Hult Dubai Global Strategy: Six Force Model Analysis of UAE Companies

This report applies the Six Force Model, a strategic business tool used to assess industry attractiveness, to four companies based in the United Arab Emirates: OSN, MBC, Qanawat, and Fanar. The report begins with an introduction to the Six Force Model, outlining its six key factors: competition, new entrants, buyers, suppliers, substitutes, and complementary products. It then analyzes each company, evaluating their strengths and weaknesses based on these factors. For example, OSN faces competition from other broadcasting services and has a strong presence due to complementary products like televisions, while MBC benefits from its established reputation and multiple channels. Qanawat faces price sensitivity from customers, while Fanar experiences competition in the film production industry. The report concludes by summarizing the findings, highlighting the varying strengths and weaknesses of each company, and emphasizing the importance of understanding the competitive landscape for effective business strategy.

RUNNING HEAD: GLOBAL STRATEGY
MANAGEMENT

GLOBAL STRATEGY 1
Contents
Introduction................................................................................................................................2
Six force Model..........................................................................................................................2
OSN............................................................................................................................................3
MBC...........................................................................................................................................4
Qanawat......................................................................................................................................5
Fanar...........................................................................................................................................6
Conclusion..................................................................................................................................7
Bibliography...............................................................................................................................8

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Introduction
The report involves the application of recognized management model named ‘Six Force
Model’. Considering the report structure, the initial section includes brief information about
the model. It includes the strengths and weaknesses of the model for formulating business
strategy. The succeeding part involves determining the strengths and weakness of four
companies in terms of the model. It takes into account four companies based in United Arab
Emirates and these are OSN, MBC, Qanawat and Fanar. The key purpose of the report is to
apply the Six Force Model on these companies to assess their strengths and weaknesses.
Six force Model
The Six Force Model is a strategic business tool assists to evaluate the attractiveness offered
by an industry. It takes into account six factors responsible to shape the industry. It enables in
determining the strengths and weaknesses to develop a corporate strategy (Rajasekar & Raee,
2013). The six factors of this model are listed below:
1. Competition: This factor determines the level of competition prevailing in the
industry. The intensity of competition is high in the presence of high number of rivals,
low customer loyalty and equal size competitors (Magretta, 2011).
2. New entrant: The threat of new entrant emerges when the existing firms do not
possess patent rights, low customer loyalty, availability of identical products and low
switching cost. The new firms easily enter the industry if the government lays low
control to regulate the industry (Dobbs, 2014).
3. Buyers: These are the end users of the product and service. The threat of buyers arises
when the buyers are fewer in number, price sensitive and there is high availability of
substitute products (Huggins & Izushi, 2011).
4. Suppliers: These assists in fulfilling the diverse needs of the customers by timely
providing the raw material. The threat of suppliers emerges when they are few in
number, hold scarce resources and cost of switching raw material is high.
5. Substitutes: These are the products or services that can be used in place of one
another. The easy and high availability of substitute products at attractive prices
develops a threat of substitution for the organization (Rothaermel, 2016).
6. Complimentary products: These products offer more value to the customers. It
focuses on the impact of related products and services already present in the market.

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The presence of complimentary products offers strength to the organization (Porter,
2017).
There are multiple strengths and weakness of this model. It is easy to use and apply on real
life companies. It helps in easily gaining information based on factors laying an impact on
companies operating in an industry. It provides information on multiple aspects like
competition, rivals, suppliers and customers. Therefore, it allows gaining knowledge on
multiple stakeholders affecting the functioning and profitability of the business enterprise. It
assists in determining the threats and opportunities in response to these factors. Therefore, it
allows in better planning for minimizing the threats and utilizing the opportunities.
This model provides only theoretical knowledge and it involves high amount of time, efforts
and cost for assessment. It offers information about a specific period and does not prove
suitable in changing marketing conditions (Jurevicius , 2020).
OSN
OSN is an international company based in United Arab Emirates. It forms the part of
broadcast industry as it is a leading company allowing an access to more than 180 channels.
It was founded in the year 2009 and it has strong customer base in the home country.
Competition: There are multiple other companies offering similar broadcasting services to
the population of UAE. It includes Showtime, CBS interactive, and STARZ. It has an access
to high number of customers. Its competitors differ in employee strength, revenue and
funding. Its competitor named CBS interactive offers tough competition as it is strong in size.
Therefore, it faces mediate degree of competition and it acts as its weakness.
New entrant: The government regulates the broadcasting industry and it involves high
amount of capital to enter the industry. The existing companies have high goodwill and
recognition in the market (OSN, 2020). Therefore, the company will face low threat from
new entrant in the industry. Therefore, it acts as its strength.
Buyer: The buyers show high preference for availing broadcasting services. Additionally, the
customers from UAE are highly price conscious (Argam, 2018). Therefore, the customers
have mediate bargaining power and it acts as the weakness for the company.
Suppliers: The suppliers are small in size as no information is available on digital media.

