Eco Fone: Analysis for Expansion to Kingston

This document discusses the analysis for expanding Eco Fone's business to Kingston. It includes market research, pros and cons, financial considerations, and more.

ECO FONE

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
a). Mobile market in UK..............................................................................................................1
b. On the basis data, presenting bar chart for the top 4 activities................................................1
TASK 2............................................................................................................................................2
Line Chart on use of Smartphone in UK.....................................................................................2
TASK 3............................................................................................................................................3
Features making smart phones popular in older people..............................................................3
TASK 4............................................................................................................................................4
Analysis for expansion to Kingston.............................................................................................4
TASK 5............................................................................................................................................5
a) Calculation of monthly cost for repayment mortgage for 15 years of 350000........................5
b) Graph representing eight logos of the commercial mortgage lenders.....................................6
TASK 6............................................................................................................................................6
Testing the significance between the valuation of two shops......................................................6
TASK 7............................................................................................................................................8
Descriptive statistics....................................................................................................................8
TASK 8............................................................................................................................................9
Poisson Distribution.....................................................................................................................9
TASK 9............................................................................................................................................9
REFERENCES............................................................................................................................9
TASK 10........................................................................................................................................11
Summary....................................................................................................................................11

INTRODUCTION
Eco Fone is a cell phone company selling Smartphone as well as accessories from Putney
and Richmond shops. It is not selling tablets or laptops. It incepted its business in 2014 and
earned steady growth in its profits. It has been seen that there has been significant rise in the
number of customers that are buying the smart phones for the first time. Report is based on Eco-
fone a smart phone company that is planning to expand its business to other parts also. Study
consists of various studies for assessing the viability of expansion project. It will analysis of
various statistical tools and concepts for carrying out different research of the project.
TASK 1
a). Mobile market in UK.
Mobile market of UK is performing well since the recent years. In UK around 32million are
working from the working force comprising of 35.5 million. During th mid of 2017 Smartphone
were mainly used by the workers for doing email, voice calls and for calendar management.
Other complex application and functions were not used by those workers. Unofficial application
are also there in the smart phones such as navigations, browsers, navigations and photo
application are widely used by the users (Ayaz And et.al., 2016. Around 43% ok workforce uses
Whatsapp once in a day at least. The usage of Smartphone was modes that was related only with
work and not with communications.
In these workers only 5% used Smartphone for submitting the timesheet, 4% to submit the
expenses and 6% for accessing intranet. There are million in the workforce that use Smartphone
for getting the ideal information without the requirement of PC or tablet. There are worker that
require complete setup of computer but majority of workers only require Smartphone for
receiving the contextual information on timely basis. Smart phone usage among the workers
have increased to significant level (Growth of UK phone market, 2019). Workers are using the
smart phones mainly for making emails and for making calls and many of the also use them for
viewing the documents on their Smartphone without the use of computer or desktop.
b. On the basis data, presenting bar chart for the top 4 activities
Particulars 2016 2017
Making Email 41.00% 37.00%
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Standard calls 33.00% 32.00%
Managing workload 8.00% 6.00%
Use of intranet 6.00% 6.00%
TASK 2
Line Chart on use of Smartphone in UK
Linear forecasting refers to the statistical tool used for making forecast about the future
trend based on past movements. It is also known as linear trend line model depending over the
regression model. This makes forecast based on the dependent variables. It is used when variable
used are time series and therefore it is essential identify the time patterns (Linear Forecasting,
2019). This requires a dependent variables as well as independent variables. This is only
applicable where relationships between the dependent and independent variables are linear.
It could be used in the present asset as the relation his between the variables is not
similar. Although the variables involve time series but the relationship between them is not
linear. It involves three variables that is laptop, tablet and Smartphone.
Regression analysis
It is a powerful statistical tool used for determining th interests of two variables.
Regression analysis is calculated by identifying the dependability of the variables over each
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other. This is used for identifying the relationship between dependable and independent variables
(Regression, 2019). Regression has been used for forecasting the usage of smart phones by adults
in UK.
TASK 3
Features making smart phones popular in older people
Smartphone market is working well and has made more popular among the older
customers. Around fourteen million people in UK belong to age group of 55-75 years old. The
adoption rate among the older people is much high as compared with other age groups in the
recent five years. Adoptions has increased but the usage is not as high as the young people.
Around 20% of the older age group checked their smart-phone in fifteen minutes compared with
3
2012 2013 2014 2015 2016 2017
0%
10%
20%
30%
40%
50%
60%
70%
80%
90% f(x ) = 0.0651428571x + 0.482

