Etisalat Telecommunications | Analysis

Etisalat is the main telecom company in the Unite Arab Emirates and it is one of the most important telecom companies in the Middle East and Africa. In the past, Etisalat was the only telecom companies in the region. It was controlling the area, however, just since few years; new telecom company has emerged in the market and increase the competition risk on Etisalat. As a result, Etisalat started to face more difficulties and challenges. Therefore, Etisalat should overcome these challenges and improve its Total Quality Management since it is very important for Etisalat and could help the company in solving its problems and improving its strategy. In this paper, an investigation and analysis of the situation in Etisalat has been conducted using the primary and secondary methods.

Etisalat is one of the main telecommunications companies in the world and the most important operator in the Middle East and Africa. The headquarter of Etisalat is in the UAE. In 1976, Etisalat has been established and operating as the telecommunications service provider in the United Arab Emirates. The company has established an innovative telecom infrastructure and established itself as an innovative and reliable operator because it depends on both latest technologies and experienced HR.

Since Etisalat is expanding through the time, it faces many new challenges, difficulties and problems. Also, the emerging of new companies and competitors increase the challenges to the company. Etisalat like any other companies has its own strategy. Since Etisalat is a telecom company, it needs mainly well built total quality management and strong strategy. An analysis and evaluation to the situation of the company and market is important for Etisalat in order to identify the risks, opportunities, weaknesses, and strengths of the company. Due to the new situation of the market, Etisalat has new priorities and requirements such as training its employees and improving its managers to be better leader.

(6) Analysis section:

? The Industry Environment

A brief history of the industry:

The history of telecommunication is great and full of inventions and improvements. The history of telecommunication started with the use of smoke signals and drums in Africa, USA and Asia. During the 1790s, the first established semaphore systems appeared in Europe. The electrical telecommunication systems appeared during the 1830s. Alexander Graham Bell invented the usual telephone in 1876. In 1878 and 1879, the first commercial telephone services were organized in the cities of New Haven and London. During the 1990s, the Internet’s expand for popular extensively.

Global/local market description

The UAE is currently serviced by two telecommunications companies: Etisalat and Du. Etisalat was monopoly the industry of telecommunications until Du initiated its mobile services in February 2007. However, Etisalat, with more than 80% of the market, stills the UAE’s leading telecom supplier.

Get Help With Your Essay

If you need assistance with writing your essay, our professional essay writing service is here to help!
Find out more about our Essay Writing Service

Etisalat is expanding considerably worldwide and it is currently the sixteenth largest telecommunications company in the world. By 2010, Du will own 30 % market share. Since 2002, the number of mobile phone subscribers in the country increased extensively by a yearly rates of 25.6 %, approximately four times its population expansion. The UAE mobile market is progressively increasing. Also, new telecom products appeared and attracted the customers in the UAE. Blackberry, i phone, the various types of Internet connections and many other telecom services are widely accepted between the people of UAE. The market of telecommunications is strong in this country since there is strong tendency towards its services and products. Telecoms services are very important and required in the UAE.

As well, there is strong expansion in the telecom services and products worldwide. All over the globe, the need for high speed and advanced telecom services and products is increasing extensively. A lot of global telecommunications companies are appeared in UK, US and many other countries.

? Environmental Industrial Analysis:

Porters Five Forces Analysis:

1. The risk of entry by potential competitors:

Potential competitors are those who get through a specific industry and supply an alternate products or services. Potential competitors increase the risk of Etisalat. The expected profit could be decreased due to potential competition. There are a lot of competitors who are not available in the market of UAE other than they are in other counties like UK but they are able to offer their global products. Etisalat is doing its best to prevent these potential competitors from getting through the market of UAE. Etisalat may face more difficulties du to these potential competitors since they are offering cheaper prices, global lines and international delivery. Etisalat needs to preserve its status in the market and generating more profits. It is expected for new local telecommunication company to enter the marker and compete both Etisalat and Du. In fact, the risk of the potential competitors are high to some extent since they are able to attract the customers of Etisalat.

