Business Analysis Report: Eco-Fone Expansion Strategy

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Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................4
Task 2...............................................................................................................................................5
Task 3...............................................................................................................................................7
Task 4...............................................................................................................................................8
Task 5.............................................................................................................................................10
Task 6.............................................................................................................................................12
Task 7.............................................................................................................................................13
Task 8.............................................................................................................................................14
Task 9.............................................................................................................................................15
Task 10...........................................................................................................................................16
Appendices....................................................................................................................................17
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Introduction
Expansion of a business is extremely necessary for its success. Eco-Fone, with two shops in
Putney and Richmond, is a seller of both Smartphone and its accessories. The report has been
prepared on the sale of Smartphone in the UK and the Smartphone market in the nation, their
uses among people, even the elderly ones. Followed by these discussions, evaluation will be
made on the mortgage amounts that Eco-Fone has to pay for the building in Kingston, the
responses of customers and such other aspects. In order to make these discussions, the Poisson
distribution and several other statistics model have been used in the report.
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Task 1
Different researches have been conducted over the utilisation of Smartphone within the UK
market. The survey that Deloitte conducted shows approximately 50% of the 32 million people
of the productive workforce of the nation use Smartphone for dealing with their work-associated
issues (Deloitte.co.uk, 2019). As per the findings, 44% of the population says that they use
Smartphone to receive and send mails while 23% use them for managing their calendar and 34%
use for video conferencing (Deloitte.co.uk, 2019). Approximately 43% among them are also
observed to use instant messaging applications, for example, WhatsApp (Deloitte.co.uk, 2019).
The Smartphone industry in the UK also shows a boom in turnover for sale of both Smartphone
and Smartphone accessories among the elderly individuals (Kuss et al., 2018). A dramatic
improvement can be seen in Smartphone sale in the UK since 2012 and forecasts say that they
will improve further. In this context, Anshari et al. (2016) added that citizens in UK move
around for work associated purposes mainly through using Smartphone while Deloitte’s survey
shows that use of Smartphone in the nation would improve further to transmit video contents on
TV screens as well.
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Task 2
Based on the information that Deloitte collected, the table prepared below shows Smartphone
utilization in comparison to that of PCs and tablet for 2018 and 2019 -
Table 1: Comparison of Smartphone use in comparison to PCs and tablets
(Source: Deloitte.co.uk, 2019)
The “forecast” function has been applied for forecasting the smart phone use during 2018 and
2019 and has been reflected in the figure below -
(Source: Created by the learner)
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2012 2013 2014 2015 2016 2017 2018 2019
0%
20%
40%
60%
80%
100%
120%
Values Forecast
Lower Confidence Bound Upper Confidence Bound

For forecast of market penetration in the years 2018 and 2019, the extended forecast method will
be suitable. The extended forecast method is advantageous when the variables are progressive or
are digressive steadily by nature (Buizza and Leutbecher, 2015). From the data above, the
variables can be seen not to be constant by nature and the use of PCs have increased from 2012
to 2013 by 3% from 73% to 76% followed by a lowering in 2014. Due to this consistency, the
forecasting has been done by moving average. Moving average is advantageous in nature when
the variables can be seen to be inconsistent (Xu et al., 2017).
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Task 3
From the research that BBC conducted on the reasons for the increasing popularity of
Smartphone use shows why Smartphone are commonly used among old customers. It can be
determined from the research that more than 70% of people during the age group of 55-75 use
Smartphone and various Smartphone applications (BBC News, 2019). This sample comprised of
1163 people and most of them have reported to be using Smartphone based on their family
members’ recommendations (BBC News, 2019). This research also showed that elderly people
are recommended Smartphone to lead their lives conveniently. The reports of the survey show
elderly smart phone users have stated the following reasons to use Smartphone -
 It becomes easier for elderly people to book cabs instead of scheduling taxis by waiting
on the streets.
 They are also able to pay their parking tickets with ease via their Smartphone
 The elderly people who have poor eyesight can now go through the news from their
Smartphone, watch the videos they like.
 The smooth and interactive operating systems of Smartphone and the applications
provide improved functionality for elderly people.
 Features such as face detection, fingerprints, lock and unlock, ease of picking up calls
and others have made it easy for them to use Smartphone as well.
