Business Analysis - Academic Article - Wi-Fi in Malaysia

An article published in the American Journal of Economics & Business Administration explained a study done in Malaysia addressing the implications of providing free Wi-Fi in order to gain a competitive advantage within the fast food industry. Due to the intense rivalry that exists within this industry, as with many industries across the globe, it is important to analyze various resources that can be effective at growing market share and revenues.

Porter’s five forces model was used as the template for this study. They used this model to determine if the use of free Wi-Fi indeed provides a competitive advantage. The findings indicated that as the infrastructure for Wi-Fi grows within Malaysia there is a huge increase in demand that currently exists. On the supplier side of the model there currently exist multiple suppliers which help control cost by giving restaurant owners several choices between internet service providers. New entrants are currently a marginal concern. Rivals that choose to implement Wi-Fi currently only marginally reduce the original gain in revenue seen from the initial free Wi-Fi offering. Substitutes were identified as other growing technologies that could be used as a competitive advantage.

“Based on the findings, it is concluded that free Wi-Fi can be used as a competitive advantage tool for food outlet to be adopted. The reason is that all the five forces of the Porter’s model are showing positive signs” (Mohd, et al 356).

There are a couple of important implications provided by this article as pertaining to a business analysis standpoint. Intense demand for Wi-Fi, combined with the supporting data which indicated an increase in revenue resulting from supplying it for free, clearly indicate the practicality of embracing the use of this resource. However, something a little more foresighted I took from this article was the implications for other emerging technologies. As more restaurant owners embrace free Wi-Fi the revenue increase from free Wi-Fi will diminish. It will be the owners that keep their eye on the next technology that will offer a competitive advantage that will stand to gain the most in the future, as were the first adopters of free Wi-Fi in the past.

I believe currently as the market stands in America the second implication would be the most useful. For the big players in America Wi-Fi  has somewhat reached a point of unquestionable offering. However, this article was an important reminder that managers must always be scanning the horizon in order to be a trend setter rather than a trend follower. New technology creates excitement in the markets. If emerging technologies are used properly game changing competitive advantages can be realized.

Works Cited:

Mohd Khairudin Kasiran, et al. "Free Wifi As StrategicCompetitive Advantage For Fast-Food Outlet In The Knowledge Era." AmericanJournal Of Economics & Business Administration 3.2 (2011):352-357. Business Source Complete. Web. 5 July 2012.

http://thescipub.com/abstract/10.3844/ajebasp.2011.352.357