Group Assignment

1. IN THE
ZAMBIANMOBILETELECOMMUNICATIONINDUSTRY
PREPAREDBY: MISELOKAZEMBE 14241
EUNICENYEMBE 14199
HARRISONNYENDWA 14217
GIDEONCHABINGA 14320

2. CONTENTS
 Introduction – Porter’s five forces model
 Analysis of the Zambian Telecommunication Industry
 The Five forces model in application
 Strengths and weaknesses of the five forces model
 Conclusion

3. INTRODUCTION
 Michael Porter’s Five Forces model is used to explore the environment in which
an Industry or company operates to generate competitive advantage.
 Any industry or company may use the porter’s forces model to describe forces
that shape its competition.

4. The Porter’s five Forces model is typically described
diagrammatically as below:

5. ANALYSIS OF THE ZAMBIAN TELECOMMUNICATION
INDUSTRY
 As of December 2014, ZICTA statistics held that; MTN Zambia had more
customers than any other mobile phone operator in Zambia.
 Zambia has three mobile phone operators namely: MTN, Airtel and Zamtel.
 Out of the 10.1 million total mobile phone subscribers in the country, ZICTA
had statistics of 48% MTN, 37% AIRTEL and 15% ZAMTEL.

6. THE FIVE FORCES MODEL - APPLICATIONS
THE THREAT OF ENTRY OF COMPETITORS
• This entails how easy or difficulty it is for new entrants to start competing
and which barriers exist. In the mobile communication industry, it entirely
depends on:
 Initial capital investment requirements – very high
 Access to raw materials and emerging technology – difficulty in Zambia
 Government regulations - stiff

7. THE THREAT OF SUBSTITUTES
• This entails how easy any product or service can be substituted, especially with
cheaper. This will entirely depend upon:
 Buyer’s willingness to substitute – with alternative products or services
 Quality of service provision – Is it of the required standard
 Cost of switching. Is it easy to change to another product
 The relative price and performance of substitutes.

8. THE POWER OF BUYERS
 Customers bargaining power in this sector is high because:
 They buy large volumes, there is a concentration of buyers.
 The supplying industry comprises a large number of small operators (and
agents)
 The product is undifferentiated and can be replaced by substitutes from
close rivals
 Switching to an alternative product is relatively simple and is not related to
high costs
 Customers have low margins and are price-sensitive

9. THE POWER OF SUPPLIERS
 The term 'suppliers' comprises all sources for inputs that are needed in order
to provide goods or services.
 Supplier bargaining power in the mobile telecom industry is low because:
 The mobile operators do not always procure their gadgets and accessories
from a single supplier to avoid delays – they have multiple suppliers,
 The buying industry has high barriers to entry, so they are few buyers,
 The switching costs from one supplier to another are low,
 The buying industry does not hinder the supplying industry in their
development in that they benefit from emerging technologies.

10. COMPETITIVE RIVALRY
 This force describes the intensity of competition between existing firms in an
industry. For instance, MTN, AIRTEL and ZAMTEL
 Competition between existing firms in the sector is likely to be high because:
 There are few large companies of about the same size,
 Companies have similar strategies,
 There is not much differentiation between companies and their products,
hence, there is much sales promotions,
 Low market growth rates (growth of a particular company is possible only at
the expense of a competitor).

11. STRENGTHS
 The model is used is used to explore the environment in which a particular
product, company or industry operates to generate competitive advantage,
 The model is a useful input for performing tools like SWOT and PESTEL analysis.

12. WEAKNESSES
 In the economic sense, the model assumes a classic perfect market. The
more an industry is regulated, the less meaningful insights the model can
deliver,
 The model is best applicable for analysis of simple market structures. A
comprehensive description and analysis of all five forces gets very difficult in
complex industries with multiple interactions
 The model is based on the idea of competition. It assumes that some
companies try to achieve competitive advantages over others in the markets
as well as over suppliers or customers.

13. CONCLUSION
 The model of the Five Competitive Forces by Michael E. Porter has become an
important tool for analysing an organization’s industry structure in strategic
processes,
 Porter has identified five competitive forces that shape every industry and every
market.
 These forces determine the intensity of competition and hence the profitability
and attractiveness of an industry.
 The model can be used to analyse firms in different industries.

14. GROUP FOUR MEMBERS - PHOTO

15. THE
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