Analysis of Innovator's Mobile Industry: External and Internal Factors

This report provides a comprehensive analysis of Innovator's, a mobile industry company operating in the USA, Asia, and Europe. It examines the external environment, including competitors, geography, technology, and customer preferences, with a focus on market segmentation. The report utilizes tools like Porter's Five Forces and PESTLE analysis to assess the competitive landscape and identify market opportunities and threats. It further evaluates Innovator's competitive advantages, particularly its investment in research and development, and analyzes its market share compared to competitors like Red, Blue, and Yellow. The report also includes stakeholder analysis and concludes with strategic recommendations to improve performance in the next three years, offering valuable insights for business development and strategic management within the mobile industry.

Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
THE EXTERNAL ENVIRONMENT.............................................................................................1
Competitors..................................................................................................................................1
Geography and Technology.........................................................................................................1
Customers' preferences and market segmentation.......................................................................2
Sub-strategic groups in Mobile Phone industry...........................................................................2
Market Shares..............................................................................................................................3
Porters' Five Forces Analysis.......................................................................................................4
Pestle Analysis.............................................................................................................................5
Critical evaluation of the sources of competitive advantages utilized by the innovator's...........6
Analysis of investment in research and development......................................................................8
Recommendation to improve the performance of next 3 years...................................................9
Stakeholder analysis.........................................................................................................................9
REFERENCES..............................................................................................................................12

INTRODUCTION
. In this report, the focus is on Innovator's which is operating in the mobile industry of USA, Asia
and Europe. Its competitors are Yellow, Ochre and Navy etc.
This report will cover external and internal environment of the chosen Company. It will
also highlight the stakeholders analysis and analysis of the investment in research and
development with given future recommendation.
THE EXTERNAL ENVIRONMENT
Analysis of the external environment of Innovator's was done by following approaches
which are mentioned below -
Competitors
According to the CEISM simulation, following companies are the competitors of
Innovator's which are such as -
 Red
 Blue
 Leaders
 Grey
 Ochre
 Pink
 Navy and
 Yellow.
All the companies are operating its business in Mobile Manufacturing industry. Moreover
these companies are focusing on the same customers group and trying to attract them towards
their own products such as mobiles and its related accessories (Bhardwaj, 2016).
Geography and Technology
According to the CEISM simulation, the mobile phone industry is targeting three markets
which are as follows -
 United States of America
 Asia
 Europe
These three markets are contrasting from each other in various market aspects. There are
different demand patterns due to customers living in these three countries. Their needs, buying
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behaviours, per capita income and wealth distribution are different from each other which make
them differentiate from other countries' customers.
Along with differences in demand by the customers, one more business aspect is different
in trio countries such as USA, Asia and Europe. That business aspect is organizational
technologies which are distinctive at the same time. Thus, these differences make the
competition tougher for the countries (Holmes Jr and et.al., 2016).
Customers' preferences and market segmentation
Analysis of customers' demand is very important for any companies as it lead company to
determine their segmentation strategies and helps in understanding the customers' perceptions.
Due to different religion and background, Customers' perceptions towards Innovatar's and
its competitors. Thus, it is very important for all those companies to do market segmentation.
Market segmentation strategy helps companies to understand their customers and accordingly
provide them products and services which can fulfil their needs and wants. Along with the
purpose of fulfilling the needs and wants of the customers, there is one more motive for which
companies are doing market segmentation. That motive is to gain competitive advantage over its
competitors. Here with the accordance of CEISM simulation, Companies are doing market
segmentation on the basis of tech 1, tech 2, tech 3 and tech 4. Analysis of this market
segmentation shows that some companies did technological investment late and another
companies did it at the right time. Due to this timing, those companies who did it on right time
are gaining more customers' satisfaction while another companies are getting loss in the industry.
Thus, it is very important for all the companies to make sure that customers' needs and wants
must be fulfilling on the right time (Jain and et.al., 2017).
Due to technological investment in Tech 4, demand of Innovator's Company increased in
Markets Europe and USA. But in market Asia, Due to late investment in Tech 4 as compared to
another companies, Innovator's has to face loss.
Sub-strategic groups in Mobile Phone industry
It can be defined as the manner through which companies are trying to create the
positioning of its products in the market. Positioning refers to the marketing strategy through
which companies are trying to create a different image in the mind of its customers by standing
out from its competitors (Kehoe and Mateer, 2015). Here, Innovator's is trying to position its
products and brand in the market by doing investment in research and development strategy.
