Understanding Swot Analysis of China Mobile Limited

As a result of China Mobile’s rapid expansion and customer growth, the company has recently been generating headlines worldwide. After being viewed as an inefficient and unreliable state-owned corporation in the past, it has subsequently transformed itself into a dominating company in China with worldwide aspirations and aims to dominate the international market. The following SWOT Analysis of China Mobile Limited demonstrates that the company can make the most of its strengths and minimise its weaknesses to turn threats into opportunities and stay a major player in the industry. 

SWOT analysis of China Mobile Limited has many Strengths 

Because of China’s rapid economic growth over the last few decades, China Mobile was virtually unknown in Western capitals or among Western investors a decade ago. If the 2007 list of the Top 100 Most Important Brands is any indicator, China Mobile has attained global fame. Although the company has a large client base (estimated at over half a billion), it is important to highlight that these numbers are mostly due to the company’s dominant presence in the country. There has been a 50% annual increase in mobile phone use in China, placing the country far ahead of its global competitors in just a few years. 

The company believes that Africa is the next frontier for growth when it comes to acquisitions and expanding its operations. Because of this, they have made numerous acquisitions of other companies to maintain a steady rise in income. China Mobile has purchased several Chinese mobile phone companies throughout the years: Jiangsu Mobile (1997), Fujian (1999), Henan (1999), Hainan (1999), and Beijing (1900).

Analysis of China Mobile Limited’s Weaknesses 

Even though it boasts significant market share and sales volumes, China Mobile’s inability to stay on top of technological advancements is a serious shortcoming of the company. In part, this is because the company was unable to seamlessly migrate to the 3G network due to the difficulties it encountered switching from CDMA to GSM protocol due to older devices and associated complications. China mobile’s other drawback is that it has so far focused mostly on the local market.  

There was talk of it expanding internationally, but its failure to penetrate the developed west shows a lack of confidence and hesitation in taking on global giants in their backyard, as we’ve previously said.  Even as it expands throughout Africa, China Mobile relies largely on local partners, which means that it has yet to build a worldwide brand of its own. 

Because of this, they are unable to compete head-to-head with the rest of the globe. 3G was a difficulty for them, and even when it worked, it was subpar compared to the competition. One of the primary causes of complacency is a lack of rivalry.

Swot Analysis of China Mobile Limited: Opportunities

Because of China’s tremendous economic growth, the company’s subscriber base is expected to grow significantly. However, if the local market becomes hot, the company may be forced to go outside of China for growth in the future. But this doesn’t negate the fact that China Mobile is on its way to entering the fast-growing domestic market, albeit in a less aggressive manner than in recent years. 

These kinds of growth rates are unheard of in the developed western world, which has delighted investors in China’s state-owned enterprises (SOEs), including this one. To make up for its lack of 3G capability, it can get into China’s rural market, which is still underserved by its competitors. So, China Mobile can begin over without the weight of its past businesses. The rural hinterland is a natural next step for China Mobile when metropolitan regions reach their capacity. There is still a long way to go before China’s rural market reaches its full potential. You can expect the company to grow significantly in the future. These rural markets should be investigated in the same way that emerging economies’ rural markets were investigated. 

China Mobile sees a lot of potential in countries with a growing need for telecommunications services. A large market exists in countries like India, where a telecom war is already raging.

The rural Chinese market is still in its infancy. The business has a lot of potential because of this. Similar to rural markets in emerging economies, it’s a good idea to look into these markets.

Analysis of China Mobile Limited’s Threats 

Despite recent discussions by the Chinese government to open up the telecom sector to foreign corporations, the country’s telecom industry remains highly regulated and isolated. Additionally, China Mobile must keep an eye out for local and domestic competition as the sector opens up in the future. 

In addition, China Mobile’s “numbers game” of adding customers primarily in the low-price, low-value category means that it is a volume player rather than a premium one, which poses a significant risk to its profitability. To remain competitive in the face of recent technology advancements like 4G and even 3G, China Mobile must offer more high-value services. In part, this is due to its status as a state-owned enterprise (SOE), but as the Chinese economy gradually opens up, the government may begin to weigh social benefits against commercial benefits. 

It is harder to give a high level of service to clients due to an increase in customers and a lack of available channels. This causes call dropouts and overlapping conversations.

Conclusion 

Before embarking on its international trip and maintaining its local market dominance, China Mobile has its work cut out. Since its IPO (Initial Public Offering) in 1997, several Western investors have expressed interest in its stock, which is a remarkable feat considering that the company’s rise from a small player to a market leader was largely unnoticed outside Hong Kong.