2. The intensity of rivalry among established companies within an industry:

This force include that the competitive telecommunication established companies struggle to gain share from each other. Competitive struggle has many forms. Companies could struggle using their competitive prices, products models, advertising, selling efforts and their services and supports. Intense rivalry leads to low prices. When established companies in telecommunication industry struggle powerfully, strong threats could endanger the prosperity. Oppositely, if companies compete less powerfully, they could get their chances to increase their prices and earn more profits. The risk of the intensity of rivalry is high because of the existence of Du Company which attract a lot of Etisalat`s customers and provide attractive offers. Also, a new local company is expected to enter the market soon. Thus, there will be two competitors for Etisalat.

3. The bargaining power of buyers:

The Bargaining power is the ability to influence the given prices. The bargaining power of buyers is the ability of customers to make the prices drop or to raise the costs of the products and services by demanding high product quality. Strong customers threaten the company. Oppositely, weak customers don¿½t threaten Etisalat. The weak customers guide the companies to increase their prices and as well decrease the products costs in order to decrease the products` quality and as a result increasing the incomes. Before the emerging of Du, Etisalat was the only company in the marker, thus it controlled the market. However, the situation now is different. After the appearance of Du, Etisalat is forced to compete the offers of Du by providing a lot of offers, cheaper prices and unique products. Lately, the customers of Etisalat become stronger since they are disappointed from the poor support and services of Etisalat. Also, a lot of customers started to deal with Du since it offers cheaper prices.

4. The bargaining power of suppliers

The same as the bargaining power of buyers, bargaining power of suppliers is able to affect prices setting. The suppliers are able to raise the prices or the costs of the products and services. Consequently, strong suppliers threaten the companies. Oppositely, weak suppliers don¿½t threaten the established companies. I think the bargaining power of suppliers is low in case of Etisalat.

5. The closeness of substitutes to an industry’s products

The closeness of substitutes to an industry’s products is once customers have several alternatives for the same product. Once the same product or services is provided by two or more suppliers, the risk will be increased. The closeness of substitutes is considered as a powerful threat. In the market of UAE, there are two companies supplying the same services of telecommunication: Etisalat and Du. Du is threaten the position of Etisalat extensively since it offers the same products and services with cheaper prices and higher quality.

Company SWOT analysis

? Strengths

? Etisalat is the main telecommunication company in the United Arab Emirates:

It was the first company who introduce a mobile phone service in the region back in 1982. It was ranked as the 6th largest company in the Middle East in terms of capitalization and revenues. The number of subscribers has exceeded 4.5 million by the end of 2005.

? High qualified and experience employees:

Etisalat employees staff of talent, skilled and experienced employees in order to enhance the performance of the company.

? Lunching the latest technologies in the world:

Etisalat lunches the latest technologies in the world such as Blackberry, I phone and other modern technologies in order to satisfy its customers and facilitate their reach to the latest inventions.

? Competitive marketing strategy:

Etisalat employ a competitive marketing strategy in order to be always in the top of the market.

? Distribution strategy:

Etisalat employ a well-built distribution strategy in order to expand its business and reach new countries by reorganizing global techniques.

? Successful management:

Etisalat has talent and creative management staff that is able to manage successfully and lead the company to more profitable age.

? Weaknesses

? Products` poor quality:

Some of the products in Etisalat such as Blackberry devices, I phone and DSL modems are poor quality and customers tend to buy them for stores other than Etisalat.

? Poor coverage for mobile network in some areas:

Some areas are suffering from poor network coverage, especially in areas that are full of buildings.

? Poor coverage of Internet coverage in many areas in the country:

Lots of areas and many people are suffering from the poor Internet coverage

? Poor Customer Service:

Lately, the customer service of Etisalat became poor. They are taking too much time in supporting their customers and fixing the technical problems.

