This article discusses the concept of first mover advantage in the smartphone industry and analyzes its impact on market growth and competition. It also explores the different stages of the smartphone industry life cycle, including introduction, growth, maturity, and decline.
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Table of Contents Question A.......................................................................................................................................1 1. Was there a first mover advantage in smart phone industry...................................................1 2. Justifying where in its life cycle the smart phone industry to be...........................................3 Question B.......................................................................................................................................5 1. Appraise whether Coca Cola gain a competitive advantage...................................................5 2. Describing how Coca Cola balance global integration and national differentiation...............7 Question C.......................................................................................................................................8 1. What strategic action for a company should make next.........................................................8 REFERENCES..............................................................................................................................10
Question A 1. Was there a first mover advantage in smart phone industry First mover advantage is the marketing strategy which is gained by the company while occupying a market segment. Or else, first mover is a company that gain a competitive advantage by being a first to bring a new product and service to a market. So, by using First mover advantage Framework, it is easy to determine that a smart phone industry is first mover or not: Clam water:It is the first quadrant in which it is easily determine that things which run under this are used for both long and short run. As the market growth is slow but start up can scale successfully (Flor and Moritzen, 2020). In the smart phone industry, it is analyzed that though there is a strong brand awareness but the resources are less crucial and that is why, when the small traditional phones are fall under this category. Technology leads:In this, rapid development of technology but due to slow market growth, first mover advantage is actually worse than a useless because they beaten by fast follower strategy. Like, Apple, who provide best iPhone for their customer but actually with the slow market growth, company is loss the First mover smartphones. So to stay within a market, company has to make sure that it provide new Android phones on the horizon with an increase in pace of innovation. 1
Market leads:As the market is growing, there is an advantage of being in at start to capture this growth, also, it is easy to keep the product as advanced technically as rivals. For that the company have to so unique things which help to attract customers. For example, in the smart phoneindustry, Xiaomi will sharpen its focus on its own Mi stores to sell its wares and this strategy is consider the best for home market and also, offering high quality of product in low price is lead the company at top in smart phone industry (Smirnov and Wait, 2020). So, this reflect that knows how to manage the work in such a good manner which help to attract new market share and able to exploit these opportunities. Rough seas:It isrepresent as a biggest challengefor start-upsbecause a good investment is required in research and development department with large scale of distribution. Under this, smart phones lies because each new generation brings a new competitor such that BenQ,then comes HTC, after that Xiaomi and now Vivo or Oppo. This chain clearly reflect that companies only exist when they provide new product in order to gain huge competitive market within a firm by complying with new and advance technologies. This is also justifies that smartphones are is a first mover advantage, because it grew fast and the industry also do strong marketingand distribution in order to sustain a strong competitiveadvantagein a market(First move advantagesframework,2019). Also, the technologies within a industry is also change and companies are also make sure that they complying with the new techniques because other technologies are rapidly obsolete. So it can be stated that smart phone industry are providing new gadget and keep adding new features in order to meet the demand of customers by sustaining a brand image at further level of success. 2
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2. Justifying where in its life cycle the smart phone industry to be Among all stages, smart phone industry is lies under the growth stage because the industry provide the range of new product and there is around 74% of an increase from the other stage. As the above graph also shows that from 2015 to 2019, only android phones are used by the people as compared to iOS and windows phone. The increment shows that the industry is fall under the growth stage because the usage of android phones is increases up to 80% while the sale of other phones are decreases. Life cycle stage of smart phone industry 3
