Analyzing Supply Chain Strategic and Operations Management of STC

This report provides a detailed analysis of the Saudi Telecom Company's (STC) strategic and operational management across various business functions. It examines STC's market development strategy, highlighting its focus on product development and market expansion, employing market penetration and penetration pricing strategies. The financial strategy is characterized by cash flow planning, with potential for stock buybacks. The R&D strategy emphasizes exploration and technological leadership, aiming to launch 5G services. The operations strategy prioritizes customer-driven approaches, while the logistics strategy leverages modern technologies. HRM follows a cost leadership strategy, and outsourcing involves vertical integration. The IT strategy emphasizes first-mover advantages. The report references various academic sources to support its analysis of STC's business practices and strategies.

SUPPLY CHAIN
STRATEGIC AND OPERATIONS
MANAGEMENT OF STC

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?
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
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.

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 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).
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.
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.

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. 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.
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.

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).
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.

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 when the customers gets satisfied
with the service they become a loyal follower
of the telecom brand (Newberry, 2015).
Also by providing services that the customer
needs they get to engage with the customers
and helps them to take control of the market.

What is the company’s logistics strategy? How
has it been influenced by modern technology,
internet and centralization?
The council of logistic management defines logistics as “that
part of supply chain process that plans, implements, and
controls the efficient, effective, forward and reverse flow and
storage of goods, services, and related information between
the point of origin and the point of consumption in order to
meet customer requirement” (Oestreicher-Singer and
Zalmanson, 2013).
With the help of the modern technologies such as automation
and artificial intelligence, is increasing the efficiency of the
customer services and minimizing the chances of error.
Internet has a very big role helping them in offering the
services to the customers fast and accurate.

What is the company’s HRM strategy? Is it aligned
with differentiation or cost leadership? Is the
company using self-managed teams?
Saudi Telecom Company follows cost leadership strategy in terms of the human resource
management strategy. The overall employees who make up an organization are human
resources which are among the most important resources of the organization. The strategy for
dealing with people are twisting up progressively as many components are proving out to be
lesser competitive advantage than it used to be before.
Human resource managers intends to ensure that the organization gets and holds the capable
and particularly motivated workforce it needs. The Human resource management approach of
Saudi Telecom Company is focused on reaching the maximum productivity from the employees
to raise their average rate of production.

What is the company’s outsourcing/offshoring
strategy? Is it using full vertical integration or
taper integration? Use transaction-cost economics
(TCE) as a conceptual background.
Just a decade back outsourcing was an emerging phenomenon
which was relatively new and were viewed as mixture of
uncertainty and anxiety. According to Wuyts and Dutta (2014),
outsourcing in IT has become an integral part of business
doing bringing greater value to the business operations.
Global IT offshore outsourcing is defined as “any contribution
to a client organization by one or more external vendors with
a different country of origin in tangible, intangible. The Saudi
Telecom Company is having vertical integration for which their
customer care services are being managed by outsourced
third party vendors.

What is the company’s IT strategy? Is it constantly
innovating and increasing customers’ ability to
take advantage of new information technologies.
Is it using the follow-the-sun management?
The IT strategy of the Saudi Telecom follows the first mover approach in order to capture the
market and gain attention over the untapped market. For instance the 5G services in Saudi
Arabia is an example of first mover approach and will help them to capture the untapped market
of Saudi Arabia and establish themselves to be the leader of the telecom industry in Saudi
Arabia.
Although Saudi Telecom Company has these strategic business units in various parts of the
world but the management processes of this organization is also not centralized. This means
that the flow of communication between the main unit and other strategic business units is not
at all important for them.

References
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