Mobile money transfer is a revolutionary step, introduced by the mobile remittance service providers in the country .It has given the opportunity for millions of migrant workers to transfer their hard-earning money effortlessly, efficiently and promptly. Even a few days ago, money transfer agencies were very rare in the rural areas and it was also very tough to use bank or agencies. Most of the time, the sender had to rely on the fellow workers, traveling home. Banks or agencies take 4/5 days or sometimes more. The introduction of mobile remittance service has brought that down to a few minutes.
If the telecom operators had to design the products on the whims of the suppliers because their output is unique, then the suppliers would enjoy absolute advantage in terms of bargaining power. But here this is not the case. Again, since the number of the suppliers is very limited say NOKIA & Ericsson and a handful number of network administrators, they (the suppliers) have this power to leverage on this, because this is limiting the choice of the operators and making the switching cost very high for them.
Barriers to entry, identified as one of the five forces, presents five structural determinants that affect a company’s ability to enter new markets; economies of scale, product differentiation, government as with telecom licences for example, favourable access to the distribution channels and capital requirements (Whittington and Melin, 2005). The government policies and regulations could also impose a significant barrier to entry in the telecom industry. For example, this industry is getting more concerned about the customers’ convenience, setting competitive price structure, invest in corporate social responsibilities which could be difficult to maintain by a new company.
The marketing mix of the industry can be broken down into the "4 Ps" of marketing. These are the parameters that the marketing manager can control, subject o the internal and external constraints of the marketing environment in order to make decisions focusing on the customers in the target market in order to create perceived value and generate positive response.
There is a very intense competition among the players in the telecom market of Bangladesh which characterized the rivalry within the industry is very high. Some of the major competitors are; Grameen Phone, Bangla link, Airtel, Robi, Citycell, Tele talk are all engage in continuous competition in terms of providing attractive offers. According to the Porter’s five forces model, the competition in an industry will continually drive down the rate of return generating negative influences on the profitability of firms in the entire industry. As noted by (Johnson, et al. 2005), Porter’s fifth force, competitive rivalry, is also an element addressed by the strategic group analysis where it considers competitive rivalry and how this forces both impact and it is impacted by other four forces.
Buyers in Porter’s five forces model tend to compete with the industry by forcing down prices and bargaining for higher quality products and services at lower prices (Grant, 2005). In our country the customers have absolute bargaining power. Because there are a number of operators in the market, the cost for switching loyalty is very low. Customers may want to switch from one operator to another for a better deal. Nothing can restrict this trend. In fact what we see is that every customer nowadays uses more than one mobile phone or at least owns more than one connection, and use them interchangeably.