Introduction:Before introduction of any product, there are various promotion and marketing going to be in advance in a market. Even there is no surety that company get to know whether the product will make or break in market during its introduction phase, but both promotion and marketing of smart phone is very high. The only thing which is explained in this stage is about promotion and marketing styles, so it is analyzed that other things are missing like, how the product in promoted in market (Ercan and et.al., 2016). Also, the stage explain only heavy cost incurred during this stage and that is why, it is also known as a heavy spending phase. On the other side, stage also determine how the competition is reduced by meet the demand of customers which is well explained. Growth:This stage shows that customer are ready to take a product and demand of product is increases. Such that by developing high marketing and advertising strategy, industry is able to meet the demand of a customers and in the same way, smart phone industry is also make sure that before introducing the product in market, companies have to invest a huge amount in its promotional strategy so that it may lead to generate the revenue as well (Alonso- Stenberg and et.al., 2019). Under this stage, it is well explained that mobile phone went from 4
being a minority user groups to an essential of a life and this in turn shows that the growth of a normal mobile phone to android is increases. Not only this, in the years from 1998 to 2000, there is a suddenly explosion as a rate of using android phones up to 75% to 80%. So the data clearly reflected that smart phone industry is relied upon this stage only, while on the other side, the stage do not specify the things which needs to be consider while introducing new product in market. So it can be stated that it is missing. Maturity:If industry reaches this stage, it means sales become decreases, also due to high prices of the product, sales is decreases. During this time, company gave to think that reduce the prices. For example, if there are two companies and both selling smartphones. In which one launches 6 months earlier and one of them launches yesterday at same price. So people prefer to buy the product which is launched yesterday because consumer generally prefer latest and fancy ones and the product also contain best features (Perera, Shigeno and Sumita, 2018). So, in this stage, it is analyzed that there is a need to provide innovative product to increase demand and smart industry is completely relied upon the advance technologies and this stage well explain the situation where the sales may fall. Decline:In this stage, companies are tend to attain their product alive but once the product is introduce in market, it is essential that it will be decline. It is so because of the change in customer behavior and they also shift towards new product which force companies again introduce new product (Brondoni, 2020). As a result, when the product is in decline stage, it means company loss all of its share within a market due to deterioration of sales and increase in competition. Even the price of the product is also reduced. For example, Nokia, the firm who have a strong base when it newly introduce in market but after facing strong competition and evolution of smart phones with advance features, company's sales is decreases. Therefore, it is analyzed that the the life cycle model clearly explain smart phone industry focus on every stage and try to provide every best product to their customer which in turn leads a business towards further level of success. Question B 1. Appraise whether Coca Cola gain a competitive advantage Being a brand image at international market, it is analyzed that Coca Cola is also sustain the competitive advantage. As the brand sells its product in more than 200 countries and that is 5
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why, there are many sources which is shows that quoted firm gain a competitive advantage from being an American Company, such that: Strong relationship with other countries:America has a strong relationship with other countries because the trade agreement with America is strongest and being a super power in a world, country keep maintaining good relationship between other countries which in turn help Coca Cola to sustain the brand image at international level (Schischke and et.al., 2016). For example, Coca Cola currently operate within 200 countries and company's biggest dealer is McDonald's' which is also spread in all over the world. Large supply and distribution network:The company also take an advantage from being an American company because the supply and distribution network is large in a world. Being a developed country, there are wide range of transportation facilities available for the company through which it supply the product at world wide. Also, there are many vending partners who also work closely with its customersand country also know how to maintain a strong relationship with the suppliers. Investment in advance technologies:America is a strong and super power in the world, that is why, it provide range of techniques through which Coca Cola may use in order to attract the customers and this in turn leads to stay strong within a firm (Waller, 2020). These technologies are used in marketing purpose and quoted firm is also well known for its great marketing capabilities. Not only this, company also invest in digital technology for connecting better with its customers and now it uses great video advertisement. So, it is consider a