Financial Analysis of Eco-Fone: A UK Mobile Market Case Study

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Summative assignment
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Table of Contents
Overview:...................................................................................................................................3
Question 1:.................................................................................................................................4
Question 2:.................................................................................................................................5
Question 3:.................................................................................................................................7
Question 4:.................................................................................................................................8
Question 5:...............................................................................................................................10
a):..........................................................................................................................................10
b):..........................................................................................................................................10
Question 6:...............................................................................................................................12
Question 7:...............................................................................................................................13
Question 8:...............................................................................................................................16
Question 9:...............................................................................................................................17
References;...............................................................................................................................18
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Overview:
This assessment will be based on the financial aspects of a company named Eco-Fone that is
working in UK market and going to be created to explain the challenges that are faced by the
company in market and opportunities that are available for the company. Assessment will be
designed in different tasks and each task will describe specific business aspects of the
company. For instance, the Mobile market of UK is going to be investigated in assessment to
outline the consumer availability for Eco-Fone along with the modern trends of the mobile
industry. Statistical methods that are available for the business analysis like Liner forecast,
Poisson test, and Z-test will be applied in assessment to detect the business problems and
recommend the solutions.
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Question 1:
In recent years, huge growth has been reported by the mobile market of UK because large
numbers of customers are available in the market. Users of mobiles are increasing regularly
which can be understood through the fact that more than 32 million people of the UK are
using Smart-phone devices for different purposes. 85% part of the UK population is using
mobile devices out of which 75% of devices are Smartphone (Deloitte, 2017).
Mobiles are offered with many associated facilities which are the main reason for the huge
acceptability of Smartphone devices among people. As per research, more than 50% user of
Smartphone devices utilizes it to handle the activities other standard calls. E-mail handling is
detected as the biggest utilization of mobile phones because more than 41% of people were
using a Smartphone to answer E-mails in 2016. Following graph is enough to understand the
facts:
E-mail Standard calls Time managemnt
0
10
20
30
40
50
60
70
80
90
2017
2016
From the details outlined by the Deloitte, usage of modern mobiles is not constrained to the
calling and texting. Even, youngsters are utilizing mobiles devices in other activities more
than calling and other traditional activities. Gaming, video watching, internet surfing, time
and calendar management are some popular activities for which Smartphone are highly
utilized (Deloitte, 2017). More than 41% of mobile users are handing their E-mails through
Smartphone devices. Activity management through mobile devices reached to 8% of total
Smartphone holders. These findings are enough to say that numerous growth chances are
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available for the Eco-Fone in mobile market of the UK which can be gained through the
development of unique features in offered devices.
Question 2:
Smart-phones are highly popular among adults for many reasons. Unique features, social
connectivity, durability, etc are some reason for the enlargement in the popularity of
Smartphone devices. As per the research completed by the Deloitte, users of Smartphone,
Tablet and Laptops are increasing continuously. The increment in the user base can be
understood through the fact that only 36% percentage people were adopted tablets in 2013
which enlarged to 68% in 2017 (kbmanage, 2019). At the same time, the user of Laptop
inflated to 78% from 73%. Following Chart is presenting descriptive information about the
ser enlargement of three selected devices:
2012 2013 2014 2015 2016 2017
0
50
100
150
200
250
laptop
Smartphones
Tablets
Sales forecast of Smartphone:
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2012 2013 2014 2015 2016 2017
0
10
20
30
40
50
60
70
80
90
Smartphones
Smartphones
As per the research made by Deloitte, the popularity of Smartphone devices has been
enhanced very fast. In 2013, only 62% population of Mobile users were utilizing Smartphone
and the same reached 85% in 2017. From the forecast result, it can be said that the growth
rate of Smartphone usage will be maintained in the next two years.
Also, It is detected that the Liner model of forecasting will not be suitable for the forecasting
of growth in Smartphone usage. To obtain accurate outcomes from Liner model, the relation
of dependent and independent variable should exist between selected factors (kbmanage,
2019). Here, the growth rate of Smartphone usage will be affected by the consumer shifting
to other products which are not related to each other so the Liner chart will not be suitable
here.
