Eco-Fone Report: UK Smartphone Market Analysis and Expansion to Canada

This report provides a comprehensive analysis of the UK smartphone market, focusing on the business operations of Eco-Fone, a company selling smartphones and accessories. The report examines the current market trends, including the increasing smartphone usage among adults and older consumers. It analyzes the feasibility of cross-border expansion to Kingston, Canada, weighing the pros and cons and assessing the associated costs. The report also delves into customer satisfaction levels through a questionnaire, highlighting the importance of quality products and services. Furthermore, it discusses quality procedures using the Poisson distribution to ensure efficient operations, particularly in managing invoices. The analysis includes financial aspects such as costs of a new building and potential differences in net takings between existing shops. The report concludes with key findings and recommendations for Eco-Fone's strategic growth and market positioning.

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REPORT FOR ECO-FONE
Date: June 19, 2019

Report for Eco-Fone 2019
INTRODUCTION
In present day scenario, technology has taken over almost every aspect of one's life.
Thus, creating a pressure in some markets, specifically smartphone, to adopt these changes in
an agile manner (Bernaciak, 2015). Eco-Fone is one such business that trades in selling of
smartphone as well as accessories. Its shops are located in Putney and Richmond. This report
aims to denote UK's Smartphone market in relation to cross-border expansion. Additionally, it
critically assesses challenges, opportunities, quality issues that are faced by Eco-Fone along
with a detailed analysis regarding customer satisfaction using a questionnaire, quality of the
product, sources of finance as well as smartphone need in the market.
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Report for Eco-Fone 2019
Analysis of Issues for Eco-Fone Smartphones
1.1 An Overview of the Mobile phone market in the UK
Even though mobile devices are only a decade old, the global smartphone industry,
including UK, has undergone many changes since its introduction. It has become a
multifaceted device whose use is only expected to grow intensively in the forthcoming years.
With respect to work-related activities, machine-learning is an essential part of mobile phone.
As per the Mobile Consumer Survey 2017, 81% of smartphone owners have knowledge
regarding at least one application that incorporates machine-learning. Here, the most popular
and widely used application is Predictive Text (Global mobile consumer survey, 2017). Two-
third were aware about it and 50% of them used it. Also, 19% of respondents utilized
smartphone for business purposes post-working hours.
Millions use their smartphone to submit time-sheets rather than paper based or PC
centric forms. In Mid-2017, the most ordinary usages of smartphones included electronic mail
(44%), audio calls (34%) as well as schedule management (23%) whereas applications related
to legacy information and reporting systems accounted for lower usages. This was due to the
fact that they were not customized or integrated well enough to be run on a smartphone. The
workforce comprising of those individuals who did a lot of walking around and did not require
processing or analysis of vast information such as salespersons considered smartphone as their
ideal device to be associated with at the workplace. Also, 64% respondents also claimed that
using personal smartphone at work resulted in an increase in distraction. The survey also
asserts that smartphone usage is fundamental to enhance productivity, authentication and
identification at workplace in the future.
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Report for Eco-Fone 2019
1.2 Forecasting the UK Adult Smartphone use
2012 2013 2014 2015 2016 2017 2018 2019
0
1000
2000
3000
4000
5000
6000
2060
4020 4000 4000 4003 4002
4646.73333333333
4922.70476190476
Mobile
Usage
Years
Mobile Usage
Illustration 1: Smartphone Usgae among Adults (2012-2019)
The above graph has been derived using linear chart as it provides an accurate and clear
depiction of information mentioned in Figure 3, Page 13 of the Deloitte Report on UK Adult
Smartphone Use for the time period spanning between 2012 and 2017. This would not have
been possible if bar/pie chart was used for the same (Caiazza, Pozzolo and Trovato, 2014).
Looking at the graph above, it is evident that between 2012 and 2013, a steep increase has been
experienced in smartphone usage wherein the adults use mobile phones 100 times in a day
specifically for the demographic aged between 16 to 75 years. For this age group, 34% people
were found to be addicted to the smartphone. These people utilised their devices at all times be
it while consuming food or attending an event with their families. As far as the years 2018 and
2019 are concerned, it has been forecasted that this usage rate will increase by 16.11% and
5.93% for the respective years.
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Report for Eco-Fone 2019
1.3 Smartphones - A potential market for older customers
It is forecasted that, in recent years, there has been a rise in smartphone sales among old
consumers residing in the UK. It has been observed by many researchers that 71% of
consumers aged between 55 and 75 years owned an app-supportive phone. Out of these,
roughly 50% of the adults had Facebook installed on their devices. 20% of this demographic
