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The Analysis Of The Practice Of Low-Cost Strategy In Xinjiang Tele-Com

Posted on:2003-08-01Degree:MasterType:Thesis
Country:ChinaCandidate:J F SiFull Text:PDF
GTID:2156360092965277Subject:Business Administration
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With China affiliated with the WTO (World Trade Organization), the government has begun to take the essential reform in the system of Tele-communication Administration, so that whether the inner regulation or outer environment for Tele-communication enterprises is undergoing great changes. To keep the leading-ship in the fierce market competition and to sustain the profitable and sustained growth, Xinjiang Tel-Com should choose the right competitive strategy. I apply the SWOT Analysis Method in the practices of Xinjiang Tel-Com operations to disclose the advantages and disadvantages of the enterprise itself, and opportunities and menaces from outside. After this investigation and analysis, I draw a conclusion that Xinjiang Tel-Com should introduce the Low-Cost Strategy to cut down the operation cost and then to enhance the core competence, so as to keep the leading place in the great tide of reformation. The main motivation of applying the Low-Cost Strategy is to cut the operation cost down, so that Xinjiang Tel-com could maintain the lower profit guideline than other rivals do, and increase the market share. Secondly, the implementation of Low-Cost Strategy will be beneficial to the company in counteracting the competition from rivals and guaranteeing the company's healthy and sustained development, especially in up-going price fight in telecommunication market nowadays. Thirdly, in the homo-quality or hetero-quality substituting competition, this method will help to win the great amount customers by depressed operation cost and related cheap products and services, so as to reduce the threat from the competition of the substitutes.Fourthly, low-cost let enterprise cope with the increase of input cost, strengthen the capability of the company to bargain with providers, and lessen the negative effects brought by the input variability. Meanwhile, the decrease in operation cost will strengthen the capability to bargain with the customers, such as group buyers, VIP, and other consumers. Based on the analysis of relationship and structure among the five factors--- potential invaders, substitutes, consumers, providers and current rivals, I find that if Xinjiang Tel-Com company is going to control the five competition factors and make effectively use of them, applying Low-Cost Strategy is a critical step to keep the leading-ship and profitability in the games.Along with the advantage originated by the Low-Cost Strategy Method, Xinjiang Tel-Com also risks the potential venture. With the accelerating improvement in telecommunication, the former massive capital or equipment investment would face invalidation or inefficiency. On the other hand, the rivals who adopt the new hi-technology will regain the great advantage in operation cost. The fact is when one company's services or products become competent in the market, the rivals always imitate, bring out the similar products and take the similar cost control methods, reversely threatening the preceding company. If thecompany cuts down the cost too much, it can degrade the quality of the service and products. When the cost and price will be under the customers' expectation, as a result, the customers will cast suspicion over the quality of the service and products provided, even turn to other companies. Xinjiang Telecom should pay more attention on these potential discrepancies and take measure to prevent these from happening. Applying Low-Cost Method will beneficial to Xinjiang Telecom strategically. It's not easy to reach the leading place. If it maintained the long-term advantages in basic factors that are critical for cost control, Xinjiang Telecom would realize Low-Cost strategy. To keep the long term advantages, Xinjiang Tel-Com should take the following measure: Firstly, manage to achieve Scale Economy, which means unit-product cost's decreases with the expanding of large-scale production and increasing of customer population. To do so, on the one hand, Xinjiang Tel-Com should enhance the capability of network equipment and their scale,...
Keywords/Search Tags:Analysis
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