Strategic Analysis of the Mobile Phone Industry: PESTLE and Porter's

This report provides a strategic analysis of the mobile phone industry, focusing on the external factors impacting businesses. It begins with an introduction to strategic planning and its importance for organizational success. The core of the report involves a PESTLE analysis, evaluating political, economic, social, technological, legal, and environmental factors affecting mobile companies. The report also incorporates Porter's Five Forces model to assess industry competitiveness, including the bargaining power of suppliers and buyers, the threat of new entrants and substitutes, and industry rivalry. Furthermore, the report examines the industry lifecycle, detailing the stages from startup to decline. The analysis is supported by data on market share, product pricing, and technology adoption across different regions. The report concludes with a discussion on how these factors influence strategic decision-making and market positioning for mobile companies.

Strategy

Table of Contents
Strategy............................................................................................................................................1
Introduction .....................................................................................................................................3
Part 1................................................................................................................................................3
1.1 Pestle analysis...................................................................................................................3
Part 2..............................................................................................................................................13
2.2 Stakeholder report..........................................................................................................13
Conclusion.....................................................................................................................................16

Introduction
Strategies assist organisation in carrying out all business operation in successfully. There
is different decision made within the firm on the basis of factors which impacting the firm. The
present report provