Eco-Fone Business Expansion Report: 2019 Market Analysis

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REPORT FOR ECO-FONE
Date: April ??, 2019

Report for Eco-Fone 2019
Table of Contents
Introduction...................................................................................................................................2
1 Analysis of Issues for Eco-Fone Smartphones..........................................................................3
1.1 An Overview of the Mobile phone market in the UK.........................................................3
1.2 Forecasting the UK Adult Smartphone use.........................................................................4
1.3 Smartphones - A potential market for older customers......................................................5
1.4 Feasibility of Expanding business to Kingston using Pros and Cons table........................6
1.5 Costs of a New Building.....................................................................................................7
1.6 Testing the Possible Difference in Net Takings in the Two Shops.....................................8
1.7 Customer Satisfaction.........................................................................................................9
1.8 Quality Procedures............................................................................................................12
1.9 Conclusions & Important Findings...................................................................................13
References...................................................................................................................................15
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Report for Eco-Fone 2019
Introduction
Eco-fone is a company engaged in the retail sales of smartphones and accessories based in the
UK. It has two shops in two different parts of the UK named Putney and Richmond since the
year 2014. Eco-fone is planning to extend its business by expanding the range of products like
the sale of laptops and tablets. For the expansion of business, it has to make identification of
the suitable market base where it can make such expansion in the UK. Several market surveys
along with the use of various techniques will be specified in the assignment to help the
company take several decisions for expanding the business.
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Report for Eco-Fone 2019
1 Analysis of Issues for Eco-Fone Smartphones
1.1 An Overview of the Mobile phone market in the UK
Smartphone usage has become an important part of every individual’s lifestyle and the life of
the individual has been affected both in negative as well as positive aspects by the use of a
smartphone. In the UK industry and market, smartphones have been newly introduced and are
making a mark as people are accepting the new gadget and technology. Also, the market for a
smartphone can dominate the UK industry as the UK has a high literacy rate and people are
willing to adopt new technology as it is easier for them to adapt to such technology. After the
analysis of the survey conducted by Deloitte in 2017, it has been observed that due to the
introduction of new and innovative features the demand for smartphones is expected to
increase as the same will help the individual in managing the routine work with a lot of ease.
Also, it has been identified that the majority of people use smartphones for the daily routine
work which amounts to approx. 1.588 million people (Deloitte, 2017). It has been noted that
almost 91% of the total population of the UK are using smartphones which shows as an
additional opportunity for expansion of smartphone companies. Smartphone sellers should
focus on the middle-level segment people having a low budget for smartphones as it is an
increasing market for smartphone usage. Also, people of the UK are willing to accept
complicated technology which can make the routine as well as professional work easier for the
people as most of them are literate and that does not create any problem for them to adapt to
such technology. Eco-fone should focus on middle-class individuals and conduct the survey to
determine the possibility of expansion in such areas.
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Report for Eco-Fone 2019
1.2 Forecasting the UK Adult Smartphone use
2012 2013 2014 2015 2016 2017
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Laptop
Smartphone
Tablets
Linear regression analysis is conducted in the above figure from the data provided from the
Deloitte report showing usage of gadgets for different years. Linear regression can be defined
as the statistical method that shows the relation between two variables one of which is a
dependent variable and another being the independent variable (Santiago, et. al., 2018). After
conducting the linear regression of the gadgets for different years it has been noted that the
usage of laptops has been consistent in the previous year however there has been a continuous
increase in the usage of smartphones by the adults in the United Kingdom. It can be seen that
there is a positive increase as shown by the linear regression in smartphones as compared to
other gadgets thus making the market of smartphones better in the future. Linear regression has
shown the usage of gadgets individually but the same does not compare the gadgets with other
gadgets like the impact of one gadget on others. For such analysis, eco-fone can use the method
of regression analysis which can state the relation between the two gadgets.
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Report for Eco-Fone 2019
1.3 Smartphones - A potential market for older customers
Eco-fone is planning to expand and for expanding, the company is looking into ways by which
it can expand and the areas where it can expand its business including the customer base and
geographical area in the United Kingdom. Several research and surveys are being conducted by
Eco-fone which states the possible areas of expansion which will help in increasing sales and
profit of the company.
As per the article published by BBC, it was stated that several problems have arisen for mobile
companies to establish themselves in the UK market which is considered to be highly
competitive. It was also stated in the article that the potential market for smartphones which
has a high amount of scope is the individuals of old age (Andone, et. al., 2016). Smartphones
help in fulfilling the daily routine activities of old people thus satisfying the old people as
desired. This has led to a tremendous increase in the usage of smartphones by old people. After
the introduction of new features like a bigger screen, artificial intelligence, assistant it has
become easier for older people to adapt to smartphones thus developing the interest for using
smartphones by older people. Also as per the article published on BBC, it has been seen that
approx. 71% of the payment by way of electronic means is initiated through smartphones thus
adding to the advantage of using smartphones by older people (BBC, 2017).
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Report for Eco-Fone 2019
1.4 Feasibility of Expanding business to Kingston using Pros and Cons table
It should be noted that as the company is planning to expand its business further then it should
conduct an analysis of the pros and cons of such expansion. A balanced scorecard is a
technique that allots points to the data and then the comparison is made on the basis of the
same (Magloff, 2019). The above table shows the pros and cons relating to expanding of
business to Kingston by Eco-fone and the points allotted to them on the basis of the analysis of
the same. It can be seen that the average of points allotted to Pros comes to 8.13 and the
average of points allotted to cons comes to 6.71. Thus to conclude it can be said that as the
average of pros is more than the cons thus Eco-fone should proceed for expanding its business
to Kingston. The limitations are the part of expanding the business and should be considered as
the cost for expansion.
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Report for Eco-Fone 2019
1.5 Costs of a New Building
For the acquisition of building by eco-fone for expansion of business, the company should
acquire a loan for such a building. It is expected that the price of the building can be negotiated
to £ 350000. Thus a mortgage loan is taken for the amount of £ 350000 by the company.
Calculation of monthly cost of repayment of mortgage loan is as follows:
Amount of Loan Availed = £ 350000 (Given)
Term of the loan (Payment made once per month) = 15 years (Given)
Interest Rate = 7% Per Annum
Thus from the above-given information, the monthly payment installment comes to £ 3146
which has been summarised in the table given below:
There are many companies in the United Kingdom which provide mortgage loans to the
business for acquisition of the asset. They are engaged in the provision of commercial
mortgage lending business across the UK. Following are some of the logs of such companies
operating in the UK:
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TESCO Bank Godiva
Mortgage
NATWEST

