Rushmore Spotlight:Competitive strategy in the Telecommunications Industry

Rushmore Spotlight features a section from our most insightful student papers.

If you would like to view the whole paper then please get in touch with us at dean@rushmore.edu

Student name: Chukwuma Egu Agbaeze MBA

Title of paper: Competitive strategy in the Telecommunications Industry


Key takeaway points from the paper:


· From this study I learnt that to compete effectively, a manager must have a good understanding of the position of his company in the industry it operates in and the forces at play.


· Understanding the dynamics of competitors and the industry helps a company to develop a competitive advantage.



What is competitive strategy?


It is evident today that a successful manager is one who understands the key drivers of a company and knows the best means by which they can be improved. To have a meaningful impact on the company and the industry, a manager should have a good understanding of the attributes of the industry and the forces that drive competition in that industry. What this means is that to be competitive and be able to identify best practices that improve key performance, a strategy must be formulated.


By developing a competitive strategy in its real sense, a manager is formulating the current objectives, goals, and policies of the business, and how other companies in the industry are going to compete.


Why a company should develop a competitive strategy


A competitive strategy is developed to establish how the company will compete for and retain an advantageous position in the industry. Michael Porter pointed out that the state of competition in an industry depends on five basic forces - entry barrier, buyer power, supplier power, threat of substitutes, rivalry - which collectively determine the profit potential of that industry.[1]


The following processes for formulating a competitive strategy have been identified;


- Reviewing the current state of the industry and identifying the implicit and explicit strategies as well as the underlying assumptions about the company’s position, strengths, weaknesses, competitors’ and industry trends.


- Identifying the key factors for competitive success, industry threats and opportunities, competitive analysis, strengths and weaknesses relative to present and future competitors.

- Test of assumptions and strategies, identifying feasible strategic alternatives and deciding which one best relates the company’s position to the competition.


Telecom providers with a good understanding of what the content value chain in the telecom industry is can determine the best strategy to gain a competitive edge. Understanding the content value chain, which includes information, entertainment, transactions, communication, processed in text, image, audio, multimedia, and / or video format, helps network operators in factoring a sustainable competitive strategy.


[1] Michael E. Porter - Competitive Strategy pg 3

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