benefit for the company in order to gain high competitive advantages like, Coca Cola also uses technology to help their employees and also hire new and talented employees for a firm. Product portfolio:Being a strong financial performer, company offer the range of product to their customer which is not possible in its others competitor. Even many of them are highly market leading brand who are so popular in market. Among all, company's soft drinks, water, juice and plant based beverage are consider the best product which attract range of customers towards it (Krishnaswamy, 2017). This in turn leads to enhance the customer base and even the product are good in flavor and taste which means that there is a strong customer loyalty which is another source of the competitive advantages. Therefore, it is clearly reflected that being an American company, Coca Cola gain high competitive advantages and this in turn leads to sustain a brand image at global as well. 6
2. Describing how Coca Cola balance global integration and national differentiation Global integration is the degree to which a company is able to use same product and methods in other countries while differentiation is all about how the company is present the different variety of product from its rival firms. As Coca Cola is one of the well known firm that which also uses many strategies in order to balance out between global integration and national differentiation. Such that under global integration, Coca Cola uses Bartlett & Ghoshal Model which indicates the strategic option for a business in order manage the international operation (Laszlo and Zhexembayeva, 2017). Such that under this method, company uses global strategy in which company is focused upon the highly centralized products and also focus on the efficiency by offering best product which help to increase the financial performance of the company . In addition to this, it is also analyzed that because of high standardized products, company is able to attract range of products at global level and on the other side to manage the globalintegration,itmayalsousestransnationalstrategywhichisacombinationofa standardized strategy and multi domestic strategy (Reed and et.al., 2020). Through this method, company is able to maintain the need of a customer in order to provide the same product in a market. So it is analyzed that to gain high competitive market within a market, company is ready to share the expertise and for that they comply with the advance technology and staff members so that they will ready to analyze the demand and also sustain the brand image at international market. On the other side, for national differentiation, Coca Cola also uses Porter generic strategy in which the firm is also make sure that it provide unique quality product which in turn leads to attract range of new customers towards it. It uses differentiation strategy under which firm attempts to be diverse from their competitor by adding unique things into the product in order to make the product valuable or unique (Doval, 2016). Such that in the context of Coca Cola, national differentiation is attained through superior quality product which actually surpasses to the nearest rivals and high brand image as well as recognition. Moreover, the company have its well known bottle which differentiated itself from other firms. Not only this, the marketing style of the company is also make its different from others, in every year, company spend lots in its marketing and promotional strategy which helps to make the brand globally. 7
As there are many factors which leads a company differentiate from other firm such that marketing activity. Such that the firm uses traditional form of marketing activity such that TV, campaign and also company invest lot of amount in the marketing sector which in turn leads to draw attention of many customers towards it. While on contrary, there are many rival firm which do not spend amount in the marketing activities and that is why, they do not attract range of people towards it. But, in the case of Coca Cola, now it also uses digital technology which in turn leads to attract massive groups as well (Tien and Hung Anh, 2018). So, it is reflected that with the use of effective marketing styles, company is balance global integration and national differentiation. In addition to this, it is also analyzed that company's national differentiation strategy is its marketing style and activities which in turn make the company global. Such that it also uses different product line i.e. carbonated soft drinks market which in turn help to increase the market share (Fuertes and et.al., 2020). So it can be stated that with the help of unique marketing activities such that social media, Coca Cola campaign, it is able to attract range of new customers towards it. Also, under this with proper balance between global strategy and national integration, company is able to become a global brand among all the companies. Question C 1. What strategic action for a company should make next The chosen firm for this section is Apple which is top brand that is operating under smartphone industry and as per the current scenario, for strategic action, there are various recommendation that help the company to sustain the brand image. For that, Ansoff growth vector matrix which help to clarify the company in which direction the company should move so that it will gain a best market share (Waller, 2020). Under the model, there are four quadrant which also assist the firm to analyze what should be the next step which help to sustain the brand image. These are as mention below: Market penetration:It is all about to sell existing product within an existing market and through this method the company is able to offer the best product and also maintain the customer base at local level. In the context of Apple, the firm is operating at global level and it mainly operate in more than 24 countries. So it is stated that Apple is engage in market penetration strategy through effective application of a marketing strategy and with the help of high level of efficiency, company is sustaining its brand image within local market. 8