Report for Eco-Fone 2019
1.6 Testing the Possible Difference in Net Takings in the Two Shops
Two-Tailed Z Test
Two-tailed Z-Test helps in testing whether the sample is greater than or less than the certain
range or value. Null Hypothesis testing is done by way of two-tailed Z-Test but if the sample is
falling between the critical areas then, in that case, the alternative hypothesis is accepted. As
the comparison of two variables has to be done thus Eco-fone can use the two-tailed Z-Test for
testing the possible difference in the net taking of the shops. This would help Eco-fone in
guiding and efficient decision making thus improving the business practices of the company.
Two-tailed Z-test has been done as follows:
For Alternative hypothesis: Net Taking is not the same for the company for both shops
For Null Hypothesis: Net Taking is same for both the shops
The formula for the Z test:
Given Information
Z Test =1.4142
As can be seen from the above analysis that 1.96 is more than the value of Z thus Null
Hypothesis is rejected and the alternative hypothesis should be accepted by the company. An
alternative hypothesis shows that there is no relation between the net takings of both the shops
of the company due to several reasons. These reasons can be due to factors related to the
environment, geographical or market factors.
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Report for Eco-Fone 2019
1.7 Customer Satisfaction
Calculation of average value:
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Report for Eco-Fone 2019
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Report for Eco-Fone 2019
Thus from the above table following can be concluded that:
 For Question 1 the mean of the frequency is 20.6 which states that the product was
purchased last time by the customer was between 6 months to one year.
 For question 2 in the questionnaire, the average of the frequency is 20.6 which states
that duration for which the product or service was used which comes between 3 to 5
years.
 For Question 3a the average of the frequency comes to 25.75 which states that most of
the customers have rated the customer service as poor.
 Question 3b the quality of products and services have come to good as the average
frequency is 25.75.
 For Question 3c the rating for the Sales Staff is poor as the average for the frequency is
20.6 and the same is lying in the range of poor performance
 For Question 3d the average of the frequency is 25.75 which states that the price which
the customer is paying for such a product is poor as per the customers.
 Question 4 talks about the overall satisfaction with the company for the customer. As
per the response of the customer the average frequency comes to 20.6 which states that
the customer is neutral i.e. neither satisfied nor dissatisfied.
 For Question 5 the average frequency comes to 20.6 which state that the customers are
neutral on the view that they would continue doing business with the company
 For Question 6 it has been stated that the customer would most likely recommend the
product to other people as the average frequency comes to 20.6 stating most likely.
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