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Substitute: The rivals of OSN offer similar services and therefore are availability of
substitute services. Additionally, the cost of substitution is low as its rival’s offers
broadcasting service at similar price. There are adequate numbers of substitutes and therefore
it acts as its weakness.
Complimentary products: Television acts as a complimentary product for this company
because it involves the need of television to watch programs on channels. There are high
number of companies like Apple, and Samsung offering complementary product. Therefore,
it acts as its strength.
Figure 1: Competitors of OSN Company
Source: (Owler, 2020)
MBC
MBC Group is a recognized broadcasting company launched in the year 2002. It is a well-
known established media in UAE. It has ten channels (MBC3, MBC2, AL ARABIYA and
WANASAH) targeting distinct age group of the country. The company operates two radio
stations named MBC FM and PANORAMA FM. It also has several online platforms and
these include www.mbc.net, www.alarabiya.net, and www.shahid.net (Mbc, 2020).
Competition: The MBC Group has high reputation in the market and its number of channels
allows the company to develop and maintain demand for its services. The other companies
offering similar service include Al Arabia, SAT 7UK, TV 2, ZDF, Inspirational Ministries

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and Central European Media Enterprises (Zoominfo, 2020). Therefore, it experiences low
competition from its rivals.
New entrant: The MBC Group is offering services for more than a decade. It has multiple
channels, radio stations, and online platforms and therefore it has high recognition and
reputation in the market. Therefore, the company attains low threat from the entry of new
firms and it acts strength for the company. Additionally, it will not face a threat of reduction
in market share of the company in the UAE.
Buyer: The MBC Group has several channels to gain the attention of large number of
customers. The availability of multiple channels allows the company to have an access to
high strength of customers in UAE (Mbc, 2020). The customers have low bargaining power
in the presence of high number of customers. Therefore, it does not face difficult in attracting
customers.
Suppliers: The suppliers are small in size as no information is available on digital media.
Substitute: There are many companies offering substitute services and it includes Al Arabia,
SAT 7UK, TV 2, ZDF, Inspirational Ministries and Central European Media Enterprises
(Zoominfo, 2020). The MBC Group faces low threat of substitution from its competitors as
shifting cost from one substitute to another is low. Therefore, low threat of substitution act as
an advantage for the company.
Complimentary products: Radio and Televisions are its complimentary products as
customer require these media to have an access to channels.
Qanawat
Qanawat was founded in the year 2001 and headquartered in 2001. It is also an international
organization as it has a presence in 22 countries including Kuwait, KSA, Italy and India. It is
a leading provider of smartphone applications, mobile advertising, and mobile portals
(Qanawat, 2020).
Competition: There are many companies offering digital mobile services to customers in
parts of UAE and it includes InLogic IT Solutions Dubai, ITWare, Shazeb ICT and
EMTECH. These are small in scale and do not have high market recognition. Therefore,
Qanawat Company faces low competition and it acts as its strength.

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New entrant: Qanawat Company has strong presence in domestic and global market. It has
high reputation in the market and it has received an award for ‘Caller Tunes service digital
transformation’ (Qanawat, 2020). Therefore, it will face low threat of reduced market share
and customers from the entry of new firm in the industry.
Buyer: As mentioned previously, the customers of UAE are sensitive to the service. The
customers demand high service for their mobiles as it is one of their key assets. Therefore, the
presence of price sensitive customers develops a weakness for the company as it limits the
company to raise the price of its services in UAE.
Suppliers: The suppliers are small in size as no information is available on digital media.
Substitute: The minor rivals of the company acts as its substitutes as they offer mobile
services. They have low recognition and reputation in the market in contrast to Qanawat.
Therefore, it faces low threat of substitution. Therefore, low threat of substitution acts as its
strength.
Complimentary products: The complementary product of this company is smart phones as
the benefit of these services can be availed on Smart Phones. It is consider as an essential
commodity and it is possessed by almost every customer. There is high sale of Smart phones
and it will also benefit the Qanawat Company. Therefore, the availability of high number of
complementary products acts as strength for the company.
Fanar
Fanar Production Company was established in the year 2008 and it offers compelling and
high quality entertainment through computer generated animation. It focuses on capturing the
tradition, lifestyles and multicultural population of the United Arab Emirates.
Competition: There are many other companies under ‘Film production and Distribution’ and
it includes Aura Productions FZ LLC, Gulf Film LLC, Eagle Films LLC, Boomtown MAL
FZ LLC, Aries Media FZ LLC, Fanar Production Company and many more (Yellowpages,
2020). The company faces competition in the presence of high number of rivals. Therefore,
high competition in the industry acts as a weakness for the company as it faces difficulty in
attracting strong customer base and generating high financial returns.

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New entrant: The Company has high reputation and it has won multiple awards for ‘Best
Business Project in the year 2007’, ‘Best animated series in 2008-2009’, ‘Best caricature of
the year 2008’ and ‘Best Emarati Talent of the year 2009’ (Fanarproduction, 2020). In the
presence of high goodwill and business reputation, it attains a low threat from the entry of a
new firm in the industry.
Buyer: It is engaged in the production of animated series for mainly children and teens of the
society. The buyers have low bargaining power in the presence of large number of buyers as
animated series are major means of entertainment in UAE.
Suppliers: The suppliers are small in size as no information is available on digital media.
Substitute: The competitors of Fanar Production Company act as its suppliers as they offer
similar services to the customers at competitive price. Therefore, it attains a threat of
substitution from its rivals.
Complimentary products: The customers develop the use of television to watch the
animated series produced by the Fanar Production. There are many companies engaged in the
manufacturing of televisions in UAE. Therefore, easy and high availability of the
complementary products acts as strength of the company.
Conclusion
The report summarizes the concept of ‘Six Force Model’. From the above discussion it is
analyzed that six force model includes an addition of one factor of ‘complimentary product’
from Porters five force model. It focuses on six factors named industry rivalry, customer’s
bargaining power, suppliers bargaining power, threat of substitution, threat of new entrant,
and complementary product in the industry. By implementing the six force model on four
companies of UAE, it is acknowledged that all the four companies differ in their strengths
and weaknesses. The OSN Company faces strength of low threat from new entrant and easy
availability of complementary product. The MBC Company’s strength is based on low
competition, low threat of new entrant and easy and high accessibility of substitute product.
The Qanawat strengths include experiencing low competition, low threat of substitution, and
high availability of complementary products. Lastly, Fanar strengths include low bargaining
power of customers, high availability of complementary products, low threat of substitution
and new entry.

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Bibliography
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http://www.qanawat-me.com/en/about-us/

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