Mobile Phone Market in UK: 2018 and 2019
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Added on 2020-10-23
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ECO-FONE INTRODUCTION 1 TASK 11 Mobile Phone Market in UK 1 TASK 21 Forecasting the UK adult smartphone use for 2018 and 2019 1 TASK 32 Growing Popularity of Smartphones among older generation 2 TASK 43 To Expand or Not to Expand3 TASK 54 (a) Cost of acquiring new building4 (b) Popular Commercial mortgage lenders in the UK 5 TASK 67 Comparative Study of Putney as well as Richmond's Daily Net Takings 7 TASK 77 Evaluating
Mobile Phone Market in UK: 2018 and 2019
Added on 2020-10-23
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Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Mobile Phone Market in UK.......................................................................................................1TASK 2............................................................................................................................................1Forecasting the UK adult smartphone use for 2018 and 2019 ...................................................1TASK 3............................................................................................................................................2Growing Popularity of Smartphones among older generation....................................................2TASK 4............................................................................................................................................3To Expand or Not to Expand......................................................................................................3TASK 5............................................................................................................................................4(a) Cost of acquiring new building..............................................................................................4(b) Popular Commercial mortgage lenders in the UK................................................................5TASK 6............................................................................................................................................7Comparative Study of Putney as well as Richmond's Daily Net Takings .................................7TASK 7............................................................................................................................................7Evaluating Customer Satisfaction and drawing inferences thereof............................................7TASK 8............................................................................................................................................9Appropriateness of Poisson Distribution in the context of Eco-Fone.........................................9CONCLUSION..............................................................................................................................10REFRENCES.................................................................................................................................11APPENDICES...............................................................................................................................12
INTRODUCTIONTechnology has become more advanced in the recent years. The most affected segmentdue to the advent of this innovation is the smartphone segment (Chan and Yee-Loong Chong,2013). This assignment sought to study the changes in the aforementioned market in context ofEco-Fone, a smartphone business. The company mainly deals in Smartphone and accessories.They have two retail shops viz. one in Putney and another in Richmond. This report aims toprovide a brief discussion about the overview of mobile phone market in UK and analyse cross-border expansion opportunities, challenges as well as quality assurance procedures. Also, adetailed discussion regarding product, customer satisfaction and sources of finance has beencarried out in relation to Eco-Fone.TASK 1Mobile Phone Market in UKA Mobile Consumer Survey was conducted by Deloitte UK in 2017. Through thisscrutiny, the company aimed to find the mobile usage in the UK market. There has been aconsiderable increase in the usage of smartphones. This has led to an increase in annual sales ofhandsets by 1.5 million. The Adult Population recorded a usage rate of 58% and is expected togrow to 90% by the end of 2020 (Deloitte, 2017). The Survey attributed this increase to thegrowing popularity of smartphones as a medium to help its users organize its day-to-dayactivities both in personal as well as work-life. There are roughly 33.5 million users working outof which 32 million use mobile phone as a sole medium for completing work-related chores. Assmartphones have helped many in solving, sorting as well as simplifying personal and workspace, a rapid growth is expected in future as well. Also, features such as E-mail, Messaging,Video Conferencing, Reminders, Calender provide better organisation of work commitments.Apart from this, there has been a growing trend among older consumers buying high-endsmartphones with a motive of mobile entertainment.TASK 2Forecasting the UK adult smartphone use for 2018 and 2019 Deloitte Report of 2017 regarding Adult Smartphone Use stated that 17 percentpopulation used their smartphones 100 times in a day. This demographic included users aged1