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Product development:It means that developing new product and then sell the same to the existing markets and through a new product development company is only updating the features and then sell it into a market (Alfonzo, Cerquitelli and Scinicariello, 2019). That is why, Apply makes regular investment in its research and development department in order to make sure that it easily developed new product in order to meet the define aim. Market development:It is all about to finding new market for existing product and this is help in IT industry. In the context of Apple, company is always find new market so that it will sustain the brand image at global level and as a result, it will become a top leader in the smartphone industry. Such that currently the company is focus on the Asian market so that it will help to enhance the market share and this in turn leads to affect the revenue in positive manner as well. Diversification:it means that developing new product and then sell the same into new market. Though it is consider one of the riskiest strategy among all because it is not easy to survive in totally new market with totally new product. That is why, company may choose many strategy in order to enter into new market such that vertical and horizontal integration. Among all, it is suggested to Apple to use diversification starter under Ansoff growth vector matrix because the company has a strong financial performance and that is why, they can easily invest into new product such that currently the company provide different new product i.e. Apple watch, Apply pay for mobile payment and digital wallet, Apple credit cards (Chang, Eggers and Keum, 2017). So, In order to move forward, it is suggested to the firm to offer Smart TV where consumer assess all the variety of application such that Netflix, Amazon prime etc. This is completely new concept and company may start it from India because till now no company offer such thing with advance technology. Though Xiaomi and Samsung offer the LED but it did not contain advance features and that is why, providing this product into totally new country will help the business to sustain the brand image and also enhance the market share as well. 9
REFERENCES Books and Journals Alfonzo, A., Cerquitelli, T. and Scinicariello, D. V., 2019.Data Analytics exploitation for Growth Synergies in Multi-Business Companies(Doctoral dissertation, Politecnico di Torino). Alonso-Stenberg,K.,andet.al.,2019.InterpretingtheSmartphoneLifeCycleThrough Smarta.IEEE Access.7.pp.110730-110739. Brondoni, S. M., 2020. Shareowners, Stakeholders & the Global Oversize Economy. The Coca- Cola Company Case.Symphonya. Emerging Issues in Management, (1), pp.16-27. Chang, S., Eggers, J. P. and Keum, D., 2017. Market Relatedness, Technological Relatedness, and the Dynamics of Organizational Growth.Columbia Business School Research Paper, (14-60). Doval, E., 2016. Is outsourcing a strategic tool to enhance the competitive advantage?.Review of General Management, (23 (1)), pp.78-87. Ercan, M. and et.al.,2016, August. Lifecycle assessment of a smartphone.InICT for Sustainability 2016. Atlantis Press. Flor, C. R. and Moritzen, M. R., 2020. Entering a new market: Market profitability and first- mover advantages.Journal of Corporate Finance, p.101604. Fuertes, G. and et.al., 2020. Conceptual Framework for the Strategic Management: A Literature Review—Descriptive.Journal of Engineering,2020. Krishnaswamy, S., 2017. Sources of Sustainable competitive Advantage: A Study & Industry Outlook.St. Theresa Journal of Humanities and Social Sciences.3(1). Laszlo, C. and Zhexembayeva, N., 2017.Embedded sustainability: The next big competitive advantage. Routledge. Perera, U., Shigeno, M. and Sumita, U., 2018. Development of Segmentation Algorithm for Identifying Lifecycle of Smartphone Applications.International Journal of Business and Information, pp.267-267. Reed, J., and et.al., 2020. Integrated landscape approaches in the tropics: A brief stock- take.Land Use Policy.99.p.104822. Schischke, K. and et.al., 2016, September. Modular products: Smartphone design from a circular economy perspective. In2016 Electronics Goes Green 2016+(EGG)(pp. 1-8). IEEE. Smirnov, V. and Wait, A., 2020.Preemption with a Second-Mover Advantage(No. 2020-06). Tien, N. H. and Hung Anh, D. B., 2018. Gaining competitive advantage from CSR policy change:caseofforeigncorporationsinVietnam.PolishJournalofManagement Studies.18. Waller,T.,2020.PositioningforaCompetitiveAdvantage.InPersonalBrand Management(pp. 51-65). Springer, Cham. Online Firstmoveadvantagesframework.2019.[Online].Availablethrough: <http://strategictoolkits.com/strategic-concepts/first-mover-advantage/>. 10