Dialog is based in Sri Lanka and is a part of the mobile telecommunication industry. The company offers various services ranging from fixed telecommunications to television. In addition, the organization has established itself in the financial domain as well through Dialog Finance PLC. The PESTLE analysis of Dialog elaborates the impact of Sri Lankan macro environment on the company operations and business decisions.
Political Factors
The political unrest in Sri Lanka had resulted in disruption of the functioning of various organizations. The unstable political climate, high risk of violence and protests across the country made the business environment highly unfavorable for the different firms. There have been cases where the firms had to deal with significant loss due to the turmoil.
As a result of the implications of the political crisis, the Sri Lankan telecom sector was also affected by the political predicament. However, the strong financial position of Dialog enabled the management to handle the impact of violent political environment and maintain flow of business operations (Aman, 2022).
Corruption is a dominant issue in Sri Lanka and different segments have to manage business operations while dealing with the bribery and other corrupt practices. In order to tackle this challenge Dialog has put in place a strict no gift policy (Dialog Axiata PLC, 2021). This step has enabled the company to maintain integrity based business conduct despite the high corruption.
Economic Factors
Economic crisis in Sri Lanka has created massive disturbance across all sectors of the country. Prices of commodities have increased significantly, and the high inflation has made it difficult for the consumers to manage their living expenses. The out of control price hike along with declining income has made the economy highly unfavorable for organizations in the country.
In addition to this, the increasing prices of fuel and other expenditures exerted pressure on the cost structure of companies. Dialog has reported issues due to the increased cost which was connected with the high prices profitability (Pham, 2023). Sri Lanka was also facing long hours of power cut which created barriers in the smooth operations of the company.
The changing economic dynamics and the overall decline had a negative effect on the ability of the consumers to purchase the services by the company. However, a favorable development recently is the high FDI which shows the probability of economic stability of the country. Dialog has to navigate through these economic challenges and maintain its.
Social Factors
The population expansion indicates that the number of users is increasing which is beneficial for the company. It has a large customer base, reflected by 94% of the population being the user of its telecommunication services. The inclination of people to use telecommunication services and increasing users of mobile phone and internet benefit the company.
The services being offered by the company are a reflection of the social trends and customer demand. For instance, the offer of Pay-As-You-Go Usage has been created to fulfill the requirements of those customers who were seeking a more flexible payment option and data use (Dialog Axiata PLC, 2021).
Another segment which the company has been able to grow is Dialog TV.
The development of this domain was achieved through focusing on loyalty rewards and competitive pricing. The pandemic has boosted the pace of digital adoption and online purchasing among the customers. The company provided its customers with the option of online delivery of the Dialog TV.
COVID has changed the way customers carried out their day to day activities. Dialog has aligned its business operations with the changing needs of the people during pandemic. Since social distancing necessitated the need to carry out work from home, the company has offered work and learn package to focus on the requirement of such individuals.
Technological Factors
Since Dialog is operating in the telecommunication sector, the company heavily relies on technology to provide seamless and good service to the customers. The developing infrastructure framework of Sri Lanka supports the company in the expansion of its reach to the customers. Furthermore, Dialog has made significant investment in the growth of technology infrastructure.
One of the ways through which technological advancement have helped the company to expand its operations is through MyDialog App. The use of app allows the customers to connect with the company through digital medium. Another way technology has facilitated the organization is through expansion of its service portfolio.
The company has maintained its strong market position on the basis of focus on innovation such as 5G. In 2020 Dialog ViU has been launched, indicating the way technology shapes the service offerings and future directions of the management. In addition, the investment in testing 5G suggests the management’s focus on being a pioneer in the technology domain in Sri Lanka (Barton, 2023).
Legal Factors
The data privacy of the customers is of prime importance in the domain of legal framework for Dialog. The management has to make sure that the data privacy is kept intact and related cyber security tools are in place. In addition, the legal requirements outlined by Telecommunications Regulatory Commission of Sri Lanka (TRCSL) have to be followed by the company.
Dialog is also required to follow the employment and labor laws to ensure that it doesn’t face any legal ramification. For instance, the implementation of equal employment opportunity is linked to the law related to fair treatment of employees. The management also focuses on Bribery Act and has developed company policies integrating anti-bribery business practices (Dialog Axiata PLC, 2021).
Environmental Factors
Sri Lankan government has developed environment protection laws and regulations identifying the changes businesses need to make to lower their emissions and environmental harm. The environmental protection laws are being followed by Dialog and its business practices have been aligned with the related regulations.
Climate action policies of Dialog emphasize limiting the harmful impact of the company on the environment. The company has implemented ISO 14001which helps the management in maintaining eco-friendly business operations. This system is also connected to the net-zero emission goal of the management (Dialog Axiata PLC, 2021).
Conclusion
Dialog has been able to cope with the political and economic turmoil and continued to grow due to its focus on innovation. The use of technological advancements supports the company in achieving development goals. Due to unfavorable business environment the company faces rising cost and is seeking ways to handle these pressures.
References
Aman, A. S. (2022). Sri Lanka turmoil to hit hard but Axiata expects ops there to withstand. New Strait Times. Retrieved from: https://www.nst.com.my/business/2022/05/795781/sri-lanka-turmoil-hit-hard-axiata-expects-ops-there-withstand
Barton, J. (2023). Dialog successfully trials 5G ahead of 3G shutdown. Developing Telecoms. Retrieved from: https://developingtelecoms.com/telecom-technology/wireless-networks/14371-dialog-successfully-trials-5g-ahead-of-3g-shutdown.html
Dialog Axiata PLC (2021). Annual Report. Retrieved from: https://cdn.cse.lk/cmt/upload_report_file/389_1653904111630.pdf
Pham, M. (2023). Dialog Axiata records loss due to high costs. Developing Telecoms. Retrieved from: https://developingtelecoms.com/telecom-business/operator-news/14540-dialog-axiata-records-loss-due-to-high-costs.html#:~:text=Dialog%20Axiata%20dropped%20to%20a,growing%20revenue%20across%20its%20segments.