between 16 to 24 years. Also, it was observed that 12% of the same segment checked theirphones 200 times a day. 34 percent of smartphone users aged between 16 to 75 years weredeclared addicted to mobile using them even while having food or in social gatherings. Similartraits of addiction were found for the 49 percent of demographic including consumers of 16 to 24years of age. On the other hand, 11 percent of people falling under the age segment of 16 to 75years were found to be using their smartphones while crossing roads. More than 53 percent ofpeople exhibited the same habit while walking on side-walks (Smartphone sales boom, 2019).Thus, it can be concluded that smartphone users of age group 16 to 75 years tended to use theirhandsets more in comparison of others. TASK 3Growing Popularity of Smartphones among older generationIncreasing dependence on smartphones for daily usage has made an uproar not onlyamong the millennials but also older consumer base. This has resulted in an increase in sales ofsmartphones in recent years. It is indicated that 71% of the consumers falling under thedemographic of 55 to 75 years of age own a smartphone. In addition to this, this rate has grownrapidly, especially in past five years, as more consumers have sought to adapt to digitalrevolution. Conversely, the usage rate for this segment is still falling behind as compared to theyounger demographic segments. This can be exhibited by analysing the rate at which consumerscheck their phones within 15 minutes of waking up conducted for 1,163 people between Mayand June 2017. Only 20% of the older consumers admitted to this habit in comparison to anational average of 56%.The key features that can be identified as underlying force driving consumers to displaythis buying behaviour are:Possession of excess wealth in the hands of older consumers compared to their youngercounterparts is one possible factor that may guide such demographic to invest in premiumhandsets;As younger generation is tech-savvy, they tend to replace their handsets as and whennew models are introduced in the market. As a result, they hand down their older modelsto their parents. Replacing such older handset models with new is one feature that is2
likely to have boosted sales among older consumers (Chetlur and Dhillon, 2018) (Islam,Kim Cheng Low and Hasan, 2013);With digitalisation of payments among public utility such as parking meters has led to anincrease in demand for mobile phones. Pressure to make a handset purchase is also acontributing feature that has increased sales for such consumers (Engage with the newgeneration of seniors, 2019);Highly user-friendly interface in terms of software, bigger screens as well as louderaudio is one distinctive feature that has affected smartphone sales in recent years amongolder demographic. As their eyesight deteriorates, such devices are helpful as well aseasier to view providing them convenience.Growing popularity of Facial Recognition feature among the demographic. This featuresimplifies operating handset by just looking at it instead of pressing multiple buttons ortyping passwords. As a result, sales for such smartphones has also been affected to agreat extent (Jayaram, Manrai and Manrai, 2015). TASK 4To Expand or Not to ExpandCross-border expansion is a crucial asset for the survival of any business. For Eco-Fone,the operations are currently located in two shops of Borough of Richmond. As per the anecdotalevidence collected by the company, it is observed that Eco-Fone is in a growing stage of itsproduct life cycle. This means that engaging in cross-border expansion would be the perfectopportunity for the business to increase its operations, revenue as well as profits.For this purpose, Kingston has been chosen as one of the potential areas for company'soperations in Canada. In order to weigh the options critical to the success of company's newventure a pros and cons method has been summarized below:Should we expand our business to Kingston?ProsScore/10ConsScore/10Increased Revenue9Cultural Barriers5Brand Awareness8Currency Risk6Accessibility to a larger Customer Base8Attractive Foreign Investment Incentives6Growing Stage of Business' PLC8Highly Skilled Workforce 73
Innovation-driven Market8Total Pros54Total Cons11Average Pros6.75Average Cons5.5As per the above table, Kingston offers a wide array of opportunities in the form ofhighly skilled labour, attractive investment incentives in the form of tax deductions, free tradezones. Also, the economy includes a highly innovative market which is important for asmartphone based organization like Eco-Fone. As the company is thriving, it is only sensible tosay that being able to expand business to Kingston, the company will enjoy increased revenue,brand equity through increased customer recognition with its products as well as an enhancedcustomer base. The only two challenges the company is likely to face are the cultural barriers inregards to values, beliefs of Canadian Society as well as Currency Risk. These are, however,manageable through formulation of optimal business strategies for pricing, targeting, segmentingand positioning the product accordingly. As the pros outweigh the cons, the company shouldexpand their business operations to Kingston.TASK 5(a) Cost of acquiring new buildingEco-Fone has decided to expand its operations to Kingston. For this purpose, arequirement of highly-suitable premises has arisen. Since the company will be paying an EqualMonthly Instalment, it will give flexibility and affordability for the company to apportion itsexpenses with lesser burden to repay their debts. A brief break-up of this loan has been providedbelow whereas a detailed calculation has been described in Appendices 1 of this report:Loan Amount£350000Number of EMIs180Annual Interest Rate0.07Monthly Interest Rate0.00583Monthly EMI Payment£3145.90Total Loan Amount Payable£566261.81Total Interest Payable£216261.81As the company prefers owning of property rather than taking a commercial plot of landon lease, the acquisition cost for the same has been ascertained at£400000. On the other hand,Eco-Fone has decided to undertake a mortgage loan for the same. This loan's principal has been4
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