Saudi Telecom Company: Market Development and Financial Strategy

SUPPLY CHAIN
STRATEGIC AND OPERATIONS
MANAGEMENT OF STC

Is the company trying to develop new products for
existing markets or new markets? Can it be
described as market penetration or market
saturation, focused on market pull or market
push?
The market development strategy followed by the
Saudi Telecom Company is to work on product
development as well as market development
strategies. This is because, they are introducing
financial services, digital contents along with
various other information technology for their
clients
Saudi Telecom Company is also focusing on
acquisition by merging policy as they acquired
various companies in 9 different countries around
the world. These include, Malaysia's Binariang,
India's Aircel, Indonesia's Axis and many others.
This will help the company to provide its
telecommunication services in foreign markets.

Is it trying to extend its product life cycle or
extend its brand? What are its distribution and
pricing strategies? Is it using skim pricing,
penetration pricing or dynamic pricing?
The company is following the strategy of market penetration
because, they are initiating newer services which are national
market centered. More the advancement of new services, the
more market penetration for the company (Bharadwaj
et al.
2013).
Saudi Telecom Company is focused on extending the company's
brands as a telecom services that is traditional, the company is at
its mature stage where there aren't any new opportunities left.
The company is following the pricing strategy of penetration
pricing due to which it has the Saudi Arabian government as a
major shareholder. As a result, social objective of cover the
whole region with their services gets more preference than
others.

What is the firm’s financial strategy? Is it using
equity financing or debt financing? Is it using
dividends or striving to achieve stock price
appreciation? Could it benefit from an LBO, MBO,
stock splits or stock buyback?
The way by which Saudi Telecom is managing the company can be distinguished that they are
following the cash flow financial planning. Although it needs to be acknowledged that Saudi
Telecom Company has strong financial backbone because they seem to be financially stable in
the country. But there are risks that they can face in case of financial breakdown or some
unwarranted events. It should be noted that the Saudi Telecom will not get any kind of benefit
from LBO because selling of their stock and assets will only help in gaining capital but in return
their presence in the national as well as international market will diminish.
Saudi Telecom can use the policy of stock buy back as initiating the stock buyback when the
company is running through a stable phase will reassure the return of the stock in much higher
price (Kang and Montoya, 2014). This will also help to grab the attention of investors thus
ensuring higher flow of capital. On the other side stock splits can also be beneficial as it involves
much higher risks.