1. Assignment 2, task 1, Q2
(Sample answer)
Business Environment
Your name
Your name

2. Task
• Use a range of examples to illustrate the
Use a range of examples to illustrate the
relationship between market forces and
SingTel s responses
SingTel’s responses (3 b)
(3 b)

3. Agenda
• Market forces
Market forces
• Demand and Supply
• Major factors that influence demand and
j f h i fl d d d
supply
• Major impact on SingTel
• SingTel’s responses
g p
• Conclusion

4. Market forces
Market forces
• Market forces are economic factors that affect
Market forces are economic factors that affect
the price and availability of a product or a
service in a free market
service in a free market

5. Demand and supply
Demand and supply
• Forces of demand and supply representing the
Forces of demand and supply representing the
aggregate influence of buyers and sellers on
price and quantity of the goods and services
price and quantity of the goods and services
offered in a market.

6. Excess demand
Excess demand
• Excess demand causes
Excess demand causes
prices and quantity of
supply to rise
• Example – Excess
demand of Iphone allows
SingTel to command the
prices and supply due to
its exclusive distribution
i l i di ib i
arrangement with Apple

7. Excess supply
Excess supply
• Excess supply causes
Excess supply causes
prices and quantity of
demand to fall
• Example – Price of
broadband internet and
cable TV channels fall
when SingTel
introduced its
i d di
brandband and Moi TV

8. Major market forces that influence
demand and supply
d d d l
• New entrants and substitutes
New entrants and substitutes
– Potential threats from new entrants and
substitutes
• Competition among exiting rivalry
– Local competition in all markets
• Regulatory forces
– Enforcement of rules by the Telecom Regulators

9. Regulatory forces
Regulatory forces
• Singapore telecom market is regulated by Info‐
g p g y
communications Development Authority of
Singapore
– Promoting effective and sustainable competition;
Promoting effective and sustainable competition;
– Promoting facilities‐based competition to the greatest
extent possible;
– Relying on market forces;
– Adopting proportionate regulation;
– Remaining technology‐neutral; and
Remaining technology neutral; and
– Providing a transparent and reasoned decision‐making
process.

10. Major impact on SingTel
Major impact on SingTel
• Loss of domestic market share
Loss of domestic market share
– More choices for customers
• Restricted market influence
– IDA’s rules and regulation

11. SingTel s responses
SingTel’s responses
• Response to loss of domestic market share
Response to loss of domestic market share
– Embark on regionalisation enlarging its customer
base covering Singapore, Indonesia, India,
base covering Singapore Indonesia India
Thailand and Australia
– Build economies of scale through an enlarged
Build economies of scale through an enlarged
market
• Response to threats from new entrants
Response to threats from new entrants
– Building economies of scale through the enlarged
regional market
g

12. SingTel s responses
SingTel’s responses
• Response to competitive rivalry (Singapore)
Response to competitive rivalry (Singapore)
– Backward integration by selling content, i.e.
MioTV instead of just merely a broad band
instead of just merely a broad band
supplier
– Exclusive distributorship for Apple’s I‐phone
Exclusive distributorship for Apple s I phone
leading to a monopolistic position in the Asia
region
• Response to Regulator
– Collaboration with competitors by allowing them
p y g
to share telecom network

13. Conclusion
• Market forces have impacted SingTel
Market forces have impacted SingTel
• Si
SingTel responded by its regional and channel
l d db i i l d h l
strategies to strengthen its leading position in
Asia including Singapore telecom market
A i i l di Si l k