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From the above graph, it can be interpreted that Company Innoavtor's are doing
investment in research and development in order to create positioning of itself in the mind of
customers. It is also can be said that not only Innovator's but also another companies such as
Red, Blue, Leaders and Grey etc. are also doing the same. This lead all the companies to be more
competitive year by year and help it to gain competitive advantage over its competitors.
Market Shares
It refers to the portion of the market on which the company has capture by providing their
products and services to the customers. It is represented as the percentage of sales volume of the
company (Lardy, Lieberthal and Chen, 2019).
3
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Total
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
THE INNOVATOR'S
Red
Blue
Leaders
Grey
Ochre
Pink
Navy
Yellow

From the above graph, it has been interpreted that Innovator's market share is higher than
another companies over the past few years. Along with Innovator's, Red's market share is also
high. Thus, both of these companies are leading companies in the mobile industry. Reason
behind this is both companies are focusing on the research and development which helps them to
get to know about the perceptions of needs and wants of the customers. It lead companies
(Innovator's and Red) to easily fulfil them with the help of various resources available to them.
Porters' Five Forces Analysis
In the market environment, there are various types of factors involves in the business
environment. These factors are highly divided into 2 main heads — Competitive Factors and
External Factors. For the analysis of the competitive factors, Company will do Porter's five
forces model. This model is an analytical tool which helps company to measure the competition
in the market and get to know about the competitive position as compared to others (Carraher,
2018).
Porter's five forces analysis of the Innovator's company are as follows -
Threats of New Entrance – Mobile industry is considered to be highly competitive. There is
tough competition between various companies who are working under this industry. When there
is new entry into the industry, this lead to enhancement in the industry. In order to reduce the
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industrial competition, Company is required to do huge amounts of investments. Thus, new
company don't have that much huge investment amount in order to implement the research and
development strategies. Thus, here the risk of new entrance into market is low.
Threats of Substitutes – Due to high investment in research and development done by the
companies, there is innovation in the mobile and its related accessories which attract the
customers towards the attractive and innovative mobiles. This lead company to face the risk of
substitute. Along with that, Companies are offering new products at the low prices which make it
more attractive for the customers. Thus, here the threats of substitute for the company is high.
Bargaining Power of Buyers – There are few producers of the mobiles and more customers to
buy the mobiles. This lead customers to use their power. If any company is providing their
products at the low prices as compared to others. This lead customers to get easily switch from
one company's brand to another company's brands. Thus, for the company, bargaining power of
the buyers in the mobile industry is high.
Bargaining Power of Suppliers – In mobile industry, Producers are lower than the suppliers,.
For the producing finished goods, company is required raw materials and other resources which
is available by the suppliers. If company don't provide them sufficient monetary resources and
benefits. This lead suppliers to get switch from one company to another. Thus, in this industry,
bargaining power of supplier is high (Carraher, 2018).
Industry Rivalry – It refers to the force which lead to tough competitions between various
companies who are working under the same industry. For the Innovator's, the industry rivalry are
red, blue, navy, orange and leaders etc. Thus, the degree of this force is high in the mobile
industry.
Pestle Analysis
If any company is going in different country where it does not really exist then it
becomes very much important that they are following the rules, policies and procedures of that
particular country. However, for this also it is important that they are first analysing the whole
situation which can only be done after they are identified marked completely. Into this Pestle
analysis will help firm in not only identifying current market situations but also knowing about
recent trends. PESTLE analysis is that tool which help company to understand their market in
which they are ready to operate their business in the future. There are various components which
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form a part of this tool while identifying market threats and opportunities like including political,
economic, legal, technological, environmental and social cultures (SHTAL and et.al., 2018).
Political- This is one of the most important part of business environment which firm need to
identify with help of which they would know political stability, terms and conditions laid down
by government of specified nation. Like for instance if company is exploring any new market
they should know how much stable country's position is or the relationship with other nations. If
this is going in positive way then company should try to establish into that country. However if
this is not favourable then firm should rather avoid exploring and searching for new options.
Economic- This includes economic performance of country like its inflation deflation rates,
employment, interest and per capita income of households. If the nation is not having good
employment rates then firm will not able to find suitable employees for their business at the time
of operating there.
