Strategic Analysis of Venus Mobile: PESTLE, Porter's Five Forces, Product Life Cycle

STRATEGY MODULE
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Table of Contents
Part 1..........................................................................................................................................3
o Introduction.........................................................................................................................3
o External analysis of Venus..................................................................................................3
PESTLE Analysis...............................................................................................................4
Porter’s Five Forces............................................................................................................8
Product life cycle..............................................................................................................10
o Internal analysis of Venus.................................................................................................10
Value Creation model.......................................................................................................10
o SWOT analysis for Venus.............................................................................................12
o Strategic options evaluation...........................................................................................14
o Strategic recommendations...............................................................................................15
Practical methods:.............................................................................................................15
Application of sustainable products:.................................................................................16
Concerns about increasing competitive benefits:.............................................................16
• Part 2......................................................................................................................................17
o Stakeholder summary........................................................................................................17
Conclusion................................................................................................................................18
Reference list............................................................................................................................19
Appendices...............................................................................................................................22
Appendix 1: Business life cycle of Mobile phone industry in UK.......................................22
Appendix 2: Net demand for the product by locations.........................................................22
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Part 1
o Introduction
It is evident from the Case study, which Venus Mobile has performed in a very poor way
over the period of last years. Therefore, based on these factors of strategic analysis, the report
discusses the requirement of strategic innovation For Venus Mobiles. Venus mobile is facing
stiff competition from the other 4 companies within the international mobile phone market.
Previous year the company generated lowest sales and low profit amongst the other 5
companies. The major data on comparisons indicates that Venus mobiles have the lowest
investment spent on R &D and lowest on market share. In this context, the report illustrates
the external and internal analysis of the company through PESTLE, Porter's five forces,
industry life cycle along with the approaches of R&D and use of outsourcing approaches.
Moreover, the report presents a SWOT analysis to determine the opportunities and strengths
of the company.
However, the problem statement of the report is to evaluate the present condition of mobile
industry specifically Venus Mobiles in accordance to the future. The report, therefore,
provides some recommendations of strategic decision making by evaluating the internal and
external factors that are needed to be considered while developing an effective strategic
decision for increasing the productivity of Venus across the US.
o External analysis of Venus
Amongst all of these companies Venus Mobile is the one whose production and financial
condition is at stake amongst all the other companies. Mercury’s delivery production is the
most profitable amongst all the other companies as measured from the cumulative
shareholder return. It has been seen that that operation depreciation profit of Mercury is
highest at 56.24% and Venus profit is running at -107.04% that is the lowest among all other
companies.
Considering the environment of the industry it can be seen that there is a long conflict
between the US and China over the trade of media. Currently, the situation has declined a lot
more than before. It has been observed from the case study, there is an increased rate of
interest within the environment and sustainability policies that affect the organisation.
Therefore, it is highly necessary for the organisations to increase to increase and enhances
their performance standards in case of internal functions and supply chain process.
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PESTLE Analysis
Figure: Aspects of PESTLE analysis
(Source: Maslach, 2016, p.714)
Political
From the political point of view it has been found that there is a rising conflict between US
and China that has been known as trade war. The situation has been dragged a further since
both the countries have raised their tariffs of $25 on the routes if USA to Asia and Asia
towards USA. These conflict of tariffs has increased the combines cots of shipping of
products that has made the total cost of movement of mobile products to a direction if $41. In
this context, the cost of exportation of product from USA to Europe including logistics is
$12.6 in comparison to $8.3 from Asia to Europe (Benneworth et al., 2017, p.235). However,
considering the present currency market, USD currency has a possibility to have again on
both Euro and other currencies (Goetsch and Davis, 2014, p.23). Apart from this, rate of
interest may fall down in all the markets with an indication slowdown of corporate tax that is
lowest Asia with 22% in comparison to Europe 31% and 38% in USA. Considering these
political issues in Europe and USA, Venus needs to enhance its production performance for
improving their supply chains (Maslach, 2016, p.714). The corporate tax has been sustaining
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Political
Social
LegalTechnology
Economical

at 22% in Asia, 31% in the UK and 38% in the USA. As a result of which there is a stark fall
down of the rate of interest in this market (Hornstein, 2015, p.292).
