Contents INTRODUCTION…………………………………………………………………………2
KEY ISSUES…………………………………………………………………………2
PROBLEM STATEMENT…………………………………………….2
EXTERNAL ANALYSIS……………………………………………………………….2
PORTERS FIVE FORCES (SEE APPENDIX 1)…………………………………………… 2
INDUSTRY STRUCTURE, ECONOMICS AND TRENDS…………………………………. 3
COMPETITOR ANALYSIS…………………………………………………….4
KEY SUCCESS FACTORS………………………………………………………………4
INTERNAL ANALYSIS…………………………………………………………………….5
COMPANY’S STRATEGY……………………………………………………………..5
FINANCIAL ANALYSIS…………………………………………………………………..6
OPERATIONS ANALYSIS (SEE TABLE IN APPENDIX 3)………………………………….. 6
MARKETING AND COMPETITIVE POSITION…………………………………………… 7
EVALUATION OF ALTERNATIVES……………………………………………………….. 7
A1: STATUS QUO (SINGLE GLOBAL
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Developing Markets: · Marketing, sales and distribution of the handsets is handled by the manufacturer. Vast distribution network and penetration in the market is vital for success. · Handset market in developing countries is volume driven market (low end handsets; low ASP) as well as price driven (high end handsets; high ASP) market. So, the revenue will be driven by both low end and high end handsets (see appendix 4). · Products that are launched first in the developed markets are adopted in the developing markets in future. A lot of new products are manufactured and launched only in the developing markets to tap low end phones market. Penetration in the developing market is through first time sale. The crux of the situation is that industry in developed and developing markets is changing in different way. 3 COMPETITOR ANALYSIS
The external environment for cell phone manufacturers is shifting from basic and enhanced phones to smartphones in the developed market and spread across the product lines in the developing markets. This shift is rapid in the developed markets whereas gradual in the developing markets. The competitors such as Samsung, Motorola, Apple and Google have quickly reacted to the change and adapted well. Apple, Google and Samsung have together threatened Nokia’s position as a leader in the developed markets. Samsung and LG are
Besides, there are always many new entrants enter the market with the flow of labor and capital (Laudon, 2014, pp. 124). Although the requirements for the entry to the mobile market is relative higher than others, the number of new entrants are considerable while customers are more selective. As a result, those companies like the T-Mobile in this case that are lack of competitive advantages will be omitted by customers. As for the substitute, the development of entertainment tools decrease the desire of the mobile phone although there is little instrument can replace the mobile phone
As illustrated in the graph below, this marked the first time since 1994 that revenues have declined. Regardless of this year 's decline, Nike Inc. achieved 300% revenue growth over a 10-year period, rising from 1990 sales of $2.235 billion.
- The smartphone industry is very capital intensive due to high research and development (R&D) costs and expensive manufacturing facilities. This raises the barrier of entry and makes it difficult for small companies to enter. Many of the firms that compete in this industry have existing long-term contractual relationships with mobile carriers and benefit from their significant brand equity. These companies also have a great deal of knowledge and experience through economies of learning, which gives them a major cost advantage over smaller entrants. New entrants will have difficulty getting carriers to adopt their phones because many carriers are already in profitable deals with the large mobile phone manufacturers.
Several years ago, the handset industry had healthy margins, but since 2001 the situation changed. Problems such as cost pressure, weak profitability and ongoing consolidation began to appear. The growth was getting slower. The U.S. and Europe markets were saturated. What to do then? Industry focused towards markets of Middle East, South Asia, Africa, China and India, where there was a high growth.
In this following report I will discuss the phone industry and analysed it in great detail. I will analysis the market structure and try and understand why the mobile industry falls to heavily oligopoly structure. I will highlight all the structures, however I will discuss in detail how, for example Vodafone can be incorporated in the porter’s five forces method to show how the mobile industry has devolved over the years and to understand if consumers are driven by the actual technology of the phone but if it driven more by style.
There are many competing brands of smart phones and Samsung has reported a decline of profits in 2014. Information from GSM arena shows than Samsung released 54 new phone models in 2014 , compared with 24 by HTC , 11 Motorola and 2 by Apple, leading to increased production costs and lack focus on a specific customer segments thereby losing some of its competitive advantage (GSM Arena , 2015).The lack of popularity of its own OS (Tizen ) and dependence on Google’s Android platform makes it vulnerable on google to develop an “ecosystem”. There are component integration issues as well as loss revenue from potential App sales (Strategic Mangement insight , 2015). Negative publicity from litigation due to patents are likely to continue as technology patents are vague and Samsung with is large portfolio is likely to infringe on some of the patents (Tibken, 2014).
Microsoft is a multinational corporation of the United States; It specializes in developing, manufacturing, trading software licenses and supporting a wide range of computer related products and services.. In terms of revenue, Microsoft is the world's largest software maker. It is also called "one of the most valuable companies in the world".
Intermediaries such as Carphone warehouse or network stores such as Orange also have other handsets readily available, which makes it difficult for Nokia to have a direct impact on the selling of their handsets2. Hence, bargaining power of buyers is high.
• Even though there were 50 companies in India selling mobile phones which is dominated by more than 60 percent share from Nokia there were still features, niches and categories that could be carved out by the new entrants
The phone industry in India of LG and SAMSUNG is one of the key success drivers of any growing economy and henceforth one of the world’s most important revenue generating sector. This industry has a wide range of organizations and companies which are engaged in the design, manufacturing, and selling of the products. It helps the improvement in various infrastructure facilities such as rail, road and power, thus playing a vital role in the rapid growth of the economic and industrial development. The Phone market is growing at a healthy pace because of the comparison with increasing levels of customers in India with respect to different companies in the larger phone markets of the world. Worldwide, the phone market has not only been focussing on manufacturing but also towards ensuring that one 's products are superior in terms of quality.
There are a few things that we have to worry about when entering the market. First is there are already established companies in the region that we would compete with so it will be hard to create a brand image. When we introduce our product it would be difficult to have a large market share due to the context of India’s culture. Since India takes a long time to adapt to a brand, becoming a cellular service provider would likely be an unprofitable business due to the fact that there are many established brands. However, selling our product to an established
Mobile phones have become most interactive communications tools available. They are now a necessity in the lives of anyone in this century. There are more than five billion mobile phone users globally, which represents over seventy percent of the world population. This is a very large market for any firm to promote its products and services.
Smartphone market is an emerging important market and is experiencing a wave of transformation with the emergence of new players (Basole and Karla, 2011). The competition among the smartphone markets is no longer simply through physical devices but though ecosystems, or platforms. This essay is going to look at the evolution of the market so far including how it will evolve in the future, whether a few firms will eventually dominate the market as well as the core business strategy is applied to the firms.
The mobile phone industry is a very innovative segment within the ICT sector and the smartphone is becoming the standard configuration among the different types of mobile devices which is face and Serving the nationals in the world, where people could easily to buy one as the price between $20 and $1000 in any phone stores nowadays.
The mobile phones’ market is a market in complete extension where giants in mobile telephony already captured the largest market share, such as Nokia or Samsung for example. They operate on several market and located anywhere in the telecommunication sector. Thereby, the consumers prefer to orientate themselves toward international brands to accomplish their purchase. The global brands have spent millions in advertising and promotion of their products; so they have created some sort of “brand loyalty”. M.Mobile faced difficulties to compete with their competitors in term of: