind that
aspires for achieving the integral goals and objectives of an organisation. For instance, in the
situation of recruiting a skilled professional, there is a possibility of the individual being
talented or beneficial but would not be willing to compromise or work profoundly with the
others. The company has substantial amount of human resources as it employs about 17000
individuals and offers trending technologies as well (Levi-Faur, 2018). The human capital
and the research and development team of the organisation are content towards generating
competitive personnel and encourage the initiation of new products in the market. The
company also has substantial amount of international presence in North Africa and Southeast
Asia markets.
6. Application of Ansoff Matrix
The application of the strategic planning tool such as Ansoff matrix allows in the
identification of the corporate strategies that could be considered useful by the organisation
for consideration of their future growth and development agenda. All the four would be
evaluated of the possibilities it could provide for the functioning of the company but at the
same time, would result in the selection of one that enhance the functioning of the
organisation.
Market Penetration Strategy
The company has incorporated the idea of market penetration in the existing countries it is
operating in, so it can be said that in the context of the existing performance of the company
in some of the prominent companies they have been able to provide the best of their services
and gain substantial amount of customer attention (Moutinho and Phillips, 2018). The
company has also initiated other line of products from their company but the electronics
items have not gained enough amount of attention from the customers as their
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telecommunications services have. However, the company has managed to spread across
certain markets around the world.
Product Development Strategy
The company introduced new products and has also proposed the idea of introducing 5G
services by the end of 2021, thus it can be addressed that the company might not have
garnered appraisal in their electronics services but have managed to expand their operations
overseas, initiating the idea that they might be inclined to expanding their electronics services
to the other countries. In the course of the year the company might be interested in expanding
their operations overseas.
Market Development Strategy
As a part of the market development strategy of the organisation it has been identified that the
company has an expert team of marketing professionals who have ensured that the company
is already the market leader in some of their overseas operations (Kaar and Stary, 2018). The
company is the market leader in their home nation and are considered prominent faces
overseas as well. Even after gaining substantial amount of popularity the company has not
been able to garner followers for their electronics products and at the same time would be
initiating 5G services that are questioning the interference level of the customers.
Diversification strategy
The company is prominently known for dealing with substantial amount of technological
advances and is also known for initiating technological forces by themselves. The
organisation intends to make sure that they have a complete control over the retailers and the
suppliers as it would allow them to gain a market status and ensure that they are able to avoid
discrepancies associated with the idea of over production as well. However, the company’s
interest in other prominent devices or businesses associated with the telecommunications
industry makes the organisation more prone to the idea of diversification strategy.
7. Vertical Integration
Vertical integration is mainly defined as the strategy that is mainly used to make sure that
multiple companies have the ability to gain control over their industry’s value chain. Being
the market dominator of the telecommunications industry in UK, it can be said that the
company has been accredited enough with the idea of an effective supply chain management
(Adhikari, 2017). Also, it has been identified that the company has not been able to maintain
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a proper relationship management with the supply chain mangers, the reason why the
company had not been able to gain enough success in collaborating with the suppliers for the
effective functioning of the organisation.
8. Business Strategies
8.1 Porter’s Generic Strategies
The use of Porter’s generic strategies allows in the proper identification of the proper ideas
that allow the organisation to function better in an organisation. If the idea of Ooredo Oman
is to be considered, then it can be said that the company has managed to gain substantial
amount of dominance in their home nation but there is a possibility that they might not be
able to get enough amount of attention from the competitors overseas.
Cost leadership Strategy
The cost leadership strategy is well known for gaining competitive advantage with the help of
lower costs. Here, the primary focus of the company is intended towards charging low costs
that would eventually lead up to the point of the businesses charging low prices for their
products and services (Liu and Atuahene-Gima, 2018). It is evident that the company needs
to enhance its focus towards their relationship with the suppliers in an appropriate manner
and develop a partnership with them to make sure that they are able to function effectively in
the industry.
Differentiation Strategies
The product differentiation strategy can be considered as critical for any organisation
belonging to any industry. In the case of a telecommunication sector, the product
differentiations strategy is considered than usual and it can be said that due to the
unavailability of wide range of options the companies fail to understand the needs of the
customers. In the case of Ooredo Oman it can be said that the company is willing to initiate
the 5G services very soon but there is a possibility that the company might not be able to
garner the attention of the customers on a massive rate at the global scale as most of the
population would be entitled to shift their attention towards their home brands instead of the
international ones.
Focus Strategy
The idea of focus strategy mainly encourages the essence of the understanding of the needs
and requirements of the target market of the organisation. It can be evidently stated that the
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people are mainly inclined towards the proper understanding of the ability if an organisation
possesses to understand their daily devoir and make sure that certain initiatives is being taken
to eradicate the issue (Dodgson, 2018). Ooredo Oman is highly content towards helping the
people with their products but it is not possible to cover their needs every time.