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Question 3:
These days the young individuals, as well as the old individuals, are quickly accepting the
advanced mobiles in their daily life. Based on the observation of the few studies, it is
discovered that 68% or old individuals aged above 55 years have embraced the mobiles in
their everyday life for a few purposes. Anyway, the most recent mobiles accompany
numerous applications that are fascinating more adults above 55 years making it more useful
for their way of life (Kelion, 2017). Several essential components making the cell phone
progressively more fascinating to the old age population of the UK are as follows;
New features and applications:
Mobiles nowadays have much innovative and most recent application having imaginative
thought after them assisting the old age people in their regular day to day life. These
applications give suitable goals to old individuals with their day by day life challenges. Like,
online cab availability, online pharmacy and grocery stores, and all similar applications.
Through these most recent lives supporting mobile applications, more old people are
adopting the Smartphone for everyday life.
Easy to use
Elderly individuals of UK make a great salary and hence quickly embracing mobile phones.
Mobile phone organizations furnish gadgets with various helpful applications for an elderly
person. Like a flashlight, the application is useful for senior citizens as in the night or any
dark place they can use flashlight anytime anywhere. The speech recognition features help
the elderly people in typing and searching for things with their voice without actually typing
anything.
Screen size and time-saving
Mobile phone organization has cantered their focus mainly on expanding the screen size of
the mobiles as the small size for a senior citizen is an issue as most of them suffer from the
problem of eyesight and another eye disease. The big screen size makes mobile usage more
comfortable for them (Kelion, 2017). Also, the mobile is saving a lot of time as they can
invite their friends or communicate with their relatives in less than a minute
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Question 4:
Pros and cons analysis:
Business expansion Analysis
Pros Score/10 Cons Score/10
More customers will be
available for the company
9 More specific and quality
products will be required
9
New sources of financing will
be available
10 The adverse impact of
competitive forces from big
players
8
Awareness and acceptability of
brand name in the market will
enhance
8 New funds will be required
which will increase financing
cost and leverage
8
Availability of price-insensitive
consumer
6 The threat of non-
compliance of new
regulations and increment in
legal spending
6
Large markets, less competition,
and higher sales
9 Management became
complex and problematic
5
Sum of 42 Sum of 36
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Positive results 8.4 Negative results 7.2
Every business expansion plan comes with problems and profit opportunities so it is
necessary that problematic components of the new project are solved appropriately to enable
the benefit from new opportunities. In provided case, expansion of business to Kingston is
proposed by the Eco-Fone which is containing some problems and numerous growth
possibilities (Charyk, 2017). Through the investigation, it is detected that new product will
increase the competition with large companies but reduce the threat of market loss.
Acceptance of new product will enlarge the fund requirements but the decline will be
identified in price sensitivity. By comparing, it is concluded that the project should be
accepted.
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Question 5:
a):
Following is the repayment schedule for the loan of 350000. The interest rate that is
considered for the calculation is 7%. As Eco-Fone is the thing to fiancé the new building
through a mortgage loan, repayment obligation will be as below:
b):
There is many banking and financing companies are working in the UK which is engaged in
loan providing services. HSBC, NatWest, Barclays and more are some examples of large
banking groups that are working in the UK market. From the analysis of loan products, it is
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detected that each banking institution is offering mortgage loan with different facilities
(Barclays, 2019). For example, the loan can be obtained from HSBC at a low-interest rate but
additional changes will be applied if early payment will be made by the Eco-Fone (HSBC,
2019). Fixed interest loan of ABC banking is also a popular product but benefit of reduction
in interest rates will not be available for the company. The situation is indicating that
borrowing should be made with sufficient analysis of own requirements and terms of the loan
contract to avoid problems that may arise in the future.
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Question 6:
As per the case, Eco-Fone is operating two shops at different locations and managers wants to
know about the similarity or diversification among net takings these shops. To evaluate the
accountability among the net takings, Z-test is going to be applied here which can be
explained as the concept of statics to evaluate the mean value of different frequencies. This
framework is implemented in normal distribution so sample size should be 30 or more so that
accurate conclusion can be outlined (S, 2018). The concept of Z-Test works on the
assumption of NULL hypothecations which states that the result of the test should be between
the range of 0.5>n<0.5 to meet the considered relation.
Following terms can be explained as the main requirements of Z-Test:
 The large size of the sample should be selected so that the data population can become a
normal distribution.
 Random sampling activities should be applied to assure the same selection chance to each
data variable.
Following formula should be applied for the Z-Test:
Through calculations:
= 1.41
As value determinate by the Z-Test is not fulfilling the needs of Null assumption, it is marked
that the net takings of both shops are not the same. Net takings of both shops will be
assumed the same if results of Test fall between the ranges of Null assumption.
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