? Opportunities

? Penetrate new regions:

Etisalat is working hardly to penetrate to new regions and countries in order to expand its business.

? Increase earnings by lunching offers and promotions:

Etisalat has the chance to lunch offers and promotions in order to earn more money and attract customers.

? Strong media coverage:

Etisalat has the ability to launch strong media campaign in order to attract customers.

? Expand its reach into modern technologies, services and markets:

Etisalat is doing its best to expand its reach into modern technologies, services and markets in order to create chances for its clients

? Threats

? Local competition:

Du Telecommunication Company is a new local competitor to Etisalat since its foundation in the United Arab Emirates.

? Financial crisis:

The current global financial crisis threats Etisalat as many other companies.

? Sales declined:

The declining in sales and profits of Etisalat is due to the emergence of Du Telecommunication Company.

? Poor quality of some services and products:

Some products and services in Etisalat such as Blackberry devices, DSL modems, network and others are poor quality and don¿½t satisfy the customers` needs.

? Competitor Analysis

Discussion of company performance over time

Etisalat is one of the major telecommunications companies worldwide. It is the primary operator in the Middle East and Africa. Etisalat works in 18 countries in the Middle East, Asia, and Africa. Etisalat provides its services to more than 100 millions customers. Year after year, Etisalat is increasing its profits through increasing its expanding and growth. Etisalat is a wide-ranging telecommunications operator offering mobile, fixed-line and data services to persons, projects and global telecommunications companies, and ISPs. Etisalat used to launch the right service to the right customers at the appropriate market at the fitting time. This was shown in the launching of mobile, Internet, GSM, and mobile broadband services into the Middle East, Asia and Africa. Nowadays, Etisalat has 525 roaming treaties linking 185 countries facilitating 3G, BlackBerry, and voice roaming. Etisalat is a main shareholder in Thuraya which is one of the most important satellite geo-mobile communication systems in the world covering about two thirds of the globe.

Key success factors

There are many key success factors that helped Etisalat to succeed in the industry since its existence.

? It was the only telecommunications operator and provider in the UAE for many years.

? It is the leading company in the Middle East, Asia and Africa. Etisalat provides the latest products and services in the world for its customers.

? The expansion and growth of Etisalat helps it to become on of the most important companies in the world.

? As well, the high demanding of telecom services helps Etisalat to be strong and creates high profits in the region.

? The high and latest technologies that Etisalat used in its operations.

? The intense and powerful marketing campaign of Etisalat empowers it and enlarges its expansion.

Etisalat can use all its key success factors to gain a competitive advantage. Its expansion will empower its status more and facilitate its reaching to many other places and areas. Also, its intense and powerful marketing campaign gives power to Etisalat as marketing is very important to attract the attention of customers. Etisalat can take the advantage of the high demanding of various services of telecom between customers and organizations nowadays.

Identify and compare key strategies pursued by major players in the industry

In the United Arab Emirates, there is only one another competitor for Etisalat. It is Du Company. Du entered the market in 2009 and competes Etisalat. Du is adopting a special strategy that is different from Etisalat since its initiating. Du provides the customers with many choices and creating a distinction in quality, innovation, and pricing. Sine its foundation, about 2.9 million people registered in Du as active users. By this, Du proved that it has been the selection for the largest part of new subscribers in the market of UAE. Du also compete Etisalat by proving the latest services such as fixed and mobile telephony, broadband connectivity and IPTV services to persons, homes and organizations. Du growing rapidly and owns 2000 employees in order to empower this expansion. Du believes in cultural diversity, thus it employees people from more than 60 countries. Du aims to reflect the prosperous cultural diversity of the country, at the same time as being able to serve customers from a variety of languages. Also, Du aims to support the Emiratization movement in the country by employing a high number of UAE national employees. Also, over than 50 %from its top management and customer-facing staff are UAE nationals. Du committed to offering pleasing chances for talented employees in an international working environment.

