Du Telecom in the UAE Business Essay Example

At the present time, communicative technologies are the driving forces of economy and business. One can name many companies that offer similar services. As a result, a high competitiveness is present in this business. It is necessary to mention that one cannot imagine any company without mobile connection, fixed telephony, broadband connectivity and IPTV services. Such services benefit promotional and distributional policies of the organizations. Du Telecom is a bright example of success in offering telecommunication services in the UAE. The company differs from others because its missions are not only to gain profits but to contribute to the community, create innovation and business excellence and delight customers (About Du Telecom, 2014).

Current paper intends to explore the activity of Du Telecom in Dubai, its business, industry structure, its external environment forces, management and financial performance of the company, as well as strategic issues. Moreover, present essay gives the recommendations how to overcome the occurred problems.

Du Telecom Company Description

Du Telecom is the company that has been operating in the UAE since 2000. It has a wide variety of services in the industry that is the heart of social and economic transformation. Du Telecom brings businesses and people together offering IPTV services, broadband connectivity, fixed and mobile telephony all over the UAE. The strength of the company is that it offers a data hub, carrier services, satellite services for broadcasters and internet exchange facilities. Du Telecom is a rapidly-growing business where 2,000 employees provide comfort and quality of the services. Customers of the company are from 60 countries, and such cultural diversity proves the popularity of Du Telecom in the world and its international level. The employees of this company can serve their customers in many languages.

It is necessary to mention that 50% of employees are UAE nationals, but the working environment of Du Telecom is cosmopolitan. The company offers its services to 70, 000 businesses, 180,000 home services subscribers, 555,000 subscribers and 6.5 million mobile customers. These numbers prove the unbelievable success of Du Telecom. Its annual revenue is AED 10 billion. The vision of the company is noble as it tries to enhance customers’ life anytime and anywhere. Its values are innovations, honesty, friendship and confidence. To understand better the peculiarities of company’s management and marketing it is necessary to analyze the industry structure and major competitors of Du Telecom (About Du Telecom, 2014).

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The Industry Structure

Du Telecom consists of service centers in the UAE that provide assistance both locally and online. The head office of Du Telecom is in Dubai but the company has a complex structure. Despite a reputation and success at the local market, Du Telecom has many competitors that are driving forces of this company. They are the Emirates Integrated Telecommunication Company, the Mubadala Development-owned Satellite Company and Etisalat. Without a doubt, these companies are leaders at the UAE market. It is necessary to mention that telecommunication business depends on high competitiveness and innovation (Burda, 2005).

The Emirates Integrated Telecommunication Company, the Mubadala Development-owned Satellite Company and Etisalat are the most recognizable telecommunication companies in the UAE. Each of them has its advantages comparing to Du Telecom. For example, the Mubadala Development-owned Satellite Company is stronger in Internet services comparing to Du Telecom. It means that Du Telecom should find the possibilities to improve its Internet opportunities. Etisalat has more international value than Du Telecom as it is extremely popular at the French market. As a result, Du Telecom should integrate at the foreign markets in order to be more competitive. To reveal the advantages and disadvantages of Du Telecom, it is necessary to conduct an internal analysis.

The Internal Environment of Du Telecom

The marketing strategy of Du Telecom is to win the international market the same as Etisalat. Moreover, it has all chances for doing it. The internal environment is favorable for the development of new services and implementation of the innovative technologies. One can say that Du Telecom depends on high demand and technology. First of all, the customers want mobile connection, fixed telephony, broadband connectivity and IPTV services at moderate prices. Modernization must be the main strategy for Du Telecom as innovative technologies cannot stay at the same level. Customers’ varying needs are the driving forces for the changes. New possibilities, challenges and situations occur under the influence of customers and lead to sustained growth.
The threat of substitutes is another essential component of the internal environment. It makes Du Telecom be on the alert and ready to high competition. Competition between telecommunication systems is a natural phenomenon and that is why the company should find a possibility to use it for further development and successful operation not only at the domestic market. At the present time, customers do not doubt in the quality of Du Telecom services. The company exceeds customers’ expectations, making it a key to success. The experience of the company is one of the most fulfilling and richest comparing to the Emirates Integrated Telecommunication Company, the Mubadala Development-owned Satellite Company and Etisalat. Moreover, Du Telecom demands additional financing and investments for collaboration with the foreign partners (Cohen, 1995).

Internal Forces and Trends Considerations:

Strengths

  • Providing services that will satisfy customers’ needs.
  • To locate telecommunication centers not only in big cities but small towns, as well.
  • Implementation of Business Intelligence system for controlling the situation within the company.
  • Creative and talented employees.
  • Providing a broad variety of services.
  • Successful leadership is the basement for good marketing and management.

