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Rivalry of Existing Australia Telecommunication Services

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Introduction

A) Executive summary The aim of this report is to ensure that Millar Ltd has a competitive advantage to compete with the existing rivalry in Australia and also letting the managers know more about the different environments. The report conducts an analysis of the telecommunication services industry in Australia using the Porter's Five Forces Model and Hofstede's Cultural Dimensions. Millar Ltd is well established Italy telecommunication services company which provides good quality of telecommunication services. In order to expand to Australia successfully, the company must consider using the adequate resource based on the research about Australia domestic telecommunication services market. In this report, it provides competitive strategy for a Millar telecommunication services to enter the industry in Australia In first part, the report discusses Porter's five forces model which are threat of new entrants, threat of substitutes, bargaining power of suppliers, existing rivalry and competitive strategies connect with Australian telecommunication services industry. And then, it applies Hofstede's Cultural Dimensions and it is identified in five aspects: power distance, uncertainty avoidance, collectivism and individualism, quality and quantity of life, and time orientation which shows a big difference between the two cultures. At the end, the recommendations provide some strategies to adjust the operating in Australia. B) Porter's 5 Forces Model: 1.0 - Threat of New Entrants 1.1 - Economies of scale There are many telecommunication services companies in the market. Economies of scale may exist if there are many companies in an industry. An economy of scale is a situation in which the long-run average cost curve declines as the firm increases output, (Mctaggart, Findlay and Parkin, 2007). ...read more.

Middle

4.2 - Availability of substitute suppliers There are substitute supplier services that people may use instead of mobile phone services. Optus, Hutchison and Vodafone are substitutes as they provide not only mobile phone services but also internet and landline services. Customers may choose to use the substitute services instead of mobile phone service. (Australia telecommunication report 2009, 16). There are also hardware substitutes for mobile phones as there are many companies providing them such as Nokia, Samsung and Sony Ericsson, (Worthington and Britton 2006, 238). 4.3 - Analysis The bargaining power of the suppliers in the telecommunications industry is high because there is only one major provider of network unit to maintain the network in mobile phone service industry. As a result, in order to get the network from the carrier, Millar had to pay the amount requested. The bargaining power of the hardware sector is also high because, although there are many handset providing companies, consumers will focus on the popular mobile phone brands such as Nokia, (Worthington and Britton 2006, 364). 5.0 - Existing Rivalry The rivalry in the Australia telecommunication industry is considered intense as that there are about 31 mobile service providers currently operating, (Australian Communications and Media Authority, 2007). New technology everyday is creating more substitutes for the service and this tends to drive industry profitability down. The industry also suffers from high exit barriers. Networks and billing systems and their swift obsolescence makes liquidation difficult, (The Industry Handbook - The Telecommunications Industry, 2007) 5.1 - Industry Growth Rate The mobile service industry in Australia can be considered as a consolidated industry because there are only a small number of large companies providing mobile service in Australia. ...read more.

Conclusion

Therefore, the Italian employees from Millar Ltd, especially those in high level of command such as managers, should encourage their employees to be aware of and act on opportunities for innovation. 8.3 - Collectivism Vs Individualism Australia is very high for individualism which is not very beneficial for the company. Therefore, Australian employees in Millar Ltd should learn to be more collectivistic. For example, Australian employees should learn to communicate with their working partners more and make more group decisions instead of individual decisions. 8.4 - Quality (Femininity) of life vs Quantity (Masculinity) of Life. Research has shown the Italy is has a higher masculinity level compared with Australia. Hence, in order to bridge the gap, Italian employees should learn to lower their masculinity level, that is, to give more care and understanding towards their colleagues. For example, Italian employees in Australia should learn not to interrupt with most of their colleagues' private life. 8.5 - Time Orientation. Italian employees should adapt more to the short-term time orientation of the Australians in order to cope with the environmental working conditions. On the other hand, Australians should also learn to adapt to more long-term time orientation. This is so that Millar Ltd can create more long-term goals which are beneficial for the company. 9.0 - Conclusion In conclusion, we suggest that Millar Ltd spend more time on resolving the problem. One way this could be done is by giving out trainings to employees that are going to Australia to allow them to further understand Australian culture and working style. Besides that, Millar Ltd should also do an extensive research on the current status of the Australian market of the industry and take precautions. ...read more.

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