Actually, the appearance and existence of Du was powerful. It initiated its services by great and intense marketing campaign. The strategy pursued by du is different to some extent from that pursued by Etisalat.

Du strategy focused on providing many options of high quality products and services with reduced prices where as Etisalat didn¿½t reduced its prices and its strategy didn¿½t improved since its foundation. Recently, Du is progressively attracting more customers due to its good quality services and the prices that are cheaper than Etisalat. (Du Website, 2010)

? Key Strategic Issue

Developing Etisalat¿½s Managers into More Effective Leaders

Since Etisalat is expanding day by day, their employees and managers are increasing as well. This raising affected many things, especially the conflict between the employees to reach higher positions. As a result, some employees become managers and they forget the leaders qualifications which are already exist in some managers.

Etisalat should change its management strategies in order to improve its mangers to become more effective leaders.

Etisalat is the leading major telecommunications company in UAE, with many different offices and divisions that are currently adapting to the changing dynamics of the global needs of consumers. Etisalat has been known to hire qualified managers who have in the past shown their capabilities for supervising employees. However, there is now a more need for the Etisalat management to develop their leadership skills to a higher standard to provide guidance and direction for employees. As the UAE society expands and develops, there will be even more challenges for Etisalat organization to meet head on, so their managers must be the best leaders possible. Developing Etisalat¿½s managers into more effective leaders will require new governmental initiatives to motivate them to create management training programs according to global standards.

Etisalat¿½s management is in need of new training programs developed by their Human Resource Manager (HRM) to upgrade the level of individual employee performance and overall efficiency in the organization. Etisalat has never really had in-house management training programs, so this is a new concept for them. They have not had to extend their on the job training past the basic instruction and supervision stage since they founded the company 30 years ago.

However, since globalization has presented many new challenges for Etisalat to expand overseas and also adopt new international IT products and services, the level of efficiency within the entire organization must be much better to meet global standards. As a government-owned monopolized telecommunications IT service provider, Etisalat has always been able to control the regional market share and enjoy major profits. However, with newcomer Du in the UAE market, as well as a possibility of future foreign competition being allowed to conduct business in the local telecommunications industry, Etisalat must prepare for higher levels of rivalry.

? Strategic alternative

Etisalat managers have the elements which make them good leaders, but many things led to the burial of this talent. Moreover, improving the mangers of Etisalat could avoid them from many problems such as: losing many qualified employees, lack of creativity, routine and other problems.

Management is the entire process of collaborating with employees for meeting corporate objectives through increased efficiency and effectiveness by getting the most out of the company resources (money, people, equipment, supplies, buildings, factories, land), in the continuously changing global environment. Watson (2002) believes managers have expertise in logical decision-making to evaluate and execute the duties that the organizations were developed for. Some of the most important leadership skills managers can learn to incorporate into the organization include empowering employees so they have more input in decision-making, delegation of authority, and instilling leadership traits. Managerial leadership must involve the ability to withstand pressure, have confidence in one¿½s own capabilities and decision-making skills, trusting the choices made to be for the good of the company, and providing employees with the opportunity to prove themselves.

Strong leaders make the best managers because they trust their instincts and try to input improvements in the organization through employee participation (Georgiades, 1998).

The future global workplace is not about the production of tangible items, but rather more about knowledge. This has caused a dramatic shift in the nature of the global economy, which has led to a necessary response from organizations in their managerial leadership practices. The internet and World Wide Web has replaced the hierarchies by networks, leading to a more horizontal coordination of labour that requires more teamwork and leadership to be successful. Employees must work together on projects, inputting all of their cumulative ideas into a more knowledgeable final result. Conflict resolution has become one of the more important concepts in organizations, where employees must unite and collaborate their problem-solving techniques in order to come up with the most effective outcome (Mullins, 2000).

