Analysis of Myanmar Mobile Industry in Global Business Contexts

This report provides a comprehensive analysis of the Myanmar mobile industry within a global business context. It begins with an introduction highlighting the industry's rapid growth and competitive landscape. Part 1 employs Porter's National Diamond Analysis to assess the industry's attractiveness, examining demand conditions, factor conditions, firm structure, and related industries. Part 2 focuses on market entry strategies, specifically Foreign Direct Investment (FDI), discussing its benefits and limitations within the Myanmar context. The report also explores contemporary management issues that businesses may face when operating in the Myanmar mobile industry. The analysis considers the evolving market dynamics, including mobile penetration, consumer behavior, and competitive pressures from both domestic and international players. The report concludes by summarizing key findings and implications for businesses seeking to enter or expand in the Myanmar mobile market.

Running Head: GLOBAL BUSINESS CONTEXTS 1
Global and International Business
Contexts: Myanmar Mobile Industry

GLOBAL BUSINESS CONTEXTS 2
Table of Contents
Introduction......................................................................................................................................3
Part 1: Porter’s National Diamond Analysis...................................................................................3
Part 2: Marketing Entry Strategy.....................................................................................................8
Part 3: Contemporary Management Issues....................................................................................11
Conclusion.....................................................................................................................................14
References......................................................................................................................................15

GLOBAL BUSINESS CONTEXTS 3
Introduction
Telecommunication industry in Myanmar has been changed intensely within past two years and
it has enabled millions of people to get connected and increased the subscriber rate. In the past
quarter, the world included 87 million new mobile users, from which approximately 6% is from
Myanmar that made this country fourth fastest developing mobile market in the world
(Heijmans, 2014). There are some top players in Myanmar mobile industry, so there is tough
competition in the industry. Thus, the Myanmar Mobile industry is very much profitable and it is
attracting new players to enter in the industry and operate their business in the country. For
operating business in this country, it is very important to understand the external factors and
market situations in addition to industry’s attractiveness (Trautwein, 2015).
For evaluating these market conditions and trends, this report includes Porter’s National
Diamond Analysis, which assists in analyzing the attractiveness of Myanmar mobile industry. It
focuses on a profitable market entry strategy that can be used, while expanding business in this
industry. The companies can use Foreign Direct Investment (FDI) for entering in this mobile
industry. Furthermore, the report discusses limitations and benefits of FDI, if any company uses
this strategy to enter in the country. In the third part of report, it emphasizes on different
management issues, which can be confronted by any organization, while entering in Myanmar
Mobile Industry for operating its business activities.
Part 1: Porter’s National Diamond Analysis
The Porter’s National Diamond model is strategic model that is given by Michael Porter. This
model is also known as Porter’s Diamond Theory of National Advantage that was introduced to
understand the competitive advantage that a country possesses because of some specific factors.
Moreover, it helps to understand that how the government can perform its tasks as catalysts to
enhance the strategic position of nation global competitive business environment. Porter’s
National Diamond Analysis assists the organizations, which are operating business in industry,
so that they can collect the information about its effective factors and market trends (Fainshmidt,
Smith, & Judge, 2016). Regarding this model, it can be said that it is an economic model, which
measures the competitive advantage that a nation or a particular region may have.

GLOBAL BUSINESS CONTEXTS 4
Figure 1: Porter's National Diamond Model
On the basis of characteristics of domestic country, it has been possible to analyze the global
success of a firm.
There are six elements, which are used to assess the market for a company, are stated below;
 Demand conditions
 Factor conditions
 Government
 Factor Input Conditions
 Supporting and related industries
 Firm structure, strategy and competition
To analyze the Myanmar mobile industry, some of these factors are applied and discussed below;
Demand Conditions
Demand condition is one of the most important dimensions of National Diamond Analysis, given
by Porter. If a domestic market for a specific product or services is larger than an international
market, response of a domestic company is to give more attention in capturing the foreign market
share by delivering the products overseas. It leads to understand the competitive advantage for
that country and domestic companies (Jaiswal, 2014). The domestic mobile industry of Myanmar
is very demanding, because people are actively using social media and internet applications. It

