“Internet Voice, also known as Voice over Internet Protocol (VoIP), is a technology that allows you to make telephone calls using a broadband internet connection instead of a regular (or analog) phone line”. (CBC News) There has been a marked increase in the number of VoIP subscribers from 6. 5 million in the middle of 2006 to 11. 8 million by the second quarter of 2007. This statistics is provided by the TeleGeography’s US VoIP Research Service.
The business in the network based providers segment has slowed down while the cable based voice subscriber business has grown tremendously. The research service has predicted a rise in the VoIP subscribers to the extent of 23. 3 million by 2011 and this growth is triggered by the telephony offerings through cable providers internet protocol services. (TeleGeography) Mitchell (2005) also confirms the revenue growth of VoIP in the future.
Backed by such a strong forecast World Telecommunications (WDT) envisages expanding the provision of VoIP services to the Russian American Community present in the United States. As the Russian American population is growing by every year (the population expected to reach 5 mullion people by the end of year 2006) there seems to be a good consumer potential in this market, whose buying power is estimated by the research from Global Advertising Strategy to touch $ 20 billion for the year 2006.
(Global Advertising Strategy, 2006) With this background this report presents an analysis of the current business stance of WDT as well as an internal and external analysis of the market to present the readers an idea about the business scenario of the VoIP market in the US. The report further discusses the strengths and weaknesses of the firm and also details about the corporate structure and culture.
The section on the corporate resources available with the company will enable the readers to make their own judgments on the capabilities of the company to expand in further areas. The business plan comprised in this report is supported by a financial projection with income statements for the next three years period when the company will be exploring the new market. To elaborate, the report begins with the analysis of the competitive strengths of the industry and also the regulatory issues governing the industry and other global factors are discussed in detail.
It may be appreciated that the VoIP is highly competitive with all the forces like competitor rivalry, threat of substitution, competition from new entrants and high bargaining power of both the customers and suppliers. There are a good number of competitors like traditional telephone service providers, numerous cable television service providers, internet telephone companies, companies selling calling cards and other software based telephone service providers.
The VoIP Federal Communications Commission (FCC) regulates all the issues connected with the provision of VoIP services. To augment the strength of this business plan it was necessary to examine the strengths and weaknesses of WDT and this was performed through an internal analysis and reported. WDT considers its ability to provide an efficient customer service and the existence of a dedicated workforce as the potential strengths that contribute to the success of the company.
However the company has to address some weaknesses which necessarily are to be eradicated to gain a successful entry in the new market and sustain the growth. The main issues in this connection are the lack of an effective brand name for WDT and the company also needs more financial resources to strengthen its advertising and sales promotion and also to compete aggressively with other competitors present in the market. Presently the VoIP market is offering a very high potential