IT Managment

Business Strategy and Management Plan

(Global Satellite Communications)

Student’s Name

Institution

Business Strategy and Management Plan

Table of Contents Introduction 3 i. Threat of new entrants 3 ii. Threat of substitute services 4 iii. Bargaining power of customers 4 iv. Bargaining power of suppliers 5 v. Intensity of competitive rivalry 5 Conclusion 6 References 7

Business Strategy and Management Plan

Euro Link internationals is an international High Tech company that deals with a vast range of technological products. Recently, the company has expressed its intention in purchasing a small company known as Global Satellite Communications Inc. Global Satellite Communications is a company that provides professional grade satellite Internet services (Groundcontrol.com, 2015). It is a small firm that has provided its services across the nation. Our company intends to buy this firm so as to strengthen its services by providing internet services to the customers across the country and beyond. Before purchasing this firm, a qualitative evaluation of the industry’s strategic position needs to be done. This analysis is based on Porter’s five forces that exists in the market.

Since Global Satellite Communication is one of the leading internet providers in the country, buying this industry will attract many customers in the market to use it. There has been an increase in the demand of internet providers across the nation and beyond. This has been articulated by an increase in the use of internet in institution and offices as well as domestic use in homes. Because of this demand, the entry of this new service will be highly appreciate. In addition, our industry has a strong name in the market and this is an added advantage as there will be a reduced cost in marketing the new services in the market (Group 4 Global Strategic Management 2013 Wiki, 2015). Despite this, the existing barrier to the entry in the industry is lack of competent skills in communication sector. For this reason, the firm will therefore have to hire new employees and management staffs who will be concerned with the new industry.

Other local internet providers who are offering the same services at a cheaper rate pose a serious substitution threat to the new industry. There has been a stiff competition for the customers by the local internet providers within the country. The local internet providers who have wired cables are able to connect into people’s homes offering them with broadband internet services, which can be a substitute to our high-speed satellite internet provision services (Investopedia, 2004). Currently, mobile cellular network providers within the country and beyond are also offering cellular data bundles at a cheaper rates which has been in use for small scale internet users. This will therefore pose a substitute to the reliance on satellite internet services that will be provided by the new industry that is going to be purchased.

Due to a wide range of choice in the internet service providers, there is an increased bargaining power of the customers in the market. Despite this, local internet providers and cellular data providers do not have a wide difference in the services, regardless of the providers that are selling the services. In most cases, internet services are regarded as commodities. For this reason, the customers in the market seeks for lower prices from the service providers that offer more reliable services. On the other hand, the customers’ bargaining power can vary with respect to the market segment. For this reason, the company is able to provide the services at a lower price in the residential and small scale users and a higher costs for the large scale consumers including business and institutions.

It might seem that the satellite internet service providers or suppliers have a considerable bargaining power over the subscribers or the consumers in the market. Indeed, in case there was no high-tech broadband switching devices, billing software and fiber-optic cables, the satellite internet service providers will not be able to provide and transmit internet services to a wide range. Despite this, there is a number of large transmission deceive makers in the market. There are several vendors in the market to dilute this bargaining power (Investopedia, 2004). For this reason, the limited pool of the well skilled managers and the engineers, more so those that are well versed with the new technology, places the industry in a weaker position in the terms of salaries and hiring.

Competition in the market is a “cut throat”. The increased capital market and industry deregulation has paved way for a rush in the new entrants. The presence of other service providers and new technology is a prompting raft of the substitution services. Almost everyone is using cellular internet service due to its low cost, and for this reason, the company has to come up with a marketing strategy that will attract most of the customers to use its services (Group 4 Global Strategic Management 2013 Wiki, 2015). While trying to lower the costs in order to lure customers, the industry’s profitability is being lowered down. Despite this, the well-established name of the industry has strengthened the industry in the market thus having a sustainable competitive advantage.

Purchasing of Global Satellite Communication will be a great advancement for Euro Link International Inc. By making an analysis, it is evident that the company faces less competition and the customers in the market have a limited bargaining power for the services (Groundcontrol.com, 2015). In addition, a wide range of vendors who are producing the required equipment for the company puts it at a position to switch between suppliers thus having also a considerable bargaining power for of suppliers. This therefore puts the industry at a sustainable competitive advantage in the market.