GLOBAL BUSINESS CONTEXTS 5
increased the demands for smart phones and other mobile phones. This country has a strong
domestic market, which is considered as a first place for investment, because demand for
consumer goods is increasing in Myanmar. Thus, the major reason for targeting Myanmar is to
sustain the National Advantage.
Factor conditions
Factor conditions are important aspects, like; technology base and skilled resources, which a
country develops. Under this model, factors conditions are related to the product demands and
characteristics of buyers towards the innovation and quality of products and services. After
analyzing this component, it can be stated that Myanmar has sufficient low cost labor and natural
resources. It has been evaluated that market of Myanmar is resourceful and people in the country
have diversified choices according to the age and gender (Koutola, 2016).
In Myanmar mobile industry, there are several Chinese companies, like; Lenovo, Huawei, which
are operating their business successfully. It indicates that there is intense competition among
these companies and this makes Myanmar mobile sector strongest in terms of revenues and
profits. As this country is considered as a developing country with comparatively small history,
but there are so many experts, who consider the industry profitable. Currently, Telco’s MPT
introduced its mobile phones in Myanmar industry. With the passage of time, more companies
and brands are emerging in this sector. Although the customer behavior has shown that the
industry is alleviated with the growth in mobile penetration.

GLOBAL BUSINESS CONTEXTS 6
Figure 2: Mobile Penetration in Myanmar
In Myanmar Mobile industry, there is a growth in the number of costumer oriented and more
customized companies. After Service is one of the significant components for the mobile
subscribers in Myanmar business environment (Myanmar Infrastructure Group, 2018).
Factor Input Conditions
In Myanmar country, the factor input conditions are moderate that indicates business conditions
are not much favorable. The labor cost in the country is very low as it is hiring the less educated
people. Other factors, such as; electricity charges, infrastructure, are not profitable in this
country. Thus, it can be said that it is not easy to expand the business in this nation, because there
is scarcity of the resources to assist the global business. Myanmar is the country that ranks at
fourth position in the mobile market due to growth in the internet penetration. In today’s world,
the use of smart phones and social media is increasing that has developed the mobile phone
industry (Shen, & Puig, 2018). Most of the population in Myanmar is using smartphones and
other mobile phones. Increase in the sales of lower priced smartphones from China is the major
reason behind the growth in Myanmar’s mobile sector. In the future, this market will be saturated
and demands and trends will be changed with the passage of time.
Firm Structure, strategy and competition

GLOBAL BUSINESS CONTEXTS 7
These are some internal factors, which impact the growth and business of an industry or a
company. Myanmar is a nation with a significant growth in the usage of internet, smart phones
and social media. It is the major reason behind expanding the business in this industry. It has
been evaluated that Myanmar’s customer market has experienced a significant growth and
changes in demands of consumer products and services. In this country, increase in the demands
of consumer products and development in the technology has been grown the mobile industry
(Nitta, 2017). In 2013, the mobile penetration rate was 50% and 80% of the mobile subscribers
are operating smart phones in this country. The management style of Asian countries is dominant
and strong and it needs hard work and long working hours from its workforce.
This is the major reason that industries in Myanmar are growing with a great growth rate.
According to a report, it can be stated that approximately 42.2% of the people are using phones
of Huawai brand and the percentage for Sony and iPhone is 6.7% and 25.6% respectively. Now,
the number of players in this industry is increasing with the introduction of Xiaomi, Lenovo and
Oppo. These new entrants are increasing competition in Myanmar mobile industry. It indicates
the structure and nature of industry in this country that the people generally prefer to purchase
the mobile phones at affordable prices (Trautwein, 2015). Furthermore, it can be said that
demands and preferences in this industry are changing according to the age groups and gender.
From the analysis, it can be stated that rivalry in the Myanmar mobile industry is increasing, but
it is still far from the competition level of developed nations.
Supporting and related industry
It is an important dimension of National Diamond Analysis, which discusses about the
supporting and related industries those assist the functions and processes of a specific industry.
There is not any industry, which can be operated alone; they require assistance from some other
sectors for materials and services. These raw materials and services are needed to perform the
production and distribution processes. In Myanmar, telecommunication industry can be
considered as a supporting and related industry to its mobile industry (Blonigen, & Piger, 2014).
There are so many international players, who are operating their business in telecom industry,
like; Huawei, Ericsson, Alcatel and ZTE. These telecommunications companies are operating
their business in Myanmar and assisting the mobile sector of this nation. However, the level of

