post response 510

1st post (1)Global Strategy
Saudi Telecommunication Company (STC)
STC provides telecommunication services in the Kingdom of Saudi Arabia and has an international
presence in more than 11 countries with more than 170 million customers (STC, 2024). It is thus
among companies that have ventured into international markets to expand their services beyond
domestic borders, which enhances sustained growth and competitiveness. Analyzing how STC
extended its competitive advantage from the home market, the mode of foreign market entry that it
used, and the resources and capabilities in the local market connected to the international market will
give insight into the importance of global strategy in an organization.
How STC Extended Its Competitive Advantage from Its Home to International Market
Pedersen and Tallman (2022) stipulate that innovation and advanced economics are perceptive and
that most organizations believe they can be used to compete in the current world of economy. STC
invested in technological innovations such as the 5G networks and Fiber-optic broadband, which
made it provide superior services in international markets. STC was among the first companies to
launch the 5G network, where it deployed around 65000 towers in the international markets (STC,
2024). Combining expertise in technology and infrastructure development made the company position
itself as a leader in offering telecommunication solutions globally.
It also extended its competitive advantage through strategic partnerships and joint ventures with
different telecommunication companies in target markets. For example, it signed a strategic
partnership agreement with Telefonica, one of the largest telecommunication companies in the world.
The two companies got into a partnership where each would benefit from combined expertise and
market presence. The partnership allowed STC to access over 65 markets in Europe, Africa, Latin
America, and the Middle East STC (2024). Such a partnership made the company leverage its market
knowledge, regulatory expertise, and distribution channels and get access to technological resources
and brand reputation.
Nevertheless, not all aspects of the competitive advantage were easily transferable and replicable in
the international markets. Cultural differences pose a challenge in the expansion efforts as they differ
from one market to another, affecting customer behavior and business practices (Grant, 2021). STC
had to ensure that it adjusted its offerings to suit the cultural preferences of the international markets.
It had to customize its products and services to be attractive to local customers. It also experienced a
competitive landscape in the international markets, as local and global players were all vying for a
market share (Grant, 2021). There were already established markets, and thus, it had to differentiate
its offering and invest in innovation to gain a sustainable competitive advantage.
Mode of Foreign Market Entry
STC used different entry modes depending on the target market. It used strategic partnerships and
joint ventures with local telecommunication markets, which allowed it to enter the markets with limited
foreign ownership restrictions. For example, it partnered with Ooredoo Group in Qatar, where it
formed a joint venture called Asiacell, hence accessing the Qatar market (Farrag et al., 2023). It also
used acquisition and mergers, where it acquired the Kuwait Telecommunications Company, which
was a big telecommunication operator in Kuwait, which enhanced its entry into Kuwait and gained the
already established market share and customer base (Farrag et al., 2023). These entry modes
portrayed its adaptability and agility in getting into different international markets.
Resources and Capabilities
They had a pivotal role in international expansion. The company conducted extensive market
research to gain insight into the different consumer preferences and regulatory environments in the
target markets. The insight gained assisted in leveraging its products and services and marketing
strategies to align with the specific needs and preferences. The local market knowledge made it
customize its offerings to match the cultural preferences and regulatory standards. STC partnered
with distributors and retailers to enhance the efficient distribution of products and services in the
international market, hence reaching customers effectively (D, Ghezzi, & Cavallo, 2021). The
company cultivated rigid relationships with government officials and policymakers in the international
markets to assist them in managing the complex regulatory landscape in the international markets.
Therefore, these resources and capabilities were so instrumental in international expansion.
Conclusion
STC successfully extended its competitive advantage into international markets using partnership
acquisitions and utilizing its resources and capabilities. Investing in technological innovation, such as
the 5G network, allowed it to offer strong and unique telecommunication solutions worldwide. It is due
to such expertise that it was able to partner with big companies such as Telefonica, which enhanced
its market reach.
References
D, A. S., Ghezzi, A., & Cavallo, A. (2021). Corporate Entrepreneurship in the Digital Age: A
Systematic Literature Review. Proceedings of the European Conference on Innovation &
Entrepreneurship, 231–238. https://doi-org.sdl.idm.oclc.org/10.34190/EIE.21.095
Farrag, D. A. R., & Abu Gharara, S. R. (2023). Can Arab-origin brands go global? An exploratory
study. Journal of Islamic Marketing, 14(8), 2045-2069. https://doi.org/10.1108/JIMA-07-2021-0228
Grant, R. M. (2021). Contemporary strategy analysis. (11th ed) John Wiley & Sons.
Pedersen, T., & Tallman, S. (2022). Global strategy collections: Emerging market multinational
enterprises. Global Strategy Journal, 12(2), 199–208. https://doiorg.sdl.idm.oclc.org/10.1002/gsj.1439
STC, (2024). Who we are. https://www.stc.com/content/stcgroupwebsite/sa/en/who-weare.html?utm_source=group_redirect&utm_medium=geo_targeting_g_en&utm_campaign=stcgroupcli
cks&showlocationBanner=true
Respond of 1st post :
2nd post ( 2 )
For a company to enter the international market, I believe that there are some neccessary steps to
minimize their risk of expantion and increase their chances of success. It start with performing a
political, economical, social, technological, environmental, and legal analysis, PESTEL for short, prior
to entering the international market, the PESTEL analysis gives a broad understanding of the nature
of the interned market and the forces the governs it (Menet, 2016). After the analysis, a strength,
weakness, opportunities, and threats analysis, SWOT for short, is performed with regard to the scope
of the company relative to the market. Afterwards, a startegy is established on how to penetrate the
market and the best form of entry. Unfortunatelly, most companies do not publically provide the
PESTEL and SWOT data for entering new market (Lu et al, 2013), however, this is my opinion on the
best course of action before entering a new market. For the purposes of this discussion I will choose
Sabic, the third largest petrochemcial company in the world with products in almost all international
market.
Sabic enjoys a competetive advantage for being close to the world largest oil producer Aramco, which
it gets most of its raw materials from at a cheaper than average market price. Using this to their
advantage, Sabic can produce high quality petrochemcial products at a relatvely cheap price, then
export them to the desired market (Tuncalp & Al-Ibrahim, 1990). In addition to their heavy investment
in research and development for their products, Sabic can maintain its competetive advantage and
stay a head of the curve in the international market (Alolayan & Richards, 2015). The strategy that
Sabic employes for entering a new market is to undercut the competition, to penetrate the market and
establish a strong supply chain once the market shows appatite for more Sabic products.
As mentioned above, Sabic employes the cheap raw materials for its petrochemcial products and
their industrial knowledge to maintain its competative advantage and produce high quality products for
the intended international market. Sabic also employes its political connections by building
headquarters and major industrial manufacturing plants in Europe and North America to garner
business and political support from the region (Alotaibi, 2015). All in all, Sabic employes a wide range
of strategies and tactices to enter international markets by taking advantage of its close location next
to the world largest oil producer.
References:
Menet, G. (2016). The importance of strategic management in international business: Expansion of
the PESTEL method. International Business and Global Economy, 35(2), 261-270.
Lu, W., Ye, K., Flanagan, R., & Jewell, C. (2013). Developing construction professional services in the
international market: SWOT analysis of China. Journal of Management in Engineering, 29(3), 302313.
Tuncalp, S., & Al-Ibrahim, A. (1990). Saudi Arabia’s petrochemical industry: Growth and
performance. J. Energy & Dev., 16, 287.
Alolayan, A. A., & Richards, D. (2015). Internationalization of Chemical MNE Corporation: A case
from Saudi Arabian Corporation” SABIC”. In ICSB World Conference Proceedings (p. 1). International
Council for Small Business (ICSB).
Alotaibi, H. J. (2015). An assessment of the connection of elements in a strategic plan: A case study
of Sabic company. International Journal of Advanced Research in Management and Social
Sciences, 4(10), 19-36.
Respond of 2nd post: