Eco Fone Case Study: Market Analysis and Business Expansion Strategy

This case study examines Eco Fone, a company selling smartphones and accessories, focusing on the UK market. The analysis begins with an overview of the mobile phone market, highlighting the increasing popularity of smartphones, particularly among older adults. The report includes a mixed-type bar chart comparing smartphone usage for various activities between 2016 and 2017. It then critiques the use of linear forecasting for predicting future sales and suggests time series analysis as a more appropriate method. The study explores the increasing smartphone adoption by older age groups, emphasizing features like larger screens and louder speakers. A pros and cons analysis evaluates the potential for business expansion into Kingston. The case study also presents cost analysis for a new building and compares net takings in two shops using Z-score assessments. Finally, it addresses customer satisfaction and concludes that Eco Fone has significant opportunities for growth within the UK smartphone market, particularly among older demographics, and should consider expanding its business.

ECO PHONE CASE STUDY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
a) Overview of the mobile phone market in the UK....................................................................1
b) Mixed type bar chart for 2016 and 2017.................................................................................1
TASK 2............................................................................................................................................3
Linear Forecast will not work .....................................................................................................3
Why linear forecasting is not best................................................................................................4
Estimation for the years 2018-2019 about the use of smartphones by adults..............................5
TASK 3............................................................................................................................................5
Increase in Smartphone sales for the older age group people......................................................5
TASK 4............................................................................................................................................6
Expand business in Kingston.......................................................................................................6
TASK 5............................................................................................................................................7
Costs of a New Building..............................................................................................................7
TASK 6............................................................................................................................................7
Testing the Possible Difference in Net Takings in the Two Shops.............................................7
TASK 7............................................................................................................................................8
Customer Satisfactions.................................................................................................................8
TASK 8..........................................................................................................................................10
Quality Procedures.....................................................................................................................10
TASK 10........................................................................................................................................10
CONCLUSION..............................................................................................................................10
TASK 9..........................................................................................................................................11
REFERENCES..............................................................................................................................11

INTRODUCTION
Smartphone industry is growing day by day. There is rapid increase of smart phone's
sales among the old people. Eco Fone smartphones is the company that sales the accessories and
smartphones from its two shops which is in Richmond and Putney. The company doesn't sale the
laptops and tablets. Its business get started in the year 2014. The sale of Eco Fone is high among
the older customers.
The project report will provide detail information about the mobile phone market in the
United Kingdom. It will cover linear forecast of the company's sales in the year 2019. It will
identify the smartphones features that makes it popular among the customers. The study will
identify whether the firm should expand its business in Kingston or not. Lastly, it will provide
conclusion.
TASK 1
a) Overview of the mobile phone market in the UK
There is tremendous increase in smartphone sales in the UK during the year 2016-2017.
The people are preferring smartphones more than the Laptops and tablets. According to the
research during the year 2016 and 2017 in UK the people have asked about what they will prefer
to buy in next 12 months. About 30 % of the people in the UK have voted to smartphone. The
laptop users are 15% and larger tablet people is 10%. This research is being made for the people
who aged group between the 18 to 75 years. The results were shocking when its get to know that
3,395 people in UK are thinking to purchase smartphone in next 12 month and some of them
already have. 85% of the respondents have access to smartphone which is 41 million people in
total of UK population (Vuori and Huy, 2016). From which the half of the people have admitted
that they use smartphone while crossing the road. The age group of the 16-19 years are even
replying the messages they get at middle of the night. About 16 to 75 years of age group have
agreed that they used smartphones while walking on the road that is equivalent to approximately
22 million.
b) Mixed type bar chart for 2016 and 2017
On the basis of deloitte report in figure 6 indicates that for which business activities
purpose the people use smartphone more in UK. 50 % of the agreed that they don't use
smartphone s for the business purpose. The none of the above mentioned activities in the figure 6
is selected by the respondents in the year 2017 same as in the year 2016 as well people has
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highly agreed that they don't use smartphones for the business purpose. About 41% of the
respondents in the year 2017 has agreed that they use smartphones for the Email purpose. Data
of year 2017 indicates that 37% of the people have agreed that they use smartphones for the E-
mail purpose. The second main activity is making standard calls that is agreed by the 33%
respondents in the year 2016. In the year 2017, 32 % respondents agreed that they use
smartphones for making standard calls. Viewing documents is agreed by 17% respondents in the
year 2016 whereas in the year 2017, 0% have agreed that they use smartphones for viewing
documents (Shaheen, Chan and Cohen, 2015). 3 Activity is managing workload which is agreed
by 8% of respondents in the year 2016. In the year 2017 it is agreed by 6% of the respondents. 4
Activity is making voice calls through use of internet which is agreed by the 6% of the
respondents in the year 2016 whereas in the year 2017 it is agreed by the 4%. Thus, 4 main
activities which is done by the people on their smartphones are the Email, Making Standard
calls, Viewing documentation. Managing workload which is setting time table in the phone and
Making the voice calls.
Table and Bar graph
Activities (Main) 2016 year 2017 year
Emails 41.00% 37.00%
Making Standards Call 33.00% 32.00%
Viewing documentation 17.00% 0.00%
Managing workload 6.00% 4.00%
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TASK 2
Linear Forecast will not work
Table of smartphone penetration
Years Penetration of smartphones (in percentage)
2012 52.00%
2013 62.00%
2014 70.00%
2015 76.00%
2016 81.00%
2017 85.00%
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Interpretation
From the above figure it can be seen that there is smartphone penetration among the
adults of UK in the year 2012 to 2017. It has been noted that use of smartphones is highly done
by the older people. In the year 2012 it is 52% whereas in the year 2014 it goes to 70%. Till the
year 2016 it is increased up-to 81% and during the year 2017 it reaches to 85%.
Why linear forecasting is not best
Linear Forecasting is helpful when there is time component. It is useful when variables
are independent. For time series it easy to develop a liner regression model but here the
predictions is being made for the 2018-2019 sales. Hence, the time factor is missing in it. Time
series analysis will be perfect to study smartphone penetration (Tsai and Chang, 2018). It is
based on past analysis by considering the last year data the foregone predictions can be made for
the year 2018-2019.
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Estimation for the years 2018-2019 about the use of smartphones by adults.
Assumption says that it goes to 90% till the year 2018-2019. This analysis helps to
explain the current trends of the data, growth rates and study cyclical patters up-to 3 years and
even more.
TASK 3
Increase in Smartphone sales for the older age group people
As per the BBC news in the UK people of old age are using smartphone highly.
According to the research of the Deloitte there are 71% of the people who age group from 55 to
5
201 2 201 3 201 4 201 5 201 6 201 7
0%
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 % f(x ) = 0.06 51 4285 71x + 0.48 2

75 years old who are highly using smartphones. This age group people have seemed to be higher
adoption of the smartphones than the last 5 years data. It is also identified that demographic are
tends to use smartphones less than the younger people (Lee, Cho and Choi, 2019).
Approximately 20% of the older people have agreed that they checked smartphones more than
the younger people within 15 minutes after walking a few steps ahead on the road. Facebook has
installed by the 50% which is compared to the adults of the 70%.
As there is increase in the parking meter in UK. Thus, the people are paying more
through there mobile phones. The people are also booking the taxi by using the app of their
smartphones. Some changes are being made in the smartphone from the recent years which is
providing benefits to the older age group of people (UK public are ‘glued to smartphones’,
2017). As smartphones are having bigger screens now which is providing benefits to the older
people whose eyesight vision is poor. The smartphones are now also having louder speaker
which helps the older generation whir has hearing problems. Facial recognition is also another
trend among the older people. They are using this app more as they are concious about their
looks.
TASK 4
Expand business in Kingston
Eco-Fone has operations currently in the Richmond and borough. The firm has not
operated yet in the Kingston. Thus, the pros and cons method has being adopted to analysis
whether the firm should do expansion or not.
Should we expand
business to Kingston?
Yes
Pros Score/10 Cons Score/10
High brand awareness 8 Labour cost 7
Customer base is increased 7 Operating cost 8
Market share increased 8 Training cost 7
Revenue increased 9 Marketing 8
Total Pros 32 Total Cons 30
Average Pros 8 Average Cons 7.5
From the above analysis it can be determined that average pros are 8 and cons are 7.5.
Thus, the company should expand its business in Kingston. It will be helpful for increasing the
brand value among the customers. The customer base will also increase. Market share will also
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increase which help the company to take competitive lead (Yeh, Wang and Yieh, 2016).
Foremost thing is that Eco-Fone will be able to generate higher revenues.
TASK 5
Costs of a New Building
Asking price 400000
Negotiable price 350000
15 years
Repayment mortgage 350000
Debt payment [((1+0.07)^15)-1]/[0.07*(1+0.07)^15]
Total amount of loan / Discounting factor 1.76/0.19
9.11
350000/9.11
Total amount of loan 38419.32
Repayment amount on monthly basis 38419.32/12
3201.61
For structuring new building the Eco-Phone has taken loan (Jing-Ming, 2017). Total
amount of loan which is taken by the company is 38419.32. The repayment amount will be
38419.32 per year which is to pay by the firm in monthly installements. Monthly repayment
amount is 3201.61.
TASK 6
Testing the Possible Difference in Net Takings in the Two Shops
Given
Particulars Figure
Sample 40
Average 100s
Standard deviation 20
Second shop
Mean 90
Standard deviation 40
H0: Null hypothesis: There is no significant difference in net taking of two shops.
H1: Alternative hypothesis: There is significant difference in net taking of two shops.
Assessment of Z score value
Table 1
Mean value of one shop 100
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Mean value of second shop 90
Standard deviation (one shop) 20
Z score assessment (100 – 90) / 20
0.5
Table 2
Mean value of one shop 100
Mean value of second shop 90
Standard deviation (two shop) 40
Z score assessment (100 – 90) / 40
0.25
Table 1, Z score assessment is 0.5 and Table 2 , Z assessment score is 0.25.
Possible difference = 0.25
TASK 7
Customer Satisfactions
Ques 1 Ques 2 Ques 3a Ques
3b
Ques
3c
Ques
3d
Ques
4 Ques 5 Ques
6
Mean 2.95 2.89 1.98 2.50 3.25 2.51 2.51 2.52 3.71
Standar
d Error 0.15 0.09 0.08 0.09 0.12 0.10 0.12 0.09 0.11
Median 3 3 2 2 4 3 2 2 4
Mode 4 3 2 2 4 3 2 2 4
Standar
d
Deviati
on
1.48 0.95 0.84 0.87 1.25 1.07 1.19 0.92 1.15
Sample
Varianc
e
2.18 0.90 0.71 0.76 1.56 1.13 1.41 0.84 1.33
Kurtosi
s -1.46 -0.72 0.24 -0.65 -0.82 -1.21 -0.17 -0.13 0.24
Skewne
ss -0.03 -0.27 0.75 0.26 -0.89 -0.16 0.84 0.47 -1.10
Range 4 4 3 3 4 3 4 4 4
Minimu
m 1 1 1 1 1 1 1 1 1
Maxim
um 5 5 4 4 5 4 5 5 5
8