Middle management leaders will be the future key employees that are empowered by upper management, according to Reich, since identifying problems and determining which strategies will be most efficient in resolving them are the essential forces in organizations today. Despres (2005) feels a new form of management that is ¿½more amiable than supervisory, sharing information, delegating responsibility and encouraging upward and horizontal communication¿½ will be the centre of the diffusion of resources and information and the control of knowledge workers. Direct empowerment of strategic employees will lead to less managerial stress and more participative decision-making. On the job training programs will also be needed to involve employees in the continuous improvement of the organization (Matheson, 1999).

Contributions toward the achievement of corporate goals for organizations depend on teamwork and motivation to ensure superior performance. According to Harris (1997), measuring team performance can be difficult; however, it is essential to make sure teams are effectively driving the business forward. Teamwork is essential to organizational success, and experts say designing work tasks to become shared experiences leads to group success. Managers will want to introduce organizational structures into the initiatives through learning and creativity, leading to the need for more knowledge workers (Stoner, 1995; Telleria, 2002).

(8) Recommendations

In conclusion, Etisalat is a well known and strong telecom company. It is one of the most important companies in the Middle East. However, Etisalat needs for development in many areas:

1. Change the traditional culture of Etisalat and replacing it by quality culture.

2. Increase the commitment by the top management.

3. Preparing a well built and organized total quality implementation plan.

4. Setting an awards and recognition programs.

5. Creating a well built infrastructure that supports the operation and improvement processes in Etisalat.

6. Formulate a clear strategic vision for the company. This vision should supply the purpose and objective for the culture change.

7. It is extremely significant to take into account that culture change should be dealt with the Top-management, since the motivation to change the superior management is a significant indicator. The Top-management is ought to be extremely in support of the change so as to implement and apply the change in the rest of the organization in actual way.

8. Actually, the change has to be important and distinguished at the first level so as to prove that the management team is in support of the change. The behavior of the management has to embody and indicate the types of values and behaviors that must be recognized in the rest of the organization.

9. Adjusting the organization to support organizational change and improving the total quality system.

10. To connect culture to organizational membership is one method to implement and apply a quality culture and improve the total quality system, so persons can be chosen in terms of their correspondence with the new culture.

11. A training department could be established for the workers in order to obtain technical knowledge. The management has to employ the employees¿½ education and training programs, particularly career training. The management must as well enlarge the facilities offered to workers throughout the training stage.

12. The current wages and salaries formation of the company should be modified and improved. The basic wage rate should be increased in order to motivate the employees.

13. Etisalat has to discuss with and prepare its employees before the implementation of new processes and methods for increasing the competence.

14. Etisalat should pay more attention on the issue of training managers and offer professional courses for them in order to improve their skills and expertise. Leadership is very important issue in Etisalat. Therefore, it should pay much attention to improve it.

(9) References

William von Alven. (2000). Bill’s 200-Year Condensed History of Telecommunications, from:

http://www.cclab.com/200year.htm

Etisalat Website. (2010) from www.etisalat.ae

Du Website. (2010) from http://www.du.ae/en/

Willmott, B. (2002). Morale falls, trust plummets says new report. Training Magazine.

Georgiades, N. (1998). Leadership for Competitive Advantage. NY: John Wiley & Sons.

Mullins, L. (2000). Management and Organisational Behaviour. NY: Preston Hall.

Deci, E. (2008). Intrinsic motivation. NY: Plenum.

Matteson, I. (2002). Organizational Behavior and Change Management. Cambridge: FT Knowledge World Business Education.

Stoner, J. (1995). Management. NJ: Prentice-Hall Inc.

Telleria, K. (2002). Managing processes through teamwork. Business Process Management Journal, Vol. 8, No. 4.

Appendix 1

Interview questions and Answers with Mr. Abdulla Al Zaby in Etisalat

¿½ Do you think Etisalat has professional strategic management strategy?

In fact I think the strategic management strategy of Etisalat is good to some extent but it needs for more improvements

¿½ What is the Marketing action plan of Etisalat?

Etisalat has strong marketing plan. Etisalat always focus on attracting customers by initiating powerful and attractive marketing campaign

¿½ How Etisalat gaining competitive advantage?

