Comparison of communications industries
The market for fixed-line telephone communication became stagnant during the period between 2006 and 2008. In particular, one can speak about the great threat of substitute products such as mobile communication or voice over IP technologies. Furthermore, one should mention the growing bargaining power of clients who can choose from a wide range of products. Additionally, there were significant entry barriers because any new company had to invest significant capital in order to purchase network equipment. Yet, the representatives of this industry were not dependent on suppliers because they could buy equipment from various suppliers. Furthermore, the competition between them was not very strong. On the whole, this role of this market began to decline in 2009.
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The situation in the mobile communication market was different. First of all, the threat of substitute products was lower since at that time voice over IP technologies only began to become popular among clients. In turn, the role of fixed-line telecommunications was diminishing. Moreover, one can speak about the growing intensity of competition because there were many operators who attempted to distinguish themselves in terms of quality or price. As a result, the bargaining power of consumers was strong. Moreover, the switching rates were very high. Nevertheless, one can speak about the growing power of suppliers. Some manufacturers could dictate their terms to mobile operators. For example, such a company as Apple became the largest supplier of handsets.
The television communication industry was affected by several factors. At that time, the threat of new entrants was not high. The market was dominated by five operators that could spend more than 5 £ on the improvement of their content and services. Additionally, the threat of substitute products was not strong. Despite the fact, there were not many rival companies, the competition among them was very intense. Furthermore, the bargaining power of clients was strong because they did not have to pay any switching costs. However, the performance of the television channels was dependent on the producers of satellite equipment such as aerials or set-top boxes. This is one of the main aspects that can be identified.
Finally, it is vital to mention the broadband market. First of all, the threat of substitute products was not very high. There were fixed and wireless broadband services, and they could be offered by each of the companies working in this field. Additionally, the threat of new entrants was lower, because it was difficult for new-comers to distinguish themselves from others. For instance, they could offer a higher speed of Internet connection, but the major players could also make this proposition to clients. The bargaining power of consumers was at the medium level. On the one hand, they could choose among various competing clients. Yet, in many cases, they had to sign long-term contracts with the providers of broadband. Finally, the bargaining power of suppliers was also at the medium level. The producers of network equipment played an important role since they could give a competitive advantage to broadband providers. However, there are many manufacturers working in this area, and Internet broadband providers could choose among various competitors.
The factors affecting the communications industry
There are several factors that drive the development of the communication industry. First of all, one should mention the development of technology which can change the practices of different companies. For instance, the advent of voice over IP protocol prompted mobile operators to improve their services in order to retail clients. In this way, they responded to the possible challenges that can be attributed to the development of technologies. Furthermore, the improvement of network equipment made IPTV more attractive to clients. The other critical factor is the transformation of legislation. For instance, the deregulation of this industry results in the mergers of different companies that provide a wider variety of services. It is possible that these trends will be observed in the future. This trend can affect various countries, including the United Kingdom. This is one of the main issues that should be considered.
These factors will continue to influence this industry in the future. First of all, the development of technologies can lead to the creation of companies that can act as mobile operators and Internet broadband providers at the same time. This is one of the possible changes that may take place in the future. Furthermore, the deregulation of this industry can result in the consolidation of different companies. Thus, one can say that technological and legal factors can play a key role.
Convergence in the UK communications industry
During the next two years, the UK communication industry is more likely to converge. In other words, companies can offer various types of services. It is possible that the private or public service broadcast channels will work more closely with Internet broadband providers because more customers want to combine conventional mass media to be available online. Companies will have to change their strategies in order to meet the new need of clients. This is one of the main issues that can be identified. To a great extent, this industry can become less attractive to new entrants because new organizations will need significant investments in order to become competitive. Therefore, these businesses will not be able to overcome entry barriers. In turn, the attractiveness of this industry to clients depends on the intensity of rivalry among the major companies working in this field. So, the performance of various companies and the experiences of clients will depend on the policies of the UK government, especially the anti-monopolist laws that they adopt. They should make sure that the consolidation of the industry does not infringe upon the rights of clients. These are the main issues that should be singled out.
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The strategies of Vodafone
In order to become the leading company in the industry, Vodafone should adopt several important strategies. This corporation should form an alliance with British Telecom because this organization can offer Vodafone a valuable fixed line network. This policy is based on the principle the convergence of different companies can give a competitive edge to this corporation. Moreover, this organization should play a more active in the broadband market. Such a strategy can enable the company to attract a greater number of clients. Furthermore, the management of this company should pay attention to the development of new services. Such a strategy will help them gain the loyalty of clients. These policies can most suitable for this corporation. The main task of management is to retain the trust of clients whose bargaining power becomes stronger.