Etisalat's Global Expansion: A SWOT, PESTLE, and Strategy Analysis

This report provides a comprehensive analysis of Etisalat, a global telecommunication service provider based in Abu Dhabi, UAE. It begins with an executive summary and background of the company, highlighting its global presence in Africa, the Middle East, and Asia, as well as its interest in expanding into Malaysia and the USA. The report conducts a detailed SWOT analysis, identifying the company's strengths (e.g., strong brand value, innovation), weaknesses (e.g., inefficient financial planning, high calling charges), opportunities (e.g., technological advancement, free trade agreements), and threats (e.g., political instability, increasing raw material prices). Furthermore, the report critically evaluates Etisalat's international strategies, particularly its use of equity alliances, and examines the roles of the UAE government and the WTO in supporting the company's global expansion. A PESTLE analysis is performed for both Malaysia and the USA, assessing the political, economic, social, technical, legal, and environmental factors influencing Etisalat's potential business ventures in these countries. Finally, the report recommends a direct channel distribution market entry strategy for both Malaysia and the USA, concluding with a summary of findings and recommendations, supported by relevant references.

RUNNING HEAD: INTERNATIONAL BUSINESS
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Name of the Student:
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Author’s Note:

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Executive Summary
Etisalat is a global telecommunication service provider. Headquarter of this company situated in
Abu Dhabi, UAE. In the Africa, Middle East and Asia regions, this company is maintaining its
global business successfully. To increase the cash flow, this company is interested to expand its
business in Malaysia and the USA. The strengths, weaknesses, opportunities and threats of this
company are identified in this report. To analyse the present scenario of Malaysia, and the USA,
PESTLE analysis is done in this report. In the end, direct channel distribution, as a market entry
strategy, is recommended for the company to attract the potential customer of Malaysia and the
USA.

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Table of Contents
Introduction:....................................................................................................................................3
Company background:.....................................................................................................................3
SWOT analysis:...............................................................................................................................3
Strengths:.....................................................................................................................................3
Weaknesses:.................................................................................................................................4
Opportunities:..............................................................................................................................4
Threats:........................................................................................................................................4
Critical evaluation of different international strategies of Etisalat:.................................................5
Role of the UAE government and WTO:........................................................................................5
PESTLE analysis:............................................................................................................................6
Entry strategy for Malaysia and the USA:.....................................................................................11
Conclusion:....................................................................................................................................11
References:....................................................................................................................................13

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Introduction:
Before expanding the business globally, the management team of a business organisation
has to conduct a market audit. It will help the business organisation to identify its strength and
weaknesses and areas, which needs to be modified. Etisalat is interested to expand its business
globally. This report will conduct a SWOT analysis and PESTLE analysis to develop the
strategy. The international strategy, used by this company will be analysed, the role of the UAE
government and WTO in supporting this company will be analysed. In the end, the most
appropriate expansion strategy will be analysed.
Company background:
Etisalat, established in 1976, a global telecommunication service provider. First
telecommunication service provider of UAE was this company. Headquarter of this company is
situated in Abu Dhabi, UAE. In 2019, the net revenue of this company was AED 52.2 billion and
net profit of Etisalat was AED 8.7 billion (Etisalat.ae, 2020). This company developed solutions
and services for the 148 million customers of sixteen countries from Africa, the Middle East and
Asia (Etisalat.ae, 2020). The vision of this business organisation is “Driving the Digital Future to
empower societies” (Etisalat.ae, 2020). According to Brand Finance, this company was the most
valuable portfolio brand in the Middle East and North Africa in 2018 (Puri-Mirza, 2019). In
2018, the first commercial 5G wireless network was launched by this company in the UAE. The
number of employees working in this company are 39,508 (Etisalat.ae, 2020).
SWOT analysis:
Strengths:
 Etisalat is the largest carrier of international voice traffic in the Middle East and Africa.
More than 500 agreements of this company can cover about 186 countries (Etisalat.ae,
2020).
 As a global blue-chip business organisation, this company provides the best solution to
140 million subscribers (Etisalat.ae, 2020).
 This company provides the best customer experience in the domestic and international
level. That is the reason, this company is preferred by its subscribers.