the 56% of national average. 50% have Facebook application that is 70% in all adults (Old age
user, 2019). People between the age group of 55-75 years having average wealth use to buy
premium phones.
Some have started using as the result of strict instruction to children for handling the smart
phone. The increases use is also due to several factors that makes it essential for then to use the
Smartphone. Most of the parking meters accept online payments. It has facilitated customers
with great convenience getting through the use of apps in the cities, searching information. The
screen of these Smartphone are much bigger than the older ones and are also having louder
speaker that are easier to use by old people (Pasetto And et.al., 2018). Regular update of the cell
phones over the years has made the usage of phones much easier. Enhanced features are enabling
the older group to use them for many purposes such as for listening to their music, video callings
and easier payments without carrying cash.
TASK 4
Analysis for expansion to Kingston
Eco-Fone is carrying its operations through two shops in Richmond. Company has not operated
out of the border in Kingston. The research evidences show that the business may thrive and the
success factors and weaknesses are identified using the pros and cons method.
Expansion of Business in Kingston
Pros Score/10 Cons Score / 10
Increase in Brand recognition 7 Insufficient Resources 4
Increase in revenues 6 Financial challenges 5
Increased market share 8 Legal compliance 6
Wider customer base 7 Quality compromises 4
Increased profitability 6 Increased costs 5
Innovations 5 Supply chain issues 3
Diversifications 8 Risk exposures 5
Total pros 47 Total Cons 32
Average pros 6.7 Average Cons 4.57
Analysis
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Outcomes show that the company should expand its business in Kingston. These metrics
have been made after carrying out the market research about the Kingston. Market research has
shows that expending the business to Kingston will help the company increasing it markets
share in the new locations by increasing the customer base that are being served by company.
Revenues of the company will be increased due to business expansion. Expansion across borders
will also lead to brand recognition. There will be new sources of innovations after analysing the
need and requirements of people.
Innovations will lead to increased profitability and this may also help it in diversification
of the business. On the other along with the number of pros there are cons too. Company will
face difficulty mainly regarding the legal compliances of the place. There are number of
regulations that are required to be complied for establishing business. Other factor significant
weightage is risks exposure that are the uncertainties of the business environment in the new
market. It may financial issues in Kingston related with raising capital being a new business.
Average of pros is 6.7 where average of cons is 4.57 that shows that pros are higher than the
cons. Therefore Eco-fone should expand its business in Kingston.
TASK 5
a) Calculation of monthly cost for repayment mortgage for 15 years of 350000.
Mortgage repayment period = 15 years
Loan payment = Sum of the loan amount / Discounting factor
= £350,000 / ({[(1+0.07)^15]-1} / [0.07 (1+0.07)^15] )
= £350,000 / 13.75
= £25455
Monthly repayment = £25455 / 12
= £2121
Interpretation-
Calculations of the 15 year mortgage shows that it will require to pay £2121 every month.
The mortgage is based over 7% interest rate per annum. Monthly payments will reduce the
burden to pay yearly or quarterly payment of the instalments for the mortgage loans. Loan is
availed for establishment for expansion in new location. New business premise will be purchased
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company using the loan in central Kingston. Loan will help the company in getting tax benefits
as well as will not cause burden over company in single amount.
b) Graph representing eight logos of the commercial mortgage lenders.
TASK 6
Testing the significance between the valuation of two shops.
There are 2 shops through which it sells accessories and phones. Both the shops are
running successfully but company wants to analyse the results of both the shops in terms of net
takings.
Calculations identifying the net takings for the same using 5% level of significance.
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Analysing the value of Z-score
H0: There is no statistical difference between mean value of net taking pertaining to two
shops.
H1: There is a statistical difference between mean value of net taking pertaining to two shops.
Interpretation- On the basis of table 1 it has been presented that the value of Z-score
resulted as 0.5 which is greater than 0.05 that in turn means null hypotheses is accepted and the
other one is rejected and reflects there is there is no significance difference between the mean
value of the net takings of the two shops. Similarly, as per table 2, Z-score value accounted as
0.25 which means that null hypotheses accepted and alternative is rejected as the value is higher
than 0.05.
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TASK 7