Customer Satisfaction means the level of likeness among the customers of Eco-Phone
smartphones (Tsai and Chang, 2018). The customer satisfaction level in the company is being
analysis by a survey which is conducted earlier. Thus, it is determined that customer satisfaction
level is high in the company. Survey is being done for asking this questions to the customers
about there satisfaction level. The questions which are asked are shown below -
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TASK 8
Quality Procedures
Quality procedures means to setting the quality standards for the company. It is helpful
for increasing the customer satisfaction level in Eco-Phone Ltd. The firm regularly checks the
smartphones quality standards (Lee and Hsu, 2015).Various steps of quality procedures are as
follows -
 Checking of Structure and components of smartphones.
 Testing of software's of smartphones.
 Checking of performance level of smartphones.
Poisson's distribution is a probability of the number of the events that can be occurred
during a given time frame. It is an average that indicates the number of the time a particular
event can occur.
Poisson random variable 2
Mean rate of success 15
Poisson probability P(X=2) 0.000
Cumulative probability P(X<2) 0.000
Cumulative probability P(X>2) 1
Cumulative probability P(X>=2) 1
TASK 10
CONCLUSION
From the above project report it has been concluded that Smartphones are becoming
popular among the Adults. It has been determined by the pros and cons analysis that the Eco-
Fone company has a scope to expand its business in the Kingston. Smartphone is popular due to
various features is being added in the smartphones for the older age people. Its various features
including the bigger screen, louder speaker and facial identifying app. Thus, it is gaining
popularity among the old people. In UK sales of smartphones among the older aged group people
have tremendously increasing day by day. It has been summarized that in UK adults are also
highly using smartphone because of smart payment system as there is parking meters puts across
the roads. Another reason is for booking taxies.
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TASK 9
REFERENCES
Books and Journals
Jing-Ming, S.H.I.U., 2017. The Scope of Support of Toolkits in the Smartphone Industry. Annals
of Business Administrative Science.16(2).
Lee, C.S., Ho, J.C. and Hsu, C.F., 2015, August. Creating value in global innovation networks: A
study of smartphone industry. In 2015 Portland International Conference on
Management of Engineering and Technology (PICMET).(pp. 755-760). IEEE.
Lee, Y., Cho, S. and Choi, J., 2019. Smartphone help contents re-organization considering user
specification via conditional GAN. International Journal of Human-Computer
Studies.129.pp.108-115.
Shaheen, S., Chan, N., Bansal, A. and Cohen, A., 2015. Shared mobility: A sustainability &
technologies workshop: definitions, industry developments, and early understanding.
Tsai, W.L. and Chang, P.T., 2018. Combining data envelopment analysis and competitive
dynamic theory for exploring global smartphone manu-facturers'
performance.JABS.4(2).pp.109-125.
Tsai, W.L. and Chang, P.T., 2018. Combining data envelopment analysis and competitive
dynamic theory for exploring global smartphone manu-facturers'
performance.JABS.4(2).pp.109-125.
Vuori, T.O. and Huy, Q.N., 2016. Distributed attention and shared emotions in the innovation
process: How Nokia lost the smartphone battle. Administrative Science Quarterly.61(1),
pp.9-51.
Yeh, C.H., Wang, Y.S. and Yieh, K., 2016. Predicting smartphone brand loyalty: Consumer
value and consumer-brand identification perspectives. International Journal of
Information Management.36(3).pp.245-257.
Online
UK public are ‘glued to smartphones’. 2017. [Online]. Available through :
https://www2.deloitte.com/uk/en/pages/press-releases/articles/uk-public-glued-to-
smartphones.html<>.
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