Eco-Fone Expansion Feasibility Study: Kingston Market

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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
1.3Smartphones - A potential market for older customers.......................................................5
1.4Feasibility of Expanding business to Kingston using Pros and Cons table.........................6
1.5Costs of a New Building......................................................................................................7
1.6Testing the Possible Difference in Net Takings in the Two Shops...................................10
1.7Customer Satisfaction........................................................................................................11
1.8 Quality Procedures............................................................................................................12
1.9 Conclusions &Important Findings....................................................................................13
2. References...........................................................................................................................14
3. Appendices..........................................................................................................................16
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Report for Eco-Fone 2019
Introduction
The use of mobile phones has increased as the lifestyle of the people has changed. It can
mainly be seen in the old aged people, where they have started using Smartphone to connect
with people around the world. Eco fone, a company dealing with Smartphone wants to expand
their business in the market of Kingston as they have the maximum amount of Smartphone
users. This assignment will be prepared by them to check the feasibility of their expansion in
Kingston keeping in mind the pros and cons of the place along with the expenses that will be
incurred by them.
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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
The use of mobile phones has increased in the United Kingdom. Earlier phones are now
changed with Smartphone, where people can use these phones for different purposes
(Deloitte.co.uk, 2017). It is witnessed, that due to the multiuse of the mobile phones there is a
good market in the country of United Kingdom. Smart phones are now used for writing emails,
checking calendars, using office tools like PowerPoint, word and excel along with the previous
activities like calling and messaging. A graph will be presented to demonstrate the use of
different activities in the mobile phones that will make an understanding of the market of
mobile phones in the United Kingdom.
Figure 1: Graphical representation of activities of working people in UK
(Source: Created by learner)
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Report for Eco-Fone 2019
1.2 Forecasting the UK Adult Smartphone use
There has been a boom in the sales of Smartphones to the adults in the market of the United
Kingdom. In the recent researches, it was found that 71% of the people in the age group of 55
to 77 years have smartphones. It was also found out in the research that this age group have the
highest rate of adoption in the last five years in comparison to other age groups. This is
generally due to the change in the lifestyle and behaviour of the people.
Table 3: Forecast table of smartphones
(Source: Created by learner)
Figure 2: Graphical representation of forecasting table
(Source: Created by learner)
The above table shows the forecast of the use of smartphones by the adults in UK. It can be
observed that there is a rise in the use of smartphones from 94% in the year of 2018 to
100.31% in the year of 2019. This will get reduced to around 94%v in the year of 2020 as the
boom in the market will be present for the year of 2019. This is generally because people have
started buying new smartphones and they will use those for a minimum of five years (Jardine
et al., 2015). These smartphones are used to communicate with people of different parts of the
world. The old people also use these phones to have a better social life in the online sector by
using different applications like facebook and twitter and even scroll down for different news.
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Report for Eco-Fone 2019
1.3 Smartphones - A potential market for older customers
According to different researches conducted by the BBC (BBC News, 2017), it was found out
that the use of smartphones was high within the age group of 55 to 70. There are different
reasons that back this finding. These will be elucidated below:
1. Since, the world is changing rapidly, people use less cash and use mobile wallet as a
payment option so that there is no fear of theft (Heffner and Mull, 2017). The older people
have also started using this system so that they do not need to carry lot of cash.
2. The use of social sites like facebook, Instagram and twitter has increased among the older
people as well. This is to connect with the relatives, who stay in different parts of the world.
The family members of the old people also stay at different places for their education and jobs.
This also helps the old people to connect with their family members as well.
3. The use of smartphones has also increased among the old people as they get different types
of news from different applications that are present in today’s world. This helps them to read
the news from those application rather than buying newspapers.
4. The old people can use smartphones to watch videos and audios that they like so that they
can pass their time nicely (Land and Nagin, 2017).
The above points show that there is a good market for older customers that can be used by Eco
fone so that their profits are increased and the market share also gets higher.
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Report for Eco-Fone 2019
1.4 Feasibility of Expanding business to Kingston using Pros and Cons table
Table 4: Pros and cons table
(Source: Created by learner)
The above table provides a detailed score of the advantage and disadvantage of Eco fone
expanding their business in Kingston. It can be observed from the table that there are various
areas that are necessary for the organisation to look at. Like, there is a high rate of employee
turnover (Mobasheri et al., 2015). Eco fone needs to reduce the turnover of employees in their
organisation so the operation can be held properly. The organisation needs to identify areas
from where they can raise funds. Since, they want to expand their business they need to raise
huge amount of capital. The good things of the expansion is that the customer base is strong
and if they provide proper service to the people of Kingston then the base will be stronger.
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1.5 Costs of a New Building
For the mortgage,
Principal amount of loan = £ 350000
Rate of interest of the mortgage = 7 %
Time period of the mortgage = 180 months
Rate per year = 7 % / 1200
= 0.0058
Rate for 15 years span in total = 7% / 1200
= (1 + 0.00583) 180
=2.849
Thus, from the above calculation, compound interest
= 0.00583 * 2.8489 / (2.8489 - 1)
= 0.0089
Thus, the payment per month = 350000 pounds * 7%
= 350000 * 7 / 100
= £ 3145.90
The above calculations provide a clear view of the amount of money that is required by Eco
fone to expand their business. The amount of money will be taken from the banks and the
principal amount is 350000 pounds. The amount of money that is to be paid per month is
3145.90 pounds. Eco fone needs to identify the areas through which they will sell their
products so that they earn profits after paying all the dues. Eco fone can take money from
various banks of Kingston. The banks along with their logo will be provided below:
Companies Logos
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Report for Eco-Fone 2019
Lloyds
Santander
Nationwide
Barclays
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Report for Eco-Fone 2019
Royal Bank of Scotland (RBS)
HSBC
Halifax
Yorkshire
Table 7: Logo Table of the mortgage companies
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Report for Eco-Fone 2019
1.6 Testing the Possible Difference in Net Takings in the Two Shops
Provided are: H1: μ1 ≠ μ2 and H0: μ1 = μ2
The values of the samples here are as follows:
n1= 40;
n2 = 40;
s1 = 20;
s2 = 40;
Therefore, standard errors
= √ (202 / 40) + (402 / 40)
= √10 + 40
= √50
= 7.07
Here, it is seen that, 95% of (X1 bar – X2 bar ) and the values will be placed in the form of (-14,
+14)
The actual value is (X1 bar – X2 bar)
= £ (77 – 90)
= - £13
The above calculations shows the testing of the net takings of the two shops for which the
hypothesis testing is performed. It is seen that the hypothesis lies within the range of -14 to
+14, which suggests that this system can be accepted by the organisation Eco fone. This also
suggests that the net takings of the shops tend to be equal. Here, H0 hypothesis will be accepted
in this case. This is very important for Eco fone as the testing will confirm that if they will get
proper income from the shops or not (Gavali et al., 2017). These will test the hypothesis in
such a way that will ensure the condition of the market as well so that the issues can be
reduced.
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Report for Eco-Fone 2019
1.7 Customer Satisfaction
Table 9: Tabular Representation of the response of the people for the questions asked
(Created by learner)
Table 10: Tabular Representation of calculation of standard error
(Source: Created by the learner)
The two tables that are presented above shows a clear view of the different types of response
that is provided by the people from the questions that were asked to them. This was done to
perform the market analysis. The response table will help the management of Eco fone to
understand about the different types of responses given by the people who were questioned by
the management in the form of interview (Collins et al., 2015). These are important for Eco
fone as they need to check the taste and behaviour of the people in the market and design their
product according to that taste.
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