Descriptive statistics
Interpretation- The above analysis shows the different mean value of different variables
that are been considered in the study. Such variables shows the response of the participant
against different questions. With respect to question 1 which states that the customers buys the
products and services of the company in 3 to 6 months as its mean value resulted as 3 so option 3
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will be counted. Similarly for other questions, in accordance with the mean value respondents
answer to each and every question is been indicated.
TASK 8
Poisson Distribution
It is a discrete method used in probability distribution for assessing number of events that
are occurring in the given time, given average number of time that event is occurring over the
time. Poisson distribution refers to the model that is used to describe the events that are occurring
randomly. It is used in the present case for identifying the probability the events occurring in th
given time period.
Interpretation - It could be interpreted from the above results that the company is having veryu
low Poisson distribution. The random variable is only 2 from the 10000 invoices during the
month. The probability of errors greater than 2 is zero for the company. This shows that the
performance of company is excellent. The quality procedures of the company shows that it is
working effectively (Wang, Li and Mishima, 2019). The quality procedures should also be
established in the new expansion in Kingston for having more satisfied customer base due the
quality products being served to them.
TASK 9
REFERENCES
Books and Journals
Ayaz, M. And et.al., 2016. Toward Eco Green Energy: Fabrication of DSSC from Recycled
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Phone Screen. International Journal of Resistive Economics. 4(1).pp.17-22.
Sinha, R. And et.al., 2016. Identifying ways of closing the metal flow loop in the global mobile
phone product system: A system dynamics modeling approach. Resources, Conservation
and Recycling.113.pp.65-76.
Pasetto, M. And et.al., 2018. Steel slag as valuable aggregate in eco–friendly mixtures for asphalt
pavements. In Seventeenth LJMU Annual International Conference on Asphalt, Pavement
Engineering and Infrastructure (pp. 1-11). -.
Wang, J., Li, W. and Mishima, N., 2019. The Effects of Collection Promotions on Resource-
Efficient Utilization and Resource Sustainability of Mobile Phone Market: A System
Dynamics Approach. In Technologies and Eco-innovation towards Sustainability I (pp.
135-146). Springer, Singapore.
Yalcinkaya, F. And et.al., 2016. Eco-Friendly Biodegradable Compostable Disposable Paper
Pulp Bagasse Dinner Plate. International Journal of Polymer Science.2016.
Online
Regression. 2019. [Online]. Available through : < https://towardsdatascience.com/the-poisson-
distribution-and-poisson-process-explained-4e2cb17d459>.
Poisson Distribution. 2019. [Online]. Available through : < https://towardsdatascience.com/the-
poisson-distribution-and-poisson-process-explained-4e2cb17d459>.
Old age users. 2019. [Online]. Available through : <https://www.bbc.co.uk/news/technology-41319684>.
Linear Forecasting. 2019. [Online]. Available through :
<https://corporatefinanceinstitute.com/resources/excel/functions/forecast-linear-function/>.
Growth of UK phone market. 2019. [Online]. Available through :
<https://www.statista.com/statistics/487780/market-share-of-mobile-device-vendors-uk/>.
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TASK 10
Summary
The above study has given significant finding related to the mobile industry. Smartphone
industry of UK is grown very fast which is a good opportunity for the company to grow its
business. It is focused over the consumers belonging to workforce. Adoption of the phone of this
age group is relatively high. They mainly use these smart-phone for sending mails and most
highly for reading the documents. It is also used for messaging and other tasks related with the
working. Advanced features and continuous up-gradation of the software according the need and
requirements is increasing the number of consumers in the workforce.
Further due to the positive outcome of the research carried out across borders related to the
market. It is planning its business to expand ist business to Kingston. Increasing its business to
Kingston will bring several opportunities and challenged for the business. By facing them
strongly company will acquire greater market share. Old age groups are also adopting the use of
smart-phones due to the various essential requirements related to daily life like parking payment,
booking taxi and such other features. On the basis of analysis between the two shops it is
identified that there is not much difference between the shops. They are performing equally well
and helping the organisation to grow (Yalcinkaya And et.al., 2016). Quality of the products
manufactured by company is adequate and inspection procedures have prevented the defaults
going out of the shops. Due to this reason there are very low returns or complaints by customers
of the shop. By maintain the quality procedures it can gain new heights.
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