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 The ability to product innovation, and strong distribution network, strong brand value,
appropriate marketing strategy, and brand recognition are key strengths of this company.
 This company is successful to enhance the efficiency level of this company as a result of
this company after entering a new market this company can maintain its excellent
performance.
Weaknesses:
 Due to inappropriate and inefficient financial planning, this company is facing a problem.
The current asset ratio and the liquid asset must be managed by this company efficiently.
 The calling charge is high in this network. As a result of this customer thinks twice
before choosing this network.
 The success rate of Etisalat is low while integrating firms with the different work culture.
 Due to the gap in the product range, competitors of this company are getting extra
advantages in an intensely competitive market.
 In comparison with competitors, product demand forecast ability of this company is poor.
That is the reason several opportunities are missed by this company.
Opportunities:
 The stable cash flow of this company is an opportunity for this company to invest in
technological advancement and invest in an adjacent business project.
 The free trade agreement of government is beneficial for this company to expand its
business globally (Etisalat.ae, 2020).
 Core competencies of Etisalat can be a good opportunity for this company to accomplish
the business objective in similar types of projects.
 To attract the potential customer of the new market this company can utilise new
technology which will help Etisalat to practice differentiated pricing plan.
Threats:
 As a global business organisation, Etisalat is very much exposed to several factors like
political situation, currency fluctuations, and liability regulations of different countries,
which can create an adverse impact on this company (Etisalat.ae, 2020).
 The price of raw materials is increasing, which is a threat to this company.

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 In 2016, this company agreed to follow the Paris Agreement, the new environmental
regulations, which can be a threat to this company (Etisalat.ae, 2020).
 This company has to face intense competition as this industry provides stable
profitability.
Critical evaluation of different international strategies of Etisalat:
Etisalat International Investments has the responsibilities to manage the
telecommunication business of this company outside the UAE. To expand business in Pakistan
this company followed the acquisition method to purchase 26% stake of Pakistan
telecommunication in 2005. By following the international expansion strategy this company
enter in Nigeria. Atlantique Telecom provided the telecommunication service in seven countries
of West Africa. By purchasing stakes from this organisation this company acquired Atlantique
Telecom. Before expanding the business in a new country this company evaluates the external
environment of the host nation. After analysing the market entry strategy of this company it can
be said that Equity alliance strategy is followed by Etisalat Company, which can be characterised
as a transnational strategy. While entering in the new market of Asia and Africa, primarily this
strategy is used by this organisation. The management team of Etisalat captures lucrative
business opportunities. By using this strategy while entering in a different market, this company
holds more ownership.
Role of the UAE government and WTO:
The government of UAE supports the business strategy of Etisalat. The management
team of Etisalat is interested to invent new technology. To do that a huge amount of money is
invested by this company. Already, Etisalat is managing its global business successfully. To
generate more profit this company is expanding its business in other countries. ‘The UAE vision
2021’ is the national agenda of UAE, which aims to improve the position of this country in the
global platform (Vision2021.ae, 2018). The government of this nation is interested to transform
UAE as the best place in the world for entrepreneurship. For a long period, this company is
supporting the UAE government to develop smart cities by providing an innovative solution.
That is the reason the UAE government is supporting the business movement of Etisalat.