GLOBAL BUSINESS CONTEXTS 8
supporting industry is not enough in Myanmar mobile industry. It requires some effective
improvements, intense competition and more players.
From the Porter’s National Diamond Analysis, it can be analyzed that mobile industry in
Myanmar is moderate for expanding business and gaining competitive advantage over existing
competitors. Some of the factors are favorable for business expansion, but still there are some
factors, which need improvement.
Part 2: Marketing Entry Strategy
When an organization plans to enter or expand its business in any other international market or
country, first it needs to determine a marketing entry strategy. There are various strategies, which
can be used for entering into market. This section of report includes the discussion about the
Foreign Direct Investment (FDI) as market entry mode in Myanmar mobile phone industry
(Shen, & Puig, 2018). The discussion above FDI is stated below;
Foreign Direct Investment (FDI)
The organization needs to make a decision on market entry mode very carefully after considering
the external and environmental conditions. Foreign Direct Investment is considered as one of the
significant modes for entering into international market. Foreign Direct Investment is an
investment, which is made by an organization in one country for attaining business objectives. It
can be in the form of expanding business operations or purchasing assets in another nation. This
is an important mode, which helps the organization for enhancing the economic conditions of
nation (Blonigen, & Piger, 2014). For Myanmar, it can be stated that the country’s government
has been improving FDI since 1988. There may be several objectives behind expanding the
business in Myanmar. These objectives are stated below;
 Finding new business opportunities in international mobile industry
 Adopting market oriented system in the nation for effective allocation of labour and
resources
 Making foreign direct investment to developed economy for expanding the business
 Increasing private investment and business activities
 Increasing employment opportunities for the domestic population (Rath, & Samal, 2015)

GLOBAL BUSINESS CONTEXTS 9
 Technology up-gradation
Limitation of FDI
When any European company expands its business in Myanmar mobile industry, it may face
some barriers, which can affect growth of business in this country. Foreign Direct Investment is
a significant method for entering in global business environment (Chakrabarti, Subramanian, &
Meka, 2017). In addition to its advantages, there are some limitations, which restrict the
organization in expanding the business through this market entry mode. Some barriers to FDI are
given below;
Policies
In this country, there are various factors, which need to be measured by the foreign investors
before making investment in Myanmar mobile industry. The companies need to work as per the
different policies and legislations of the country. There are some policies, like; monetary policy,
fiscal policy and imposed taxes. These policies can restrict the business operations and pose
threats on the business activities in Myanmar mobile industry. These require being advantageous
for attracting the foreign investors in the nation (Fischer, 2016).
Administrative Barriers
When a company expands its business under FDI, it may confront some administrative barriers,
which need to be considered by the company. These barriers are concerned with the acceptance
of investment proposal for a specific industry. As the Myanmar is less developing county, so it
has long administrative procedure to take the approval on investment proposal. Thus, it is time
consuming process to invest funds in the Myanmar mobile industry. It has to take the approval
from telecommunication department and other departments. Government in the country tries to
resolve these issues by developing one step approval, but it leads to increase extra steps as there
is not obvious delegation of authority on foreign investment. This is one of the threatening
barriers, which can deter the foreign investors from making investment decisions to make
investment in Myanmar mobile industry (Ghezzi, Cortimiglia, & Frank, 2015).
Infrastructure

GLOBAL BUSINESS CONTEXTS 10
Infrastructure barriers can also restrict the organization by entering through FDI in Myanmar
mobile industry. Poor infrastructure conditions also obstruct the investors to make investment in
developing nations. If a company enters into Myanmar Mobile industry, then its poor
infrastructure issues can lead to increased risks and costs of operating the business in the country.
These issues can increase the costs for foreign investors as they have to deal with the
infrastructure development costs, like; water resources, electricity rates and communication (Kyi,
2015). There may be the issues related to distribution of products due to complexities in
transportation and communication. The government has to make improvement in the
infrastructure of the country. In the telecommunication industry, the companies need to maintain
the infrastructure, including manufacturing and distribution of mobile phones from one location
to another location. The investments need to be made in the real estate industry, transportation,
roads and water and electricity supply (Liargovas, & Apostolopoulos, 2014).
Advantages of Myanmar Mobile Industry
In Myanmar Mobile Industry, there are various facts, which can attract the business to make FDI.
The key strength of this country is availability of raw material and other resources, which are
used for manufacturing the mobile and smart phones and other related accessories. In terms of
location, Myanmar is favorable for operating business as it is located at the crossroad among
different countries, like; Thailand, India, Bangladesh, China etc. It offers huge potential to
Myanmar country to operate the business (Odaka, 2015). There are so many industries and
companies, which are directly contributing to the country’s economy. The country has several
foreign embassies, which handle the foreign operations and issues. In Myanmar, the cost of labor
is lower than other countries, so investment can assist the foreign nations to generate better
profits and revenues.
Recommendations
It is hereby recommended that Myanmar has to attempt for enticing foreign direct investment
from different developed countries, as it will be profitable for the country also. The policies and
strategies related to FDI can only work in the situation, if it has obvious understanding about the
competitive advantages of the country. There is an organization in Myanmar, i.e. DICA, which
require considering some elements, through which the country can become more attractive to

GLOBAL BUSINESS CONTEXTS 11
encourage the foreign companies to make FDI. The country should develop a culture that
emphasizes on the customers and assist the global nations for managing the employees. To
improve the position of mobile industry, it needs to focus on telecommunication and networking
in the country. This will attract the foreign investors towards the business in Myanmar. It is very
important to create a business friendly atmosphere in the country, so it can entice the FDI from
developed foreign nations (Post, 2016). The government should invest on improving its
infrastructure and other related facilities. In addition to this, it should improve the proposal
submission procedures, so that it can take short duration. If the country considers these
recommendations, then Myanmar will be able to make better relations with foreign countries and
attract FDI from developed nations.
Part 3: Contemporary Management Issues
Generally, all organizations face some issues, when it plans to expand the business
internationally; it needs to consider the factors, which may affect its business operations and
activities. For an organization, it is very essential that it conducts market research and plans for
the growth and development of business. With the growth of business, it has to face some issues,
related to its management, like; staffing issues, financial, resources, legal and suppliers. The
business needs to consider the issues to gain sustainable growth. After analyzing the mobile
phone industry, it can be stated that there are various issues, which a foreign nation may
confront, while entering in Myanmar mobile industry (Singh, 2017). Here is the discussion about
two major management issues, which may be confronted by the organizations in Myanmar
Mobile industry. These issues are stated below;
Political Issues
Political issues are one of the major issues, which need to be considered by the organizations
before starting operations in Myanmar Mobile industry. Political instability is the crucial issue
that limits the businesses to make investment in this country. There are various parts of the
country, specifically north, are dangerous for foreign countries. It is the major threat for the
country to stabilize the political situations and establishing peace. These instabilities will reduce
the business opportunities in the country. It is one of the major reasons that businesses do not
want to make investment in the Myanmar mobile industry (Kingsbury, 2014). The companies are

GLOBAL BUSINESS CONTEXTS 12
unable to operate business in these situations. In this country, there are various political and legal
issues like; employment policies, child labor issue, workplace standards, employee education etc.
These issues hinder the business management in this country. There are various laws and
regulations, which are imposed on telecommunication and IT industry. These regulations may
resist the entry of business in the Myanmar mobile industry. Government has different ideas and
opinions for handling the telecommunication players and people have different ideas. Apart from
this, the political decisions may impact the growth of industry (Tambunan, 2016). The country is
experiencing corruption since many years that may force existing players to copy the patents and
designs of other companies’ mobile phones. So, the companies may face the situation of willful
infringement. To understand this, the example of Apple and Samsung can be considered.
Furthermore, Nokia has decreased its market due to political rebellion in Libya and Egypt
(Steinberg, 2015). Thus, it is very important to consider the political management issues before
entering in Myanmar mobile industry. The government has implemented various reforms to deal
with the issue of corruption in country, but they are not successful in the mobile industry.
Staffing and Cultural issues
Apart from political issues, cultural and staffing issues are other issues, which may confronted by
the businesses, while entering in the Myanmar mobile industry. When it is about the culture, it
can be said that the cultural aspects in Myanmar are very different and unique. Before initiating
the operations in Myanmar industry, the organizations need to examine the possible effects on
cultural life of operations. After considering the labor, it can be stated that cost of labor is lower
than other Asian countries, but there is enough availability of labor in Myanmar manufacturing
sector. When the companies will think about expanding business in this country, there may be
issues related to culture, language and traditions (Moran, Abramson, & Moran, 2014). The
human resources may face issues related to cultural differences.