Socio-Culture – It involves life style of customers, demographic structure of the nation and
wealth distribution of the population etc. Due to need of comfort in life, Customers are
demanding more and more innovative mobile phones which lead to change in their life style.
Legal- This is another important factor that includes all laws related with mobile industries like
following Consumer right act they will not face any difficulties by customer's side. For proper
working they must also follow Employment Right Act along with National Minimum wage Act.
Technological- Technological factor is considered to be one of the important factor through
which company is able to make their products more innovative. Example of this factor are
innovation speed, innovation life cycle, technological changes and research and development.
Due to high investment, Company is able to do research and development which lead to
innovation in the industry and change its trends.
Environmental- This factor includes wastage of materials, waste management, natural distater
and climate which can affect the company's operations. Due to radiation from mobile phone,
there is increasing in pollution level of the nation which lead company to face actions from
societies and government (SHTAL and et.al., 2018).
Critical evaluation of the sources of competitive advantages utilized by the innovator's
A value chain is called the process and activities that is being used by innovator's
company in specific industry with the main aim of delivering a valuable products and services to
its customers (Jain and et.al., 2017). There is a link and interrelation of all activities which this
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company operates to create and take a competitive advantages. The innovator's company make
an effective use of some analysis tools for internal analysis and overseeing all factors that can
impact on its effectiveness. Value is called the total amount that buyers have willingness to pay
for the company's products. When the company offer them qualitative and valuable products then
they pay more for that.
Porter's value chain analysis model help this company to take competitive advantages and
increase its sales as compare to its rivals. There are several rivals of The innovator's company
such as Red, Blue, Leaders, Grey etc. Annual sales of The innovator's is approximate 65,25,016
which is the highest amongst its competitors (Mudambi and Puck, 2016). The main reason of its
increasing sales is using of value chain analysis model as it involves several activities such as
maintenance, production, marketing, service etc. It is the ability of this organization to put its
generic strategy into practice. Generic strategy includes:
Cost leadership: According to this strategy the company requires to sell its products and
services at lowest prices and become the cost leadership in the industry.
Differentiation: Differentiation means to select the important features and attributes that
potential customers want to select at the time of purchasing products at a premium price.
Focus: According to this strategy there is a requirement for the company to focus on each
strategy on the basis of market segments (Horng, Chang and Chen, 2016).
The innovator's company wants to outperform its competitors via differentiation itself. So
it focuses on this strategy and provides higher quality products in its value chain activities better
than its all competitors. It is stated that this company invest more in innovation and it is
approximate 1,64,000 which is more than its competitors. It shows that it wants to make
customers know about its qualitative products products. On the other hand it invest less in
research and development as compare to its competitors and it is estimated that it invest 94,593
in research and development (Bhardwaj, 2016).
Its all primary activities requires proper consumption of resources such as labour, money,
equipment, materials etc. So, it can also be said that value chain activities are carried out for
determining costs which can affect its profits. In the context of cost it is stated that its annual
overall administration are approximate 1,74,938 and its competitors expenditures are
approximate 3,19,822 and 2,13958 which shows that it can earn more than its competitors.
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It also makes an effective use of technologies in order to obtain a competitive advantages.
For this The innovator's company invest in promotional activities more than its competitors. This
company focuses on following both primary and supportive activities because there is a link
between both activities that can create value for customers' (Kehoe and Mateer, 2015).
Analysis of investment in research and development
Research and development plays an important role as it helps the company in identifying
all external factors that can impact on the process and effectiveness of the company. It refers all
those activities that produces new products. There are several external or marketing factors that
can have negative and positive impacts. The innovator's company wants to take competitive
advantages so it is important for this company to analyse all factors and focus on research and
development.
According to this view (Hsu, Lien and Chen, 2015) investment in research and
development can help the company in increasing its overall productivity and make it products
and services differ from its competitors. It is also stated that investment in research and
development lead a new type of products. It also let companies to create highly effective
marketing strategies if the company wants to give unique features of products and services. In
the context of The innovator's estimated investment in research and development is 94,593 that
is less than its competitors.
For supporting this view (Holmes Jr and et.al., 2016) showed some other benefits of
investing in research and development. It is said that, more investment and focus in research and
development can help the company in achieving long term income and take competitive
advantages. Ongoing research can also provide some opportunities to The innovator's company
because by research it can see all new channels and demands of customers and on the basis of
research it can try to provide services to its potential customers. So it can be said that there are
several benefits of investing in research and development.
(Un, 2017)argued this view and said that investment in research and development can
increase the overall cost of the company that can decrease the sales. There are several factors that
can affect the research and development and it is not necessary that all research will be authentic.
Demands changes rapidly and it can hamper other processes of the company. Conditions changes
in the market and due to conditions changes, customers needs also changes during the long
research and development.
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For more supporting this view and in the context of disadvantages of investing in
research and development (Martínez-Noya and García-Canal, 2018) stated that research and
development take too much time and cost of the company which can hamper other main
processes and activities like promotional activity of the company. The innovator's company mote
focuses on promotional activities rather than research and development. The main aim of not
investing more in research and development is to decrease the overall cost and increase sales.
This process is mainly depends upon the opinion and views of different types of people about
single products and their characteristics. The lack of respondents can also be a negative factor for
the company' research. So it can be said that along with advantages investment in research and
development has some disadvantages.
Recommendation to improve the performance of next 3 years
Invest more in promotional activities – Innovators invest their capital in promotional activities
that helps to attract the large number of customer and stakeholders.
Focus on production process - Innovators focus on their production activity. Thus, they make
the quality product in order to increase the huge demand of product.
Acquire the smart technology - Organization acquire The high technology in order to produce
the innovative product. Thus, firm have enough funds for acquiring the high technology.
Enter in new market – Innovator enter in new market like Asia. It is one of the market who
have high demand of mobile phone due to development economy.
Differentiate in products - Innovators make the different product as compare to their rivalries
as they introduce the new function in android phones. It helps to attract the large number of
customer.
Focus on developing the best pricing strategy – Innovators focus on developing the best prices
on their product as they apply the reasonable prices on the product. Thus, the pricing strategy is
the main who attract the existing and new customer.
Enter in online marketing – Innovator enter in online marketing in order to expand their
product in worldwide. This is the best option to expand the product and enhance the sales and
demand of product.
Stakeholder analysis
Stakeholder analysis is the process of assessing a system and potential changes to it as
they relate to relevant and interested parties (Lardy, Lieberthal and Chen, 2019. This information
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is used to assess how the interests of those stakeholders should be addressed in a project plan,
policy, program, or other action.
It is important technique for identification and analysing the stakeholder in the
organization where there are different types of stakeholders actively involved in the Innovator
firm those who shows interest towards the project goals and objectives. Managers, employees are
participating in the enterprises and support towards the success of business. In Innovator firm, it
can be used to identify the stakeholders those who have vested interest in the issues within
particular project. It is mainly developing the strategic view of human and institutional landscape
and also creating the relationship between different stakeholders. As per analysis, it will identify
the stakeholder like employee, managers which are helping to the organization in the current
project for identifying the key information distribution at the time of execution process. A group
should be encouraged the other people where employee may participate in different stage of
project development (Tawse, Patrick and Vera, 2019). Stakeholder analysis technique refers to
wide range of tool that identify the need and expectation of major inside or outside the project. It
also acquired the interrelationship, attributes and interface among the project opponents which
assists for planning the strategic for project development. Apart from that stakeholder analysis is
considered the initial step for strategic planning that perform different activities on the basis of
organizational level. If the stakeholder analysis makes valued and consistent activity perform at
level of organizational.
There are different types of internal or external stakeholder who helps company for
achieving the goals and objective (Scott and Scott, W.F. 2019).
Stakeholder can be an individual or groups having interest or claim in company. Stakeholders are
normally split into two groups.
Internal stakeholders: Shareholders and employees (e.g. managers, board directors etc.)
External stakeholders: Customers, financers, contractors, unions, local communities,
competitors, governments and public.
Stakeholder Power Interest
Shareholders Shareholder have power to
investing in the company.
Also they have right on the
company's profitability,
Huge interest on profitability
of firm.
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income and assets, a degree of
control and influence over
company management
selection, preemptive rights to
newly issued shares, and
general meeting voting rights.
Employees Employee have power on the
production activity as without
employees firm not make the
quality product.
Job related interest
Customers Customer is the one who are
the success key of enterprise.
Thus, customer purchase the
product it helps to increase the
market share and profitability
of the company.
Product related interest
Government Government is the one who
give the permission to the
enterprise for operate the
business in different market.
Economy related interest
Public Public is the one who have
power of success the business
and failure the business.
Investment purpose interest
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