Kingston Communications Assignment Example | Topics and Well Written Essays - 2000 words

Kingston Communications - Assignment Example Using "Porter's Five Force Model" (http://www.12manage.com/methods_porter_five_forces.html), let us see where the issues may exist for Kingston Communications. Porter's model states that thefollowing forces can affect how business relates to the rest of the marketplace: The problem that Kingston had in converting from what was then a traditional telecoms industry using analogue technology to modern digital technology was that they did not readily have the expertise, technology or the agreements in place with providers such as British Telecom, in order to compete against established companies, such as Skype and recently, Vonage. Since then there have been a proliferation of VOIP providers. Various broadband providers have included VOIP as part of their services, when originally all they provided was a dial-up service to access the internet, and later broadband. There are now several companies on the market providing integrated services, including broadband as an 'add-on' as opposed to a primary service as was the case in the recent past. Examples are Sky Television, Orange mobiles, and even BT have got in on the act, by offering digital services alongside their communications offerings. Therefore, Kingston is not alone in feeling the heat of the com petition, as others strive to win market share. How this has changed from a few years ago, and especially for Kingston Communications who used to have a monopoly on these types of service. Kingston probably recognized this as they acquired companies and organizations that had the technology and the resources available. This would make the transition easier, but it came at a price. The acquisition of Affiniti, the business communications integrator,Information Services providing contact centre and directory services, plus the development of their own broadband services would allow Kingston to compete on a level playing field. 2. Threat of substitutes. With regard to VOIP, a substitute phone serviceis exactly what happened.Once the technology for Voice over Internet Protocol (VOIP) was developed, it became a real threat, not only to Kingston, but other large telecoms companies such asBritish Telecom (BT).The real threat was in the cost of the service. For example, Skype offer a free telephone service to other Skype users. This is now standard among most VOIP providers. It became obvious to Kingston and other telecom providers that drastic decisions had to be made with regard to their technology strategy. 3. Bargaining power of buyers. With the proliferation of VOIP and integrated providers, the relative bargaining power of buyers in this market is relatively strong, especially for the average consumer. They can now choose between integrated solutions, such as digital TV and VOIP services, or choose a relatively low-cost broadband only solution. The costs of these services continue to decline, as more and more suppliers compete for market share. 4. Bargaining power of suppliers.In the early days of VOIP, perhaps the