Assess By Applying The Porter’s Five Forces Model, The Level Of Competitiveness Of Mtml

2082 words - 9 pages

Assess by applying the Porter’s five forces Model, the level of competitiveness of MTML

In the age of globalisation, companies need to become competitive to be successful in the market place. Organisations must understand its business environment to gain a competitive advantage as well as a sustainable development. A company’s business environment is constantly influenced by external and internal factors that shape daily decisions and the company’s performance. In the light of this, companies have to be competent and efficient to adapt to the business world by developing various strategies such as differentiation, cost leadership which will result in result in enhancing their ...view middle of the document...

Although the structure of the industry is defined by exogenous factors, every company can influence each of the five forces through the competitive strategy in its own favour (Porter, 1983). However, the strength of each individual force can vary across industries and change over time as an industry grows, and not all of the forces are equally important for different industries (Porter, 1985). Several authors have pointed out limitations of the model. According to Besanko et al. (2007), the Five Forces approach ignores both changes over time in consumer income and preferences, and changes in companies’ strategies in order to reinforce demand. A few authors have also criticized Five Forces model because it does not account for the role of a government. Besanko et al. (2007) mention that the government as a regulator could affect profitability of an industry, and therefore it should be introduced as the sixth force. Furthermore, from the perspective of the Five Forces approach, it is assumed that companies are free to access the required assets in order to compete in the industry and the chosen market position which may not always be the case (Teece, Pisano and Shuen, 1997).

Overview of Mahanagar Telephone Mauritius Limited (MTML)

Mahanagar Telephone Mauritius Limited (MTML) is a subsidiary of the Mahanagar Telephone Nigam Limited (MTNL) in Mauritius. MTML started its operations in Mauritius since 2003. It is the second operator in the telecommunication sector in Mauritius. It provides several services such as mobile, international long distance apart from the basic telephone services. MTML also offers an internet access through its wireless network to its users since February 2007.

Bargaining power of suppliers

To gain a competitive advantage over suppliers, it is essential to analyse the power of suppliers. The stronger is the power of suppliers, the more intense the competition is likely to be within the industry. The bargaining power of a supplier can be considered as a threat for the revenue of an organisation. MTML, when setting up in Mauritius was fully aware of the impact of Mauritius Telecom Group on the market as the only supplier of fixed telephone services.

Bargaining power of Buyers

Porter’s Model also includes the concept of bargaining power of buyers. Customers are the lifeblood of a company. A company is dependent on customers to exist. MTML sees to it that its customers are satisfied with the services provided. Since MTML has entered a market where it was monopolised by Mauritius Telecom Group, the international company is more keen on satisfying the customers to gain a market share in the telecommunication business in Mauritius.
Although Mauritius Telecom (MT) has been earning annual billion rupee profits, MTML is competing hard and feriously to please customers. MTML is differentiating itself from MT offering Mauritian subscribers cheaper overseas calls. At its office in Port-Louis, MTML...

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