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Porter’s Five Forces Analysis (Porter Model) of Ufone

<p align&equals;"justify">This is the detailed Porter’s Five Forces Analysis of UFONE which has been operating in telecommunication industry since 2001&period; Even though&comma; it’s a domestic Mobile operator in Pakistan&comma; but it has excellent reputation in the industry&period; The offerings of UFONE is tailored as per the need of the consumers&comma; therefore it has been attracting people to join the UFONE network&period; <&sol;p>&NewLine;<p align&equals;"justify">Ufone or Pakistan Telecom Mobile Limited is a GSM based cellular provider in Pakistan&period; Its operations started in Islamabad on 29th January 2001 under the brand name Ufone&period; It was the third cellular company to enter the mobile telecom industry of Pakistan&period; Up to 2006&comma; Ufone was the whole owned subsidiary of Pakistan Telecommunication Company Limited &lpar;PTCL&rpar;&period; In 2006&comma; PTCL was privatized and Etisalat became the owner of Ufone&period; Ufone is one the largest mobile service provider in Pakistan&period; Based on the number of subscribers i&period;e&period; 24 million&comma; Ufone is the fourth largest mobile service provider in Pakistan&period; This amounts to a market share of 18&percnt;&period; Ufone now operates in 2336 cities and towns of Pakistan as well as covers all the major national highways and motorways&period; The products of Ufone include postpaid and prepaid connections and UPaisa&comma; a mobile based money transfer service&period; The revenue of Ufone in 2016 was more than 25 billion Pakistani Rupees&period; <br &sol;>&NewLine;Following is a detailed Porter Five Forces Model Analysis of Ufone&colon;&NewLine;<&sol;p>&NewLine;<h2 align&equals;"justify">Competitive Rivalry – High<&sol;h2>&NewLine;<p align&equals;"justify">There are only five mobile service providers in Pakistan&period; This spells intense competition amongst them&period; This competition is in the form of network coverage&comma; call rates&comma; value added services&comma; connectivity&comma; bundle packages&comma; and so on&period; Each company provides similar services in each category&period; The competition is now in targeting various market segments through offers and innovative products with the help of creative advertisement&period; Ufone has been the first to introduce a number of economic creative packages that have helped it increase its subscribers&period; Free internet&comma; on-net minutes&comma; off-net minutes&comma; and other value added offers along with products are used to retain and attract new customers&period; In Pakistan&comma; subscribers can switch from one mobile service provider to another with the help of a single text message and also retain the same number&period; This all has made the competitive rivalry high for Ufone&period; &NewLine;<&sol;p>&NewLine;<h2 align&equals;"justify">Threat of New Entrants – Low<&sol;h2>&NewLine;<p align&equals;"justify">The Pakistani mobile service industry has saturated&period; There is very little or no room for a new entrant&period; Also&comma; this industry requires extensive capital investment to ensure coverage of the country in-level with the other providers &lpar;Ahsan&comma; 2014&rpar;&period; Establishing franchises across the country&comma; extensive marketing of packages and snatching market share from the other players requires time and investment in large amounts&period; The existing players have fully covered the country&comma; grabbed large chunks of the market share&comma; and are providing economical call packages for the subscribers&period; All of these factors raise the entry barrier making the threat of new entrants low for Ufone&period;<&sol;p>&NewLine;<h2 align&equals;"justify">Bargaining Power of Suppliers – High<&sol;h2>&NewLine;<p align&equals;"justify">&NewLine;The suppliers of Ufone include telecom equipment providers such as ZTE and Huawei and electricity providers in various regions of the country&period; Suppliers in both of these aspects are limited and powerful especially electric power providers &lpar;Shoaib&comma; 2015&rpar;&period; These companies have many other customers and do not rely on Ufone for their sales&period; They can easily interfere and influence Ufone and disturb its operations financially and physically&period; Ufone has no other option but to agree to the terms of these suppliers&period; This makes the bargaining power of these suppliers against Ufone high&period;&nbsp&semi;&nbsp&semi;&nbsp&semi; &NewLine;<&sol;p>&NewLine;<h2 align&equals;"justify">Bargaining Power of Buyers – High<&sol;h2>&NewLine;<p align&equals;"justify">With five players in the industry&comma; each coming up with the most economical and creative offers&comma; the buyers are given a lot of power&period; The switching cost for the buyers is almost zero&period; The mobile service user’s numbers are increasing at a rapid pace in Pakistan meaning there is intense competition to capture those new entrants&period; The buyers frequently switch between service providers in the search of the best rates and coverage &lpar;Rizvi&comma; 2013&rpar;&period; Buyers can influence the company to reduce its costs&period; This provides the buyers with a strong bargaining power against Ufone&period; &NewLine;<&sol;p>&NewLine;<h2 align&equals;"justify">Threat of Substitutes – Low<&sol;h2>&NewLine;<p align&equals;"justify">The substitutes of Ufone are landline phones&comma; emails&comma; voice over IP&comma; and other similar communication mediums&period; All of these have certain flaws such as cost&comma; time consumption&comma; and availability that make cell phones ideal for use&period; These substitutes still exist but cannot completely serve the multi-purpose functions the mobile service providers are serving&period; This makes the threat of substitutes low for Ufone&period;<&sol;p>&NewLine;<h2 align&equals;"justify">References<&sol;h2>&NewLine;<p>Ahsan&comma; W&period;&comma; 2014&period; Ufone&period; &lbrack;Online&rsqb; Available at&colon; <a href&equals;"https&colon;&sol;&sol;prezi&period;com&sol;ek8dizjl9wmk&sol;ufone&sol;">https&colon;&sol;&sol;prezi&period;com&sol;ek8dizjl9wmk&sol;ufone&sol;<&sol;a> &lbrack;Accessed 03 Sept&period; 2017&rsqb;&period;<br &sol;>&NewLine;Rizvi&comma; B&period;A&period;&comma; 2013&period; Ufone Strategic Management&period; &lbrack;Online&rsqb; Available at&colon; <a href&equals;"https&colon;&sol;&sol;www&period;slideshare&period;net&sol;SyedBehrozAliRizvi&sol;ufone-strategic-management">https&colon;&sol;&sol;www&period;slideshare&period;net&sol;SyedBehrozAliRizvi&sol;ufone-strategic-management<&sol;a> &lbrack;Accessed 03 Sept&period; 2017&rsqb;&period;<br &sol;>&NewLine;Shoaib&comma; M&period;&comma; 2015&period; Strategic Management&period; &lbrack;Online&rsqb; Available at&colon; <a href&equals;"https&colon;&sol;&sol;www&period;slideshare&period;net&sol;muleyha&sol;sm-assignment-48161441">https&colon;&sol;&sol;www&period;slideshare&period;net&sol;muleyha&sol;sm-assignment-48161441<&sol;a> &lbrack;Accessed 03 Sept&period; 2017&rsqb;&period;<&sol;p>&NewLine;<p align&equals;"justify">&NewLine;

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