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Weaknesses

  • Contradictions between companies’ offerings and customers’ tastes.
  • The customers can ignore telecommunication services for the sake of other companies.
  • Additional costs and losses.
  • Movement of labor forces.
  • Low potential of human resources for fulfilling goals.
  • High competition between leaders that may result in following their interests rather than companies’ ones.

Opportunity

  • To implement new telecommunication services.
  • Increasing of profits.
  • Possibility to control profits and spending.
  • Training and learning of human resources.
  • Improvement of services quality.
  • Conducting trainings.

Threat

  • Spending the additional costs that could not be profitable.
  • Changes in the structure can lead to company’s issues.
  • Inability of employees to work with it efficiently.
  • Refusals of employees from training.
  • Complaints and possible lawsuits.
  • Poor leadership can lead to the failure of the company.

Trend

  • Focusing on the global market and widening its possibilities.
  • Offering services at moderate prices, making them affordable in multiple quantities.
  • Innovation.
  • To develop knowledge management.
  • Developing services and human resources.
  • A democratic leadership.
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In general, the internal environment of Du Telecom benefits its development and allows its operating at the global market. However, in order to understand the probable challenges for the company, it is necessary to analyze its external environment.

The External Environment of Du Telecom

Economic, political, environmental, legal, technological and sociocultural factors influence the external environment of Du Telecom. Legal factors relate to paying taxes and following all governmental laws concerning telecommunication. The company should provide the security of its clients and their privacy. It means that Du Telecom should protect customers’ rights when they deal with using of its services. Following the legal requirements is the basement for a good image of the company. In the UAE, the governmental regulations are crucial and that is why Du Telecom should collaborate with other legal institutions.

Economic factors of Du Telecom refer to the economic state of the country and such phenomenon as an economic crisis, Gross Domestic Product and unemployment. However, if the economy is at the peak of its development, it can be a driving force for selection of human resources and gaining of high profits. Another way to increase profits is to integrate at the global market and operate in the USA and the UK.

Technological factors concern changes in management process and innovation in services. TV packages, mobile plans, implementation of the latest models of phones and modems are the ways of the development. The strength of such factors is that they allow the implementation of the innovative technologies. However, progress and changes demand spending additional costs. Creating a qualitative connection is another top priority of Du Telecom. The mission of the company is to improve constantly, which means that the company is on the way to innovations and technological progress. Development of human resources, satellite services, Internet exchange facilities are the driving forces of technology.

Social factors of Du Telecom concern negative influence of telecommunication services on the human health. The company should conduct meetings devoting to healthy lifestyle propaganda. They create a reputable image of Du Telecom. People become more health-conscious and choose a healthy lifestyle. As a result, healthy lifestyle propaganda will serve as a promotion and advertisement for the company. Environmental factors refer to creating an ecologically friendly image of the company. Du Telecom should participate in the events promoting environmental protection and act as a sponsor, as well.

Competitive Forces

As to the power of buyers, Du Telecom depends on high demand of customers and technological progress. Varying needs of customers motivate Du Telecom to healthy work environment. Internship, sponsorship programs and work skills programs motivate employees to work here. The available systems of reductions and qualitative connection of telecommunication services attract customers to Du Telecom.

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Threat of substitutes is another dilemma of Du Telecom. The Emirates Integrated Telecommunication Company, the Mubadala Development-owned Satellite Company and Etisalat can substitute Du Telecom.

For this reason, it should find the ways to offer more efficient and quicker means of communication. Threat of new entry is another issue for Du Telecom that demands development of the brand image and human and financial resources. Competitive rivalry is an evident problem, but it is necessary to use it as a key factor for the innovation and changes. Du Telecom is a competitive company that has high capital costs, distribution channels, economies of scale, proprietary technology and high level of telecommunication industry (Porter, 1985).

Supplier power is another factor that defines the place of the company at the market. Supplier power of Du Telecom is sufficient because it collaborates with many telecommunication companies that are its partners. Buyer power is also an important aspect in the telecommunication business. In this sphere, the company deals with individual and industrial buyers. One cannot say that power of industrial and individual customers is high. That is why it can negatively influence selling of the company. Related and supporting industries of Du Telecom include but are not limited to the phone and computer manufacturing companies.

Management Performance

Management performance is a tool used to benefit Du Telecom. Employees are essential assets of the company. Therefore, it is important for managers to ensure that their workforce is always effective and efficient. The performance appraisals of employees and team performance are the ways of improving management performance. Du Telecom uses the Balanced Scorecard, the Business Intelligence System, as well as the Evaluation Management System. They are perfect innovations in the world of business that benefit and contribute to the development of performance management. They help overcome weaknesses and reinforce strengths of the company. It is recommended to use the measurement performance systems in the organizations. The following systems provide an opportunity for Du Telecom to develop and innovate (Rumelt, 1980).