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The World Trade Organisation has the responsibility to set global rules of trade. To
assure smooth and free trade as much as possible. Directly WTO has no role for the business
expansion procedure of Etisalat. However, global trade rules and regulations are developed and
monitored by this organisation. The business policy of UAE is influenced by the rule of WTO,
which creates an impact on the business operation of Etisalat.
PESTLE analysis:
It can be said that Malaysia and the USA can be good options for Etisalat to expand its
business. To understand the scenario of these two countries, PESTLE analysis will be done
which will identify several factors which can influence the business of this country in Malaysia
and the USA.
Malaysia USA
Political Factors  Malaysia, the federal
constitutional monarchy,
contains thirteen states and
three federal territories.
 The elected prime minister
is the ruler of this country.
 Political stability is present
in this country. The policies
developed by the
government endorses the
ideology of peace and
neutrality.
 This nation is a member of
ASEAN, OIC, UN, and
Commonwealth Nations
(BBC News, 2020).
 This country has to manage
tensions due to maritime
and other disputes with its
 The second-largest
democratic
country in this
world is the USA
(Ozaralli &
Rivenburgh,
2016).
 President is the
head of the USA.
 Political stability is
present in this
country (Ozaralli
& Rivenburgh,
2016).
 One of the most
popular
destinations for
FDI.

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neighbouring counties.
 The political system of this
country is not corrupt free.
However, it can be said that
the political stability of this
country will help Etisalat to
expand its business in
Malaysia.
Economic Factors  GDP of this country in
2018 was $358,579 million
(Data.worldbank.org,
2019).
 In 2018, the GDP per capita
income of this country was
$11,072
(Data.worldbank.org,
2019).
 This country holds the rank
of 37 in the global GDP
rank, developed by IMF
(Imf.org, 2019).
 The unemployment rate in
Malaysia in 2019 was 3.3%
(Data.worldbank.org,
2019).
 Due to cutting edge
technology, the economy of
this country is receiving
benefits.
 The characteristics of
Malaysian economics are a
 The largest
economy of this
world based on
nominal GDP.
 In 2018, the GDP
of this country was
20.544 trillion
(Data.worldbank.org,
2019).
 GNI of this
country was
85.998 trillion in
2018
(Data.worldbank.org,
2019).

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middle-income nation,
diversified (BBC News,
2020).
 FDI is encouraged by the
present government of this
country which can help
Etisalat to set up the
business in Malaysia.
 The economy of this
country mostly depends on
exports. Excessive
dependency on the exports
of oil and gas can be risky
for this country (Oec.world,
2019).
 The present government is
interested to transform this
country and its policies for
pharmaceutical,
technological industries.
 The government of this
country is interested to
accomplish high-income
status. It will be beneficial
for Etisalat to invest in this
company because the
services provided by this
company is expensive.
Social Factors  Corruption is a major
problem for this country
(Gabriel, 2019).
 The third most
populated country
in this world is the

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 The major religion of this
country is Islam. Other
religions are Hinduism,
Buddhism, Taoism,
Christianity, and Sikhism
(BBC News, 2020).
However communal
harmony is present in this
country which is a positive
aspect for doing business in
this country.
 Freedom of speech is
controlled by the
government (Gabriel,
2019).
USA. In 2018, the
population of this
country is 327.2
million
(Data.worldbank.org,
2019).
 The USA is a
diverse country.
 The appropriate
education system
is available in this
country.
 People of this
country is very
much health
conscious
(Ozaralli &
Rivenburgh,
2016).
Technical Factors  Near about 80% citizen of
this country have access to
the internet, which is
mostly through mobile
networks. So it can be said
that doing business in this
country will be helpful for
Etisalat to attract the
customer by providing the
best quality mobile
network.
 Before 2025, the
 Global leader of
technical
advancement.
 Advanced
technology is used
in this country
(Ozaralli &
Rivenburgh,
2016).

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government of Malaysia is
interested to become the
most preferred destination
for the investment of
foreign business
organisations. Etisalat
provides not only
telecommunication service
but also the technological
innovative solution. So it
can be said that by
establishing the business in
this country, Etisalat can
get support from the
government which is very
necessary.
Legal Factors  The common law system is
followed in this country
which contains citizen
rights of Malaysia.
 Regarding the labour
matter, the employment law
is the main regulation,
which must be followed by
a company.
 Separate Islamic laws are
followed in this country.
 Every state of the
USA has its
government
structure (Ozaralli
& Rivenburgh,
2016).
 The regulation
about the business
is controlled by the
state government.
 The ideology of
equality is
practised in this
country.
Environmental factors  This country is facing  Diverse

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several environmental
issues such as deforestation,
air pollution, river
pollution, increasing Co2
emissions, natural disasters
due to climate change,
excessive waste production
(BBC News, 2020).
 While doing business in
this country, Etisalat has to
follow the environment-
related regulation to
enhance the brand
reputation and good relation
with the ruling party.
geography,
wildlife is present
in this country
(Ozaralli &
Rivenburgh,
2016).
 This country faced
several natural
calamities.
 The environment
is a significant
issue for this
country.
Entry strategy for Malaysia and the USA:
In this part, the entry strategy of Etisalat Company will be identified by using Ansoff
Matrix. This matrix can identify the most appropriate strategy which are market penetration,
market development, product and development, and diversification (Loredana, 2016). It can be
said that by using a market penetration strategy, this company can enter the market of Malaysia,
and the USA. To expand the business in Malaysia and the USA, this company can use this
strategy as it will help Etisalat to develop the business. By purchasing the stake of competitor
this company can enhance its market share.
Conclusion:
Thus this report can be concluded as through global expansion Etisalat can increase the
revenue, which can be used for technical innovation. Swot analysis identified that the
management team of this company has to utilise its strengths and opportunities to manage threats
and weaknesses. As this company already present in Africa, the Middle East and Asia. PESTLE
analysis identified the key features of Malaysia and the USA, which can be beneficial for

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Etisalat. By expanding the business in Malaysia and the USA, this company can use these two
markets by providing the best quality telecommunication and internet service.

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References:
Etisalat.ae. (2020). Etisalat UAE | Etisalat Corporation. Retrieved 13 March 2020, from
https://www.etisalat.ae/en/etisalat-corporation.jsp
Gabriel, C. (2019). Cleaning up corruption in Malaysia goes beyond Najib. Retrieved 13 March
2020, from https://www.aljazeera.com/indepth/opinion/cleaning-corruption-malaysia-najib-
190522110246585.html
Matsui, K. (2016). Asymmetric product distribution between symmetric manufacturers using
dual-channel supply chains. European Journal of Operational Research, 248(2), 646-657.
Oec.world. (2019). OEC - Malaysia (MYS) Exports, Imports, and Trade Partners. Retrieved 13
March 2020, from https://oec.world/en/profile/country/mys/
Puri-Mirza,, A. (2019). Middle East: leading telecom brands by value 2018 | Statista. Retrieved
13 March 2020, from https://www.statista.com/statistics/971969/middle-east-leading-telecom-
brands-by-value/
Rambocas, M., Meneses, R., Monteiro, C., & Brito, P. Q. (2015). Direct or indirect channel
structures. Evaluating the impact of channel governance structure on export
performance. International Business Review, 24(1), 124-132.
Data.worldbank.org. (2019). United States | Data. Retrieved 17 March 2020, from
https://data.worldbank.org/country/united-states?view=chart
Ozaralli, N., & Rivenburgh, N. K. (2016). Entrepreneurial intention: antecedents to
entrepreneurial behavior in the USA and Turkey. Journal of Global Entrepreneurship
Research, 6(1), 3.
Loredana, E. M. (2016). The Use Of Ansoff Matrix In The Field Of Business. In MATEC Web of
Conferences (Vol. 44, p. 01006).
Data.worldbank.org. (2019). Malaysia | Data. Retrieved 13 March 2020, from
https://data.worldbank.org/country/malaysia
Vision2021.ae. (2018). National Agenda 2021. Retrieved 13 March 2020, from
https://www.vision2021.ae/en/national-agenda-2021

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BBC News. (2020). Malaysia profile. Retrieved 13 March 2020, from
https://www.bbc.com/news/world-asia-pacific-15356257
Forbes. (2018). Etisalat. Retrieved 13 March 2020, from
https://www.forbes.com/companies/etisalat/#67cffbe72761
Imf.org. (2019). GDP per capita, current prices. Retrieved 13 March 2020, from
https://www.imf.org/external/datamapper/NGDPDPC@WEO/THA/IDN/PHL/VNM/MYS