Saudi Telecom Company (STC): International Business Analysis Report

This report provides a comprehensive analysis of Saudi Telecom Company (STC) within the context of international business. It begins with an introduction and background of the company, highlighting its role as a leading telecommunications provider in Saudi Arabia and the Middle East. The core of the report involves a detailed SWOT analysis, evaluating STC's strengths, weaknesses, opportunities, and threats. Following this, a PEST analysis examines the political, economic, social, and technological factors influencing STC's operations. The political factors include government intervention and political stability. Economic factors consider the impact of the global and regional economies, including currency fluctuations. Social factors address branding and customer preferences, while technological factors explore the role of R&D and strategic partnerships. The report concludes by summarizing STC's position and the need to adapt to the changing business environment. References from academic journals are included to support the analysis.

Running Head: INTERNATIONAL BUSINESS
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Table of Contents
Introduction................................................................................................................................2
Background of Company.......................................................................................................2
Discussion..................................................................................................................................2
SWOT Analysis.....................................................................................................................2
PEST Analysis.......................................................................................................................4
Conclusion..................................................................................................................................6
Reference....................................................................................................................................7

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Introduction
Different countries all over world are experiencing significant change in the way
products and services are delivered all over the world. The national economies accomplishing
self-sustainability objective are currently developing their routes towards the international
business. The international business is concerned with the business activities that is done
across national borders (Abushova, Burova & Suloeva, 2016). Hence, this report aims to
analyze internal and external business environment of the Saudi Telecommunication
company and analysis will be done on political, economic, cultural and legal challenges of
company.
Background of Company
STC is the leading provider of the telecommunication services in the Saudi Arabia. It
is largest operators in the Middle East. It provides fixed telephone and mobile services, in
addition with the internet as well as other services of data to business and residential
customers. STC operates submarine communications cable system that connects Sudan and
Saudi Arabia in the Africa by the Arab Submarine Cables Company (stc.com. 2020).
Discussion
SWOT Analysis
Strength
 STC is integrated service provider of the telecommunication in KSA and it is market
leader in fixed line and mobile segments.
 It is having established market across the Middle East.
 It has wide portfolio service.
 It is strong and expanding the international presence by increasing contribution of
revenue from the international operations.

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 It has robust recognition of brand because of strategic focus on the advertising,
branding as well as marketing.
 It has technologically advanced operations.
 STC focuses on the practices of acquisition and retention of consumer.
 It is having good policies of corporate governance.
 It has professional management team (Mehmood, Hassannezhad & Abbas, 2014).
Weaknesses
 STC is having limited international presence.
 The profitability of company is reducing.
 STC is increasing the usage of leverage, which may be risky.
Opportunities
 STC is having great potential of revenue from the under-penetrated market of
telecommunication, for instance Indonesia by its direct and indirect subsidiaries.
 It is placed better in comparison to rest of competitors for offering great offers in
order to cross-sell the products.
 STC is looking for expansions of its operations with the help of international
acquisitions, especially in Asian countries.
 Now-a-days, the smartphone users have been increased. STC has biggest opportunity
to increase its sales.
 The other opportunity includes rapid evolving technology.
 Rise in adoption of 4G is also offering good opportunity for company (Silva,
Cavalcanti & Gomes, 2015).
Threat

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 Post liberalization, the new entrants in the market is posing great threat to the
company.
 Political instability because of concentration of power is posing threat to the
company.
 Cyber security is also great threat for company.
 Declining market share because of increasing competition in fixed-line as well as
GSM market.
 Decline in the margins because of price erosion.
 Portability of mobile number.
 Decline in the fixed line segment growth.
 Foreign exchange rate exposure risks that arises from the international operations
(Anggadwita et al. 2016).
PEST Analysis
Political Factor
In twentieth century, the political forces have grown in international business context.
The government intervention level in global business world has grown that lead towards
increasing pressure on the international brands. Overall country’s environment affects its
trade and economic environment. Following are the political factors that affects business
operations of STC:
 The first factor is political stability in the Saudi Arabia affects the operations of the
company.
 The company and overall telecom industry are facing growing pressure because of
increased control of government (Abushova, Burova & Suloeva, 2016).

