Saturday, January 08, 2011

External Analysis of Singapore Telecom

Amidst the rapid technological advancements (and convergence), globalization, maturing customer tastes, and periods of economic instability, the prognosis for further development and finding new growth areas for Singapore Telecom is optimistic (prosperous). However, Singapore Telecom would have to be able to continuously renew and augment its products and services to adapt to the fast-paced technological environment in periods of economic instability, and maturing customer tastes; having to look beyond its current offerings and continually improve. Below are the opportunities and threats that have been identified using the PESTL model:

1. Economic
The Asian financial crisis took its toll on Singapore Telecom’s performance as the economy was affected (e.g. large-scale retrenchments or considerable salary reduction).

This soon led to customers turning to cheaper alternatives (i.e. Internet telephony), or cheaper substitutes offered by competitors (i.e. cheaper price plans); their tastes matured - wanting value for money services. For example, Internet telephony allowed customers customization of services – being able to choose the level of service they wanted and charged accordingly. It also enabled the provision of several value added services for customers such as real-time billing, cheaper video conferencing, and unified messaging.

From the financial performance provided in the case study, Singapore Telecom was doing fairly well in F/Y 1996, before the 1997 Asian financial crisis, with a turnover growth of 13.7%. However, during the Asian financial crisis, for the period 1998 to 1999, group revenue fell by 1.2%, and operation profits fell by 10.5%, while operating expenses increased by 6%...Read more>>

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