Economical
From the case study it has been seen that the Venus is running at a declining profit with a
production loss of $05bn whereas the summary of the income shows that in the previous year
Saturn has earned the most profit with a total income of $2bn. Again the cumulative
shareholder return shows that Mercury has outpaced the other entire organisation with a
cumulative shareholder total of 247% and Venus with – 18.1 % that is the lowest amongst all
(Dodgson, 2018, p.34).Again the sales revenue for the last 6 years of the companies shows
that Mercury has the highest revenue of sales with $3265, 450bn and Venus the lowest with
$113,353bn with a lowest profit with -516,865.
From the CESIM case study it has been found that economical tensions in between USA and
the government of China may influence the rate of tariffs on the exportation of Asian goods
almost at a double rate of cost with $7 for each of the mobile products than the last year.
Again, Venus covers 15 plants that are present in USA and 3 in Asia, despite this in R6 the
company managed to produce no economical revenues. Apart from this the company has two
other plants that are under construction in USA, 2 in Asia. Therefore, in R8 the company will
have 17 US plants along with 5 Asian plants, these insufficient of plans is not sustainable and
needs urgent action. Therefore, the company needs an efficient method to utilise these
resources in a proper way. Apart from there are no noticeable changes within the cost of
manufacturing. These may increase the requirement for manufacturing domestically in Asia
for limiting he influence if tariffs and cost of logistics along with the fall down if labour cost
(Prajogo, 2016, p.254). In this context, Europe has been expected to grow at a percentage of
15% and USA 20%.
Social
Social factors common in the course of establishing new generation at the same time have to
be careful about choosing the taste of products that face improvements. In case of social
trends it has been observed from the case study that Tech 1 is highly popular all the market,
Tech 2 is popular in USA, Tech 3 is popular in Asia and Tech 4 in Europe (Lewis, 2014,
p.60). In this context, mobile network for tech 3 and tech 4 continues to increase slowly
within the market that may over grow the Tech 2. Moreover, according to the case study Euro
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has been expected to fall down that put pressure on the consumers. Therefore, one response
from the suppliers may reduce the cost that may be possible for achieving a strategy of
differentiation for those that are not ready to produce in lower process (Pisano, 2017, p.750).
Technology
Technology has drastically increased in the case of mobile phones. In CESIM study
technology it can be said that although mobile handsets are not very different from each other
but there may variations within the product features. For instance, different is design cover
colour, ringtones, games and may depend on the impact of the different market location
(Simsek et al., 2015, p.476). Network coverage is a necessary factor in technology that helps
to determine the demand of technology. In this aspect, the attractiveness of technology may
vary with the location of market. People nowadays prefer new technology other than
traditional ones (Wirtz et al. 2016, p.37). Therefore, Venus has an opportunity to invest on
modern technology. However, it has been found that in house budgets of the technology are
determined by upper part of R&D. In this context, there is a declining marginal profit with
the increase in budget. These indicate that it will be cheaper for Venus to establish
technology along with increment of several rounds, and then get the production in one round
(Norman and Verganti, 2014, p.78).
Legal
In case of legal fluctuations it has been found, if Venus tries to invest on the global market,
they need to consider the Indian market that remains closed for this international
organisation. This is because the Indian government tries to expand at least one National
champion that can compete with the international market. It is necessary to take a note on the
fact that Africa and Latin America does not have significant opportunity for the period of 5
years owing to the delay in developing mobile network in few limited urban locations (Yi et
al., 2016, p.436).
Environmental
From the case study it has been found that there is growing interest in the Environmental,
sustainability as well as Governmental policies that may influence Venus therefore, it is
increasingly necessary for Venus to enhance their performance both internally as well as
externally and supply chain to cope up with the environmental policies (Demil et al, 2015,
p.11). It is not just the matter of profitability that the company needs to consider, the
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