Market Analysis of Mobile Phone Industry

STRATEGY

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................1
MARKET ANALYSIS....................................................................................................................1
Competitors.................................................................................................................................1
Geography and technology.........................................................................................................1
Buyers preferences and market segmentation.............................................................................2
Sub strategic groups in mobile phone industry...........................................................................2
Market shares..............................................................................................................................4
Porter five forces model..............................................................................................................4
PESTEL analysis.........................................................................................................................6
Deep dive on varied economic factors greatly affecting busienss..............................................8
Industry life cycle........................................................................................................................9
Product life cycle......................................................................................................................11
Industry size..............................................................................................................................12
Global capacity usage...............................................................................................................13
Sources of competitive advantage.................................................................................................14
Sources......................................................................................................................................14
Value chain analysis..................................................................................................................15
Cost per unit..............................................................................................................................16
Critical analysis of investment in R&D.........................................................................................18
Definition and benefits of R&D................................................................................................18
Industry analysis.......................................................................................................................18
Stakeholder analysis and recommendations as well as stakeholder management.........................19
Stakeholders needed due attention by firm...............................................................................21
Stakeholder management..........................................................................................................21
CONCLUSION..............................................................................................................................22
REFERENCES..............................................................................................................................23

Figure 1Global demand of product..................................................................................................1
Figure 2R&D expenses across firms for years................................................................................2
Figure 3Market share of firms for different years...........................................................................3
Figure 4Porter five force model.......................................................................................................5
Figure 5Business environment........................................................................................................6
Figure 6BOE base rate.....................................................................................................................8
Figure 7Use of mobile phones by people of UK.............................................................................9
Figure 8Product life cycle..............................................................................................................10
Figure 9Industry size.....................................................................................................................11
Figure 10Percentage change in industry size across years............................................................12
Figure 11Capacity use across Asia and Europe.............................................................................13
Figure 12Variable production cost for the firms...........................................................................14
Figure 13Contract manufacturing cost..........................................................................................15
Figure 14Transportation cost for the firms....................................................................................15
Figure 15Average cost of the product.......................................................................................................16
Table 1R&D expenses across firms for years..................................................................................3
Table 2Market share of firms for different years.............................................................................4
Table 3Global capacity use............................................................................................................12
Table 4Cost per unit for the firms across years.............................................................................16

INTRODUCTION
Red is taken as company for analysis in CEISM simulation. Mentioned company operate in
the telecommunication industry and manufacture mobile of all generations from 2G to 4G. In
comparison to rival’s firm is in better position because of its R&D projects and innovation that it
made in its operations. However, on front of cost firm lagged behind its rivals. Dependency on
contractors for production of additional units is one main reason behind high cost of product.
This is the front where Red need to work to improve its performance. Thus, on analysis of
performance it can be said that firm need to make hard efforts to control cost of production.
Management is good and able to retain suppliers which lead to less fluctuation in cost of
products obtained from contractors. However, within premises cost of production is high which
make firm less competitive to rivals. Investment in R&D is made almost equally, if economic
condition become stable and demand of smartphones plunged then in that case firm may failed to
make available technology updated mobiles to people relative to rivals. Such kind of scenario
will make firm less competitive in the market. Thus, it can be said that firm position in front of
rivals to moderately is competitive.
MARKET ANALYSIS
Competitors
In CEISM simulation there are some competitors namely Blue, Leaders, grey, Ochre, Pink,
Navy and Yellow. All these firms operate in the mobile industry and have core competency in
multiple fronts like innovation and cost control etc.
Geography and technology
In CEISM simulation there is one nation USA and two continents namely Asia and
Europe. Markets are very different from each other. In Europe and Asia people prefer to use
products that are different in front of price (Giachetti and Marchi, 2010). Specially, people prefer
cheaper products. Hence, firms need to serve both continent and USA people in different
manner. This creates main challenge for the firms and make competition more tough for them.
1

Figure 1Global demand of product
Buyers preferences and market segmentation
Consumer behaviour across country’s is different and due to this reason, it become very
important for the firms to segment market in many ways so that product can be served to people
at right place. All firms invested in tech but in different manner. Some of companies make right
decision while some make wrong decisions. Fast mover advantage is the one of the factor that
leads to achievement of huge success in the business (Liu and Li, 2010). Firms are segmenting
market on basis of tech 1, tech 2, tech 3 and tech 4. Some companies do technology advancement
late and due to this reason, they face loss in the business. Thus, it is very important to ensure that
according to requirement product is offered to the customers on time and in proper manner so
that their satisfaction level can be maintained. Thus, it can be said that there is huge significance
of the market segmentation approaches for the firms in the market.
Sub strategic groups in mobile phone industry
It refers to the way in which positioning of product is done in the market. Positioning
refers to the creating specific image of the firm among customers and motivating them by using
that image to buy a product. Red company is focus on research and development so as to position
its product as innovative product in the market.
2

Figure 2R&D expenses across firms for years
Not only Red, its rivals are also spending lots of amount on R&D. from table given above
it can be observed that most of firms are making heavy investment on R&D only in specific year.
However, Red is making balanced investment on R&D each year which make it competitive
towards its competitors.
Market shares
3