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Economical Factor
In international business context, economic factors have remained at its core. The
global as well as regional economies is having direct impact on international technology
business performance. In recent years, demand for the mobile and data services has grown
immensely. However, purchasing ability of consumer and their purchasing ability is mostly
affected by the nation’s economic performance.
 Saudi Arabia is having excellent infrastructure and positive environment of business
that provides opportunities for the global multinational investment in country.
 The economy of Saudi Arabia is dominated by the industrial sector that contributes
approx. 62.8% to the overall GDP. The government has diversified economy from the
oil sector to the non-oil sector. Hence, Saudi Arabia is an oil-dependent economy.
The next economical factor that affects the company’s operations is fluctuations in the
markets of currency (Butryn et al. 2015).
Social Factor
In business context, role and significance of socio-cultural factor is growing. Any
changes in the social trends and lifestyle of people affect the buying habits of people. Around
the world, preference and consumption pattern of people in the different regions have
changed. Following are some of the socio-cultural factors affecting STC:
 Social promotions and branding.
 Inclusive promotions for reaching out more and more customers.
It is because of other available brands; customers can easily switch the brands that offers
good network with reasonable price (Igliński et al. 2016).
Technological Factor

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STC is telecom company in which technology plays key role in its operations. In
recent years, it has grown ranges of services based on individual and firm’s customers.
Following are the technological factors affecting STC:
 In order to survive in the market, STC is required to make more investment in
the R&D activities.
 In case of change or updating technology, STC should impart technical
training to the concerned employees time-to-time on continuous basis.
 For reducing technological changes risks, STC should make strategic
partnership with the foreign entities (Sravanth, Sundaram & Kannaiah, 2019).
Conclusion
Therefore, this report concludes that in order to stay ahead as truly purposeful and
meaningful organization, STC has always been focused towards evolution and innovation. It
been observed that company offers digital services in the various categories and are leading
digital transformation both nationally and reasonably. STC is having great strength and good
opportunities but still having some weaknesses with great threat. Lastly, it has been analyzed
that the operations of STC is affected by the different factors such as political, economic,
socio-cultural and technological. It should operate in such a way that there is not major
impact on the company in case of any changes in these factors. Hence, it can be said that STC
needs to keep pace with the changes in business environment.

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Reference
Abushova, E., Burova, E., & Suloeva, S. (2016). Strategic analysis in telecommunication
project management system. In Internet of Things, Smart Spaces, and Next
Generation Networks and Systems (pp. 76-84). Springer, Cham.
Anggadwita, G. R. I. S. N. A., Amani, H., Saragih, R. O. M. A. T., & Alamanda, D. T.
(2016). Competitive strategy of creative application content in the ASEAN economic
community: Software development using SWOT analysis in Indonesia. International
Journal of Economics and Management, 10(1), 95-107.
Butryn, B., Gryncewicz, W., Kutera, R., & Leszczyńska, M. (2015, September). The
Application of PEST Analysis to the Creation of the Profile of an IT Product
Designed to Activate and Support Senior Citizens in Poland. In Proceedings of 9th
International Symposium on e-Health Services and Technologies (EHST 2015) (pp.
109-115).
Igliński, B., Iglińska, A., Cichosz, M., Kujawski, W., & Buczkowski, R. (2016). Renewable
energy production in the Łódzkie Voivodeship. The PEST analysis of the RES in the
voivodeship and in Poland. Renewable and Sustainable Energy Reviews, 58, 737-750.
Mehmood, F., Hassannezhad, M., & Abbas, T. (2014). Analytical investigation of mobile
NFC adaption with SWOT-AHP approach: A case of Italian Telecom.
Silva, C. F. M., Cavalcanti, F. R. P., & Gomes, Á. (2015). SWOT analysis for TV white
spaces. Transactions on Emerging Telecommunications Technologies, 26(6), 957-
974.

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Sravanth, K. R. S., Sundaram, N., & Kannaiah, D. (2019). PEST Analysis of Present Indian
Telecom Sector. International Journal of Innovative Technology and Exploring
Engineering, 9, 4938-4942.
stc.com. (2020). stc - Home page. Retrieved 2 April 2020, from
https://www.stc.com.sa/wps/wcm/connect/english/individual/individual