M1 LIMITED SINGAPORE

M1 Limited, a Singapore-based company, started out by entering the nation’s rapidly growing telecommunications sector in 1994. The company was more financially viable when it entered the market in 1997 thanks to having obtained a license that allowed it to act as the second provider of radio paging and cellular services. After the first monopoly failed, the business was able to acquire more than 35000 cellular clients, which was a considerable number for a startup. The company surprised the cellular market by launching daylong customer services, bundled texts, and relatively long off-peak hours. Through value addition and increased sales, the company was in a position to achieve large sales above its projections.

EXTERNAL ANALYSIS

Porter’s five forces and PEST analysis are the viable tools that can be utilized to analyze the external environment that M1 operates. The two tools provide a broad perspective of the telecommunication market scope in Singapore. They is instrumental in unearthing the current performance of the company regarding challenges and competitiveness.

PEST ANALYSIS

The major political factor that M1 experiences in Singapore is regulations.M1, the government have diverse ideas on how telecoms should be operated (Azha 2017, p.18). Customers often wish that the Singapore government would declare the internet and communication a basic need for its people. However, this would largely cost M1 which gains profit from the sale of telecommunication services in the country. Current rivalry for net neutrality in the country is also a challenge to the service providers as it pushes them to stop throttling both data and internet speeds. Over the years, Singapore has remained to be investor friendly as it is politically stable. The countries policy implementation has not been largely disrupted making it a promising market for any telecommunication company.

From a social perspective, youth market has continued to be more receptive especially to third and fourth generation services. According to different age groups, the youth have been the easiest one regarding the adoption of new technologies. M1 in later times has also catered for all its age group subscribers through applying mobile phone networks in paying for essential transactions such as bills, parking fees, and movie tickets.

TECHNOLOGY FACTORS

Since the introduction of 3g technology M1 technologies has significantly increased its sales. The technology gained a large market share in 2009 with more than 6.6 million subscribers and increased penetration rate. This can be compared with the previous year which had a subscription of 6.2 million with a little lower penetration rate. M1 targets Singaporean youths who are tech-savvy and are more interested in the high-speed internet (Liu 2014,p.19). The company recently introduced 4G technology to enhance the satisfaction of its customers.

Looking at the legal factors M1 is located in a country that enjoys several Free Trade Agreements with other countries. Thus the commercial environment is progressive and allows the company to establish in foreign markets with ease. Being a Singapore based company M1 enjoys easy access to foreign markets. This has made it possible for the company to win the hearts of many Singaporeans.

PORTERS FIVE FORCES

Competitive Rivalry

The intensity of Rivalry refers to the level of competition that exists in the telecommunication market which M1 operates. Competition in the telecommunication market is inflexible since the Singapore market is saturated.M1 intensively competes with StarHub and SingTel for the telecommunication market share. The company thus ha to advertise largely, review customer service provision and initiate new call plans.

Buyers Bargaining Power

Due to advancements in the telecommunication industry customers are becoming more sophisticated than before.M1 is located in a country where buyers have large spending capacity but rely more on quality (Zanuddin 2017, p. 80). This has resulted to aggressive rivalry among the telecommunication industry. Despite the market being saturated customers are price sensitive.

Supplier Bargaining Power

Since M1 provides mobile phone services it has to rely on signal towers. Steel is the raw material that is required in producing towers.M1 thus has to rely on manufacturers who offer it good quality steel for it to be competitive. Shareholders in the company should also be willing to provide capital and invest in the company if it is to remain competitive.

Threat of New Entrants

Barriers to entry to Singaporean telecommunication market have helped protect established companies such as M1. Hefty termination charges and required long duration of contracts only serve to discourage new entrants. The requirement for a firm to invest in the Singaporean market is equally demanding such as large amounts of capital, skilled labor and high level of technology (Azhar 2017, p.20). Difficulties in acquiring capital have discouraged new companies from entering the telecommunication market in Singapore in which M1 has the largest share.

Substitute

The internet has been noted as the possible substitute for mobile services. As the internet gains presence many telecommunication subscribers in Singapore are turning to its use as a means of communication (Faccio 2017, p. 112). The fact that the internet serves additional purposes such as entertainment makes it more viable.M1 calling services can also be substituted by video calling thus posing a threat. Such programs are a threat to services offered by M1 such as third generation services.

INTERNAL ANALYSIS

M1 limited owns its head office 10 international Business part, MiWorld building and Regional Operations Center. The company is listed on the Singapore Exchange as well as being one of the shareholders in Anxieta Investments Limited, SPH Multimedia Private Limited and Keppel Telecoms. Thus the company has several tangible assets that it has acquired over the time.

The company boasts of two major licenses that include Service Based Operator (SBO) and Facility-Based Operator (FBO) which are issued by the Info Communications Authority of Singapore (IDA).Together with the Telecommunication Dealers Class License, these resources have enabled the company to provide communication services within Singapore. The company also offers different high-speed communication services which are largely rare in Singapore. The company offers mobile broadband services to its clients across Singapore.

SWOT ANALYSIS OF M1 LIMITED

Strengths

M1 has not focused on oversea marketing something that has made it possible to target its domestic Singaporean market.