8.2 Cooperative Strategy
The idea of cooperative strategy mainly involves engaging into a joint venture or into a
collaboration with a company of similar or different industry to achieve a common
organisational goal. There are multiple companies who have initiated the idea of cooperatives
strategies to make sure that the people are able to address the importance of gaining
substantial amount of profit in the market. Ooredo has exchanged strategic cooperation
agreement with the company named Huawei earlier and in the recent scenario, the company
extended their contract for 5 years more (Heracleous and Werres, 2016). This agreement
allows both the companies to collaborate in ensuring the use of advanced services that would
eventually allow in the proper establishment of a workplace scenario for the company.
9. Evaluation of Strategy
9.1 Evaluation of Corporate Strategy
The evaluation of the corporate strategies and the business strategies can be conducted
properly with the application of the SAF model. It is essential that the strategies have been
able to fulfil the criteria of the SAF to determine the success rate of the strategies.
Strategies Suitability Acceptability Feasibility
Market Penetration The idea of market
penetration has been
considered suitable
by the company and
would allow them to
function better in the
industry
The company is
engaged towards
improving their sales
and target but the
regulations of the
other countries binds
them of their
operations and duty
to perform
effectively. Also the
company encounters
substantial amount
This strategy can be
easily implemented
as it has been
expected that there is
a possibility of
conducting proper
promotional
activities due to the
availability of
resources and viable
assets of the
organisation.
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of growth by the end
of the year.
Product
Development
The company can
exploit their R&D
department to the
fullest and come up
with the idea of the
proper
implementation of
the 5G services plan
and gain the
understanding of the
customers on the
same
There is a possibility
that the key
stakeholders of the
organisation would
be benefited from it.
The implementation
of the strategy is
considered not very
difficult due to the
availability of
creative minds and
viable assets
Market
Development
It is suitable for the
company to expand
in some of the
prominent countries
or they can form
collaborations with
the already existing
ones for the benefit
of the firm
There are substantial
amount of risks
involved but the
company would be
prone to success at a
certain rate
This would require
extreme amount of
research and
licensing efforts
Diversification There is a very less
possibility of the
idea of
diversification
because of the
product portfolio of
the company, which
is similar to majority
of the companies.
The stakeholders
might also deny its
need in their lives
The development of
this strategy will not
be easy for the
company.
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Table 1: Evaluation of the Ansoff Matrix
(Source: Created by the learner)
9.2 Selection and Evaluation of Business Strategy
Strategies Suitability Acceptability Feasibility
Cost –leadership
strategy
It is considered
suitable and
effective for the
business of Ooredoo
The customers will
also be pleased from
the strategies and the
initiatives
undertaken by the
organisation
It can be identified
as feasible and can
be achieved by the
organisation
effectively
Differentiation
strategy
In the case of
Ooredoo, the
differentiation
strategy has a very
less possibility of
working due to the
product portfolio of
the company
It is an achievable
strategy but the
success rate cannot
be guaranteed
This would be
considered costly for
the functioning of
the product and
would also be
difficult in the
implementation of
the strategies
Focus strategy This can be
considered suitable
for the customers as
they would be
permitted to make
their products highly
customer centric
This is achievable
and would entirely
focus on the
necessities of the
consumers
The results would be
witnessed in the long
term and being
customer centric
would earn them
more profitable
returns
Cooperative Strategy It is suitable for the
company as it allows
them to gain insight
of the external
operations. The
venture with Huawei
has turned out to be
successful for the
It is acceptable to
work among cross
cultures as both the
companies are
gaining benefits
from this
The results will also
be witnessed in the
long term and would
be considered as
profitable.
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company
Table 2: Evaluation of the Generic strategies and the cooperative strategy
(Source: Created by the learner)
10. Conclusion and Recommendations
10.1 Recommendation
The assignment led to the better understanding of the aspects that allow the company Ooredo
to function effectively in the market. However, due to the unavailability of certain product
ranges, the company fails to garner the attention of the customers on a significant level. Thus,
it is important to notice that the organisation must acquire certain amount of suggestions for
their better strategic performances in the future. The company can initiate the idea of
enhancing their product portfolio and explore the possibilities of gaining substantial amount
of idea regarding the possible changes or the alterations that can be initiated. The company
can also go on to explore their possibilities making advancements in their electronic services
for the better operations of their product line. Also, the company can take the initiative to
incur the idea of extreme amount of joint collaboration with the international giants to make
sure that they are able to function better in the market.
10.2 Conclusion
The report provided above focused on the importance of strategic analysis of an organisation.
The organisation chosen was Ooredo Oman, which was a Middle East based
telecommunications company and was widely popular as the market leader in their respective
nation. The report provided substantial amount of knowledge regarding the various aspects
associated with the situational analysis and how this has a tendency to impact the
performance of the company. In addition, the report also focused on the current and possible
future trends of this industry that should be considered by the organisation for the benefit in
their business. Further it can be said that the organisation would be capable enough to witness
the fact they have engaged in a proper collaboration strategy with a prominent company for
the better functioning of their organisation. Further, it can also be added that the company has
certain amount of possibility to engage into an idea of diversified and customer-centric
services that would earn them reputation in the market.
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