Etisalat is gaining its competitive advantage by initiating and offering the latest products and services to its customers everywhere. Also, Etisalat is doing its best to offer good quality services and satisfactory prices and promotions that attract its customers.

¿½ How the Information technology used by Etisalat helping to achieve it goals?

Etisalat depends mainly on advanced Information Technology System in order to achieve its strategic organizational goals and purposes. Since Etisalat is a telecom company, the IT system is very important for all its tasks and functions.

¿½ What are the main barriers and challenges faced by Etisalat?

Etisalat as all other companies faced many barriers and challenges. For example, Etisalat faced difficulties in abstaining high skilled human resources and training them. Another difficulty is the improving of the management staff and encouraging them to be leaders. Also, the competition with another telecom companies are another challenge.

¿½ How Etisalat overcome these barriers?

Etisalat tries to overcome its barriers by implementing a well built total quality management that is able to solve the problems and turn the weaknesses to strengths.

¿½ How important are employees to Etisalat?

Human resources are very fundamental to Etisalat. They are one of the core requirements for the success of the company. That`s why Etisalat is insisting on training and improving its employees.

¿½ How effectively HRM practices affect the behavior of the human resources in the organization?

HRM practices are very important Etisalat. The Human resources are affected a lot by these practices as they are able to encourage the employees or discourage them. that`s why Etisalat does its best to improve its HRM practices as possible.

¿½ What do you think the major means used in Etisalat to increase productivity in the company?

The major means used in Etisalat to increase productivity in the company are Training, rewards, and benefits.

¿½ Does Etisalat adopt expatriation as a means to gain organizational and global experience?

Yes, Etisalat has various branches in many areas due to its expansion to many countries. The expansion of Etisalat gave it a chance and good opportunity to have new and foreign experience through employing human resources from different nationalities who enjoying different experiences.

¿½ Is a SWOT analysis employed in Etisalat when dealing with significant issues outside of strategic planning?

Yes sure, SWOT analysis employed in Etisalat when dealing with significant issues outside of strategic planning because its is one of the most effective methods that could be used to identify the weaknesses, strengths, threats and opportunities of Etisalat in every period.

¿½ How important do you think is it to establish long-term objectives for Etisalat?

It is definitely very important to establish long-term objectives. Long term objectives are one of the most important characteristics of the quality culture in an organization.

¿½ How do you rate the human resource capability to manage and implement a change process or new strategic direction?

Actually, both the human resource and the management of Etisalat needs for improvement. The capability of human resource to manage and implement a change process or new strategic direction in Etisalat is good to some extent.

¿½ How Etisalat motivate its human resource to maintain and support the implementation of strategic initiatives?

Etisalat motivate its human resource to maintain and support the implementation of strategic initiatives by reward them, give them compensation, offer training programs and increase their salaries in addition to give them more advantages.

¿½ Does Etisalat maintain its policy periodically?

Not always, since long time Etisalat doesn¿½t improve some aspects in its policy.

Appendix 2

Questionnaire

Section 1

PERSONAL PROFILE

Please fill in the circle that best applies to you

1. Gender:

o Male

o Female

2. Nationality:

o Gulf countries

o Arab countries

o European countries

o Other

4. Education level:

o Bachelor Degree

o Master Degree

o PhD Degree

o Other

5. Current age:

o Below 25

o 26-35

o 36-45

o Above 45

6. Total working experience:

o Up to 5 years

o 5 to 10 years

o More than 10 years

Section 2

1. Are you satisfied with the strategic management strategy of Etisalat?

o Satisfied

o Neither satisfied nor dissatisfied

o Dissatisfied

2. Do you think Etisalat has well-built Marketing action plan?

o Yes

o To some extent

o No

3. Do you think Etisalat has innovative Strategy?

o Yes

o To some extent

o No

4. Is Etisalat using the Information technology well in achieving its goals?

o Yes