Since M1 does not venture across the borders, it is exposed to less financial risk.

Weaknesses

The services provided by M1 and its major competitors Starhub and Singtel are interchangeable making it possible for customers to adapt easily.

Services and products offered by M1 as well as its competitors are price elastic.

Opportunities

M1 has an opportunity to expand its ventures across the world at the wake of globalization.

Growth for its core products and services such as phones, mobile plans, and data roaming are growing since they are utilized across ages.

Threat

The company faces stiff competition for the market share is high given from Starhub and Singtel.

Changing customer preferences also poses a threat to M1 businesses operation in Singapore.

Competition for market share is a key issue that has considered in the SWOT analysis. The issues are important since failure to consider it can easily drive M1 out of the market.

POSSIBLE STRATEGIC OPTION

The best strategic option for M1 to reduce competition would be strategic alliances with other telecommunication and corporate restructuring. The two strategies are instrumental since if well reviewed they can suggest the direction that the company should undertake. They can both assist in ensuring that M1 remains viable in the market and check on the competition too.

Strategic Alliance

Strategic alliance involves an agreement between two organizations to pursue some common objective while both organizations remain independent. Through the alliance thus M1 will be difficult to face out of the market given that its operational costs will decrease (Lin 2016, p.335). Companies enter into strategic alliances to boost the development of new technologies, to improve supply chain efficiency and to improve market operation through joint marketing. The strategic alliance is an essential factor in increasing market visibility since partners are based in different market niches. Despite that, the partners are required to offer complementary products that can help them to sale each other product (Lin 2013, p. 678). As a cellular services provider, M1 can make strategic alliances with banks to offer money transfer services. This would ensure that the entities work together in finding each other market. Steel companies that provide the raw material for the construction of communication towers for M1 can be good strategic partners. Through the alliance, M1 would benefit from low operational costs thus increasing the ease of making a profit. The companies can easily market the products owing to their ability to make profits from the alliance.

Strategic alliance would assist in addressing the risk of M1 being faced out of the market as a result of competition in several ways (Chua 2015, p. 92). Through the alliance, the company’s market presence would increase in the market that it operates since it would have more partners to drive its agenda. Since it competitors is not largely a threat the market equilibrium will be maintained. Through the strategic alliance, M1 will be in a position to open an avenue for organizational creativeness through shared collaboration. The services and products mothered by the partnership will serve to ensure the right information on the Singaporean market is shared across the partners.

Corporate Restructuring

Corporate restructuring involves applying changes on a company’s business portfolio with the aim of making it more profitable. Lately, the company has focused more on the Singaporean market through restructuring it would be possible for it to put more emphasis on the global market.

Since its closest competitors are largely present globally, the company can easily be at risk if its sales are affected domestically like competitors. Since corporate restructuring provides a way through which companies can independently operate in global markets with ease (Armstrong 2015, p. 68). At times domestic markets are difficult and companies need to invest in global markets to ensure that in case of domestic vulnerabilities they compensate their profitability. Restructuring with the aim of entering the global telecommunication market would also open M1 limited to different opportunities that are equally competitive. This will ensure that it seeks the services of expatriates who often come to businesses with new ideologies of success.

Corporate restructuring addresses the issue of competing for market share in the contest of M1 sufficiently. This is because it would equate M1 limited to SingTel and Starhub in terms of international experience. Since its competitors operate on an international platform, they are exposed to many market dynamics which they can apply to compete with a domestic service provider. By venturing into overseas markets, M1 will be no longer limited of how the telecommunication market operates. It will gain access to a wide pool of ideas that will work in assisting it to stabilize the domestic market while it thinks global. Thus, it is worth appreciating that strategic options work on ensuring that organizations competitively operate in certain markets (Abidin 2016, p.153). The telecommunication market is highly competitive within Singapore and without viable strategic options, competition can force a firm out of the market.

Recommended strategy

Strategic alliance would be the best strategic option that would help M1 to address the current competition that it faces. This strategy would perfectly work for the company given that many industry players in the domestic market will be willing to partner with it. Corporate strategy for the company would be difficult since establishing in other countries would require the company to financially restructure. Thus undertakings have financial implication on the organization’s profitability. The corporate restructuring would also lead to the organization concentrating more on its new market thus forgetting its core market. However, through strategic alliances chances of mutual benefit across different service providers will emerge. Introduction of mobile banking platform for the company would see it clients become more loyal given that they can transact at their convenience. Partnering with steel companies through the strategic alliance would see the cost of building communication towers decrease too. Companies should always strive to undertake those strategies that will not compromise their initial market requires that they have set M1 as a service provider that has grown over a time and should not buy strategy that ignores its core market.

CONCLUSION

M1 limited operates in one of the most sophisticated markets in Singapore. The company has managed to compete with other telecommunication companies that have a global presence with ease. This can be owed to the company’s reputation of continued customer engagement and creativity. Through applying different strategies, the company will be in a position to overtake the two competitors. Operating in a competitive market seems to be an opportunity for the company to grow and increase its market visibility. The company needs to continue changing its market approach through profiling its clients in terms of age, interests, and prices if it is to remain competitive.

References

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