Saudi Telecom Company's Market Development and Product Development Strategies
Added on 2023-01-19
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What is the firm’s market development strategy? 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? 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 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
As stated by the CEO of Saudi Telecom Company, these new services being designed in the the
company are going to be utilized not for foreign markets but for natural region. It is clear that the
company is following product development strategies. 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.
Thus, it is seen that the company is following both, market development and product
development strategies.
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). Additionally, these strategies are
based on push factors with investments in promotional campaigns and programs for customer
awareness.
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. Therefore, brand extension is being focused on which includes new services like the system
of online payment. According to Butler et al. (2014), extending its brand is also beneficial for the
company as for adjusting associated risks in the life cycle diminishing of traditional
telecommunication services.
products for existing markets or new markets? Can it be described as market penetration
or market saturation, focused on market pull or market push? 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 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
As stated by the CEO of Saudi Telecom Company, these new services being designed in the the
company are going to be utilized not for foreign markets but for natural region. It is clear that the
company is following product development strategies. 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.
Thus, it is seen that the company is following both, market development and product
development strategies.
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). Additionally, these strategies are
based on push factors with investments in promotional campaigns and programs for customer
awareness.
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. Therefore, brand extension is being focused on which includes new services like the system
of online payment. According to Butler et al. (2014), extending its brand is also beneficial for the
company as for adjusting associated risks in the life cycle diminishing of traditional
telecommunication services.
2RESEARCH ESSAY
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. Strategy of competitive
pricing is being offered by them under penetration pricing that helps to cater to the market across
users with various income levels (Dutta et al. 2017). Distribution strategy of extensive
distribution is taken up by the company that is complementary to their penetration strategy.
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. Jackson et al. (2014) mentioned it is also very common that cash flow
planning is very risky to deal with especially it can even lead to insolvency if there is inaccuracy
in forecasting the financial outcome. Moreover Saudi Telecom is a publicly traded company
which follows the equity based financing and it gets their revenues from IPO. It was also noted
from a report that this company is using dividends in order to achieve the stock price
appreciation. They are doing good business in Saudi Arabia and the dividend yield for Saudi
Telecom is growing in a good pace. 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.
However 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. According to stock splits the current share holders will be given new shares as
per their holdings. This can be a safe practice as the shareholders are already trust worthy.
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. Strategy of competitive
pricing is being offered by them under penetration pricing that helps to cater to the market across
users with various income levels (Dutta et al. 2017). Distribution strategy of extensive
distribution is taken up by the company that is complementary to their penetration strategy.
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. Jackson et al. (2014) mentioned it is also very common that cash flow
planning is very risky to deal with especially it can even lead to insolvency if there is inaccuracy
in forecasting the financial outcome. Moreover Saudi Telecom is a publicly traded company
which follows the equity based financing and it gets their revenues from IPO. It was also noted
from a report that this company is using dividends in order to achieve the stock price
appreciation. They are doing good business in Saudi Arabia and the dividend yield for Saudi
Telecom is growing in a good pace. 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.
However 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. According to stock splits the current share holders will be given new shares as
per their holdings. This can be a safe practice as the shareholders are already trust worthy.
3RESEARCH ESSAY
What is the firm’s R & D strategy? Is it focused on exploration or exploitation? Is it
striving for technological leadership? Is it using imitation or open innovation?
Developing new services is the key strategy of the R&D department of the Saudi Telecom. This
strategy helped them to launch an array of new services in the market helping the organization to
explore the unexplored market and fulfilling the expectation of the customers of Saudi Arabia.
There are constant changes in the market which shifts the demands of the customers and also
helps to motivate Saudi Telecom Company in launching new services (Wuyts and Dutta, 2014).
During the initial days the main service providing by the organization is just traditional
telecommunications. But later with the changes in demand the Saudi Telecom Company started
providing internet connection and later started with the financial offerings. This changes in
services helped them to stay in the competitive market. Thus it can be easily identified that Saudi
Telecom Company generally gives their more focus on exploration and innovation. Presently
there are several competitions in the market such as Zain, Virgin Mobile etc. and in order to
establish the technological dominance Saudi Telecom is trying to start up the very first 5G
services in Saudi Arabia and thus they will be the very first one to start up with the 5G services
all across the country. Thus if they can be the first one to start up the 5G services then they will
have a huge dominance in the Telecom industry and just might prove themselves to be the leader
of telecom service providing brand in Saudi Arabia. They are also following open innovation
because they are not putting forward some new innovation or any kind of distinctive innovation
rather in this case this innovation is very much common (Jahre and Fabbe-Costes, 2015). The
main challenge Saudi Telecom Company will be facing is time as they need to be the first one to
start up with 5G and leave their rivals behind.
What is the company’s operations strategy? Is it using multiple sourcing, single sourcing or
parallel sourcing?
In terms of following the operational strategy Saudi Telecom Company is following the
customer driven approach keeping in mind the effectiveness of this strategy in penetrating the
market. The needs and demands of the customers are needed to be fulfilled in this strategy and
What is the firm’s R & D strategy? Is it focused on exploration or exploitation? Is it
striving for technological leadership? Is it using imitation or open innovation?
Developing new services is the key strategy of the R&D department of the Saudi Telecom. This
strategy helped them to launch an array of new services in the market helping the organization to
explore the unexplored market and fulfilling the expectation of the customers of Saudi Arabia.
There are constant changes in the market which shifts the demands of the customers and also
helps to motivate Saudi Telecom Company in launching new services (Wuyts and Dutta, 2014).
During the initial days the main service providing by the organization is just traditional
telecommunications. But later with the changes in demand the Saudi Telecom Company started
providing internet connection and later started with the financial offerings. This changes in
services helped them to stay in the competitive market. Thus it can be easily identified that Saudi
Telecom Company generally gives their more focus on exploration and innovation. Presently
there are several competitions in the market such as Zain, Virgin Mobile etc. and in order to
establish the technological dominance Saudi Telecom is trying to start up the very first 5G
services in Saudi Arabia and thus they will be the very first one to start up with the 5G services
all across the country. Thus if they can be the first one to start up the 5G services then they will
have a huge dominance in the Telecom industry and just might prove themselves to be the leader
of telecom service providing brand in Saudi Arabia. They are also following open innovation
because they are not putting forward some new innovation or any kind of distinctive innovation
rather in this case this innovation is very much common (Jahre and Fabbe-Costes, 2015). The
main challenge Saudi Telecom Company will be facing is time as they need to be the first one to
start up with 5G and leave their rivals behind.
What is the company’s operations strategy? Is it using multiple sourcing, single sourcing or
parallel sourcing?
In terms of following the operational strategy Saudi Telecom Company is following the
customer driven approach keeping in mind the effectiveness of this strategy in penetrating the
market. The needs and demands of the customers are needed to be fulfilled in this strategy and
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