NAME: EMMANUEL AKWANDOH

STUDENT ID: 2022Y90400004

MAJOR: MBA
COURSE: ADVANCED MANAGEMENT
COURSE CODE: 00361004

SOLUTION TO THE QUESTION

Michael Porter presented a convenient framework for exploring the economic forces that affect
the profit of an industry. The five forces as presented by Porter include internal competitive
rivalry, threat of entry, and threat of substitution, supplier power and buyer power.
One of the giants in the Telecommunication industry in Africa and in Ghana is Tecno
Telecommunication brand under Transsion Holdings in China. I have worked with Tecno
Telecommunication well over five (5) years and below are the analysis that can be done
regarding the environment it faces in terms of Porter’s five forces model.

Internal competitive rivalry

The degree of rivalry in most industries is an essential part of the five forces. Rivalry is only
one of several forces that determine industry attractiveness. There wasn’t much competition in the
Ghanaian telecommunication industry especially in the 2000s so it was mainly dominated by Nokia,
Sony-Ericson and Motorola companies. In 2007, the Transsion Holdings entered the telecom industry
and due to low exit barrier in the Ghanaian telecom industry, Motorola and Sony-Ericson left the
industry.

Innovation and Price also account for an internal rivalry in the Telecommunication industry and
Tecno telecom used this part of the five forces to their advantage. Now, in as much as there are
other giant companies like Samsung, Apple and Vivo the market share is hugely controlled by
the Transsion Holdings.

Threat of entry

Both potential and existing competitors influence industry profitability. The threat of new

entrants is usually based on the market entry barriers.

Prior to 1992, making an entry into the telecom business was very challenging owing to several
factors, it was a very capital intensive industry, entry into this industry meant that the firms
needed access to huge amount of capital mainly to cover the fixed costs to lay and maintain a
physical network (exchanges, fiber optic cables etc) coupled up with other bureaucratic
processes.

In addition to that, firms needed to get regulatory licenses from the Ghana
National Communications Authority (GNCA), which was both costly and tedious. This was
posing huge threat to new entrant. Implementation of the Electronic-Communication
Regulations -LI1993 provided a significant reduction in barriers as the new entrants did
not need to own their networks and go through previous bureaucratic processes before
operation. This paved way for Motorola, Nokia and Sony-Ericson Company to enter the
Ghanaian Telecom environment.

Threat of substitution

There are several companies offering telecommunication services in Ghana telecom industry at the
moment. Notable ones include the Transsion Holdings brands like Tecno, Infinix and Itel, Vivo,
Nokia, Samsung and Apple Company. The threat of substitution which is mostly affected by
switching costs that is, the costs in areas such as retraining, retoolingand redesigning that are
incurred when a customer switches to a different type of product or service is very easy now
as compared to the ninety’s in the telecommunication industry of Ghana.

Buyers and Suppliers power

Buyer power is one of the forces that influence the appropriation of the value created by an

industry. The most vital determinants of buyer power are the size and the

concentration of customers. Other factors are the extent to which the buyers are

informed and the concentration or differentiation of the competitors.

With regards to Ghana’s telecom industry, I can conclude that, with increased choice of several

technologies and means of communication available and entrance of several new firms,

buyer power has been increasing. Ghanaians now have access to several means of
communication like email, watsap and other telecom brands.
In conclusion, the strength of the supplier brand and switching supplier i.e. the cost of switching
suppliers negotiation of contracts, establishing relationships and developing trust all cost time
and resource and is very high in the Ghanaian telecommunication industry.