It is evident that the management performance of Du Telecom is not perfect and has some drawbacks. Du Telecom deals with such human resource issues as productivity, arranging and carrying out training, recruiting employees and preventing discrimination. Productivity of the company can be low due to the incompetence of employees or high competitiveness at the market. Management of Du Telecom is diverse, and the cases of discrimination are not typical for the company. Management team of Du Telecom includes experienced managers such as Osman Sultan, Farid Faraidooni, Fahad Al Hassawi, Ananda Bose, Amer Kazim and Ibrahim Hassan Abdulla Nassir. Management activity of Du Telecom refers to the improvement of human resources, strategic planning, talent and knowledge learning and training (Barney, 2012).

Financial Performance

Du Telecom financial success is defined by the revenue earned from sales of products and the provision of services. After having analyzed the financial results of Du Telecom, it is evident that the company has high performance. The increasing number of competitors is a basis for further development of Du Telecom.

This table of revenue and profit reveals that Du Telecom shows colossal growth. Such drastic increase proves that the right business strategy is applied by the company. Though Du Telecom is a young company, it can become one of the leading and competitive companies in the market due to its hard work, persistence and constant development. It is evident that the annual revenue of the company is constantly growing. It should be noted that the main goal of Du Telecom is to move in the same direction. Du Telecom needs a rapid expansion from the local market to the international one in order to keep its success. The operating income loss is the result of the increased market costs. The use of an aggressive subscriber acquisition strategy can help Du Telecom increase its revenue.

Strategic Issues of Du Telecom

Du Telecom can deal with complaints of customers regarding price, employees’ service and telecommunication quality. It means that the company should find the compromises with customers in order to avoid lawsuits. There are services that are priced higher than in its competitors and it can lead to losing customers. The wrong price strategy can result in decline of profits and that is why Du Telecom should regulate its prices. One cannot say that Du Telecom is successful in its distribution strategy in full measure. Du Telecom can have delays or lateness in delivering the products and services. Du Telecom promotion can cost more than expected and as every business wants to minimize its spending. The wrong promotion strategy can lead to decreasing of Du Telecom brand value.

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Weaknesses of Du Telecom

  • Expensiveness

Some telecommunication services are not cheap. Hence, demands for the services of Du Telecom may decrease due to its expensiveness. The company should adapt its prices to its customers. It can propose and put in practice a flexible system of reductions.

  • Service Quality

The clients of Du Telecom may complain about the quality of services. It means that Du Telecom should take care of its reputation and satisfy all needs and demands of its clients. It can be stated that products and services of Du Telecom are not of low quality; though, sometimes unpleasant situations with products and services may occur, thus damaging the reputation of the company.

Recommendations

Du Telecom should use the Balanced Scorecard, the Business Intelligence System, as well as the Evaluation Management System as they are perfect innovations in the world of business that benefit and contribute to the development of the performance management. They help overcome weaknesses and reinforce strengths of the company. The company should use various surveys to determine the level of customer satisfaction. It means that the company is interested in high quality of its services and products, as well as customer satisfaction. Du Telecom should orient on the global market development. The company should follow a global strategy that is aimed at offering products interesting for customers from all over the world.

Du Telecom should open new service centers and improve telecommunication quality. Customer should be at the first priority and that is why it should satisfy their personal desires concerning communication. Du Telecom should pay more attention to fast services and collaborate with companies regarding mobile connection, fixed telephony, broadband connectivity and IPTV services. Du Telecom has a valuable opportunity to develop the services that will be advantageous and innovative. Production strategy of the company deals with creating of new locations for its telecommunication services. Consequently, the company builds capacity with demand and, as a result, it has not evident losses but very high profits. One recommends opening more locations, streamlining, launching new products as the ways for winning of international marketing.

Du Telecom should have a competition-based pricing. One recommends offering a flexible system of reductions. Du Telecom should be sensitive to competitors’ prices and offer better products with similar prices to competitors as it will attract more customers. The pricing strategy has to reflect the value of a service or product. In detail, the value of the product should determine if the quality provided falls on a higher or a lower budget product scale.

Expected Trends in the Future

One can distinguish the following marketing objectives of Du Telecom for 2015:

  1. Becoming more competitive in the UAE.
  2. Providing available prices.
  3. Implementation of new services.
  4. Opening new locations.
  5. Development of new technologies.
  6. Attraction of more customers via promotion strategy.

Du Telecom should look for new suppliers as new supply chains will benefit the production of more qualitative services. Integration into the global market is a new way to development. Du Telecom should communicate with the clients in order to know their tastes and to collaborate with competitors in order to reveal their marketing strategies. Information about Du Telecom, as well as about its products and services, is available via direct mailings, Internet and in person. Such aspect is aimed at satisfying different customers’ needs and at attracting customers from other countries in the result of marketing globalization.