also checked their phones 15 times a day with national average being 56%.
However, the usage rate among this demographic was found to be lesser than younger
adults. Deloitte observed that one of the key reasons behind this related to the wealth such
members of the community possessed with them (Smartphone sales boom, 2019). As per
Deloitte, this member group contained higher than average wealth which allowed them to buy
premium handsets. Some of the features that have been identified through the research of
online secondary sources are enumerated as under:
 Bigger smartphone screens facilitate easier navigation for this generation as they
usually experience weak eyesight with growing age.
 User-friendly interface enables older generation to utilise mobile applications easily and
promptly with efficacy.
 Weak memory results in alienation of important information. Since smartphones are
easily accessible using Face Recognition feature, it is a clear favourite among this
demographic.
 Growing dependency on the mobile devices for financial transactions has also resulted
in an increase in number of smartphone owners aged between 55 to 75 years.
 Hand-me-down approach has also resulted in many senior adults possessing a phone
that previously belonged to a family member.
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Report for Eco-Fone 2019
1.4 Feasibility of Expanding business to Kingston using Pros and Cons table
As per the given case scenario, Eco-Fone has been experiencing a thriving business in
terms of revenues. This is mainly achieved by the company's 2 shops located in Borough,
Richmond. With an aim to continue with this performance, Eco-Fone has decided to undertake
cross-border expansion for its trading operations to Kingston, Canada. A cross-border
expansion is one which entails setting up of business in a foreign company with a view to earn
profits. However, it is important to take into account both the pros as well as cons while
deciding to go forward with a cross-border expansion as it requires additional capital and
proper knowledge of local communities belonging to that area (Bertrand and Capron, 2015).
For this purpose, the following list has been formulated with proper weights assigned based on
their relevance and importance:
The collected evidence helps in ascertaining that Kingston would prove to be a
profitable market to invest in for the company. As pros weigh out the cons, it can be said that
Kingston would prove to be profitable venture for the business, mainly due to the fact that it is
one of the busiest business centres of Canada making it a central point of entry for a business
enterprise such as Eco-Fone.
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Report for Eco-Fone 2019
1.5 Costs of a New Building
(a) Ascertaining Equal Monthly Cost:
Since the business has decided to undertake cross-border expansion, it is important for
it to have improved facilities along with spic-and-span premises that enable smooth
merchandising use in the Central Kingston area. As per given case scenario, Eco-Fone is owner
of the two shops located in Putney and Richmond. However, it seeks to obtain the new
building in Kingston on lease whose asking price is £400,000 that is negotiable to £350,000.
The following equal monthly cost has been calculated for 180-month mortgage wherein the
rate of interest charged to the loan owed at the beginning of every year amounts to 7% per
annum (Alade, 2014).
Based on the calculations provided in the Appendices section of this report, it is
ascertained that the business would need to incur £566,262 with a total interest payable
£216,262 over the course of 15 years.
(b) Well-known Commercial Mortgage Lenders:
 Barclays
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 Clydesdale Bank
 RBS
 Lloyds Bank
 HSBC UK
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 TSB
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1.6 Testing the Possible Difference in Net Takings in the Two Shops
Eco-Fone has been operational through its shops located in South-West London. Both
these retail stores have been running for some time now (Eilenberg, 2014). In the context of
given case scenario, the daily net takings relate to the net sales the shops make on a day-to-day
basis. The two retail shops offer discounted smartphone devices as well as accessories to the
customers residing in these regions as well as in nearby areas. In order to ascertain that whether
or not the shops' net takings for both the regions were identical or not, a sample of 40 net daily
takings is extracted and following analysis has been carried out using statistical measures of
central tendency as well as dispersion:
As per the aforementioned table it can be observed that on an average the net daily
takings earned by the shop located in Putney is £100 whereas for Richmond it is £90 along
with a standard deviation of £20 and £40 for respective areas. Using these values the total net
daily takings come to £4,000 in the case of Putney and £3,600 for Richmond. Thus, indicating
that the total net daily takings is not same for the two areas even though the sample size of the
two shops is same. The main reason here can be attributed to the level of deviation experienced
by both shops in their daily business activities. Therefore, if they need to increase their sales as
much as Putney, the business needs to minimize its level of dispersion among its operations.
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1.7 Customer Satisfaction
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