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Task 4
For the determination of whether the expansion of the business Eco-Fone will prove
advantageous in case of Kingston or not, one of the easiest methods that can be used is the
development of a pros and cons table. Through the medium of this table, the company can be
evaluating the potential pros and the cons in terms of expanding to Kingston, as weights have
been allocated to each of the factors that can be affecting the business followed by deriving
average. The table is as follows -
Should the expansion of the business to Kingston be considered?
Pros Score on
10
Cons Score
on 10
Addressing the demand of the
marketplace
8.5 Increasing turnover of
workers
7
Improvement of the resources of the
firm
8 Control distribution 4
Achieving a larger volume of clients 8 Expenditure on logistics 6
Impact over the prices in the
marketplace
8 External fund availability 7
Enhancement of the name of the
brand and gaining recognition
9 Shortage of funds and cash 6
Excessive amounts of sale produced 8.5
Advantages of competitive rivalry 7
Total no. of pros 41.5 Total no. of cons 23
Average of the Pros 8.14 Average of the Cons 6.0
Table 3: The table considered for pros and cons of expansion to Kingston
(Source: Created by the learner)
This table above helps in the evaluation of not only the cons but also the pros related to the
expansion of the business in the market of Kingston. It can be determined from the table that the
average pros of the entrance of Eco-Fone in Kingston are 8.14 while the average cons of entering
the market is 6.0. This shows that the advantages of entering the marketplace are much more
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than that of the limitations. Some of the cons of the market, for example, Increasing turnover of
workers, external fund availability, and shortage of funds and cash need to be concentrated on.
However, from the overall analysis, it can be said that entrance of Eco-Fone is favourable.
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Task 5
For ensuring that the organisation Eco-Fone is able to expand its operations into the market of
Kingston, a considerable amount of money requires being invested. The new building premises
that the business is considering for purchase or leasing is subject to repaying mortgage. The
computation of the amount of mortgage has been done below -
The principal value of mortgage = £ 350000
The interest rate = 7%
The time period = 180 months
The rate of every year = 0.0058
The rate for 15 years = 2.85
Thus, CI (compound interest) = 0.0089
Thus, payment per month = £ 3145.9
(a) The computation done above shows that the organisation Eco-Fone can acquire or purchase
the new building premises for a monthly payment worth £ 3145.9 at a rate of 7% interest. The
organisation can be paying this payment for a term of 15 years. Therefore, the total amount that
Eco-Fone requires paying for this new building equals to £ 387740 inclusive of interest.
(b) For being able to take loan and paying the amount of mortgage, the organisation Eco-Fone
can consider various banks, among which the Llyods Bank is going to be the most suitable one.
It is because one of the biggest retail as well as commercial banks operating in the UK is the
Lloyds Bank and it has branches throughout Wales and England (Casu and Gall, 2016). The
selection of this bank is going to be beneficial since it acts as a great support for the expansion of
small as well as medium size organisations. The figure below shows the logo of the Lloyds Bank
-
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Figure 1: Diagram showing Lloyds Bank’s logo
(Source: Lloydsbank.com, 2019)
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Task 6
Eco-Fone, from its two retail stores in Richmond and Putney, sells mobile phones as well as
mobile accessories at discount prices. The sample, which will have a daily taking of 40 from the
first shop of Eco-Fone, will be having a standard deviation of £ 20 while its mean will be £ 100.
On the contrary, the sample, which will have a daily taking of 40 from the second shop of Eco-
Fone, will be having a standard deviation of £ 40 while its mean will be £ 90. Thus, from the first
shop, the 40 takings generated revenues worth £ 4,000 while its standard deviation is used to
represent variations existent among the variables of the observation. In terms of the first shop,
the differences between the two units sold stands at £ 20 while the revenue that the second shop
generated stands at £ 3,600. The standard deviation in case of Eco-Fone’s second shop is £ 40.
Therefore, one can evaluate that the first shop has net takings much superior in contrast to the
one of the first shop and it is mainly because the first shop has better revenues earned as well as
the products that it sells to customers are higher in price. Similarly, the first shop has lesser
variations of net takings in case of the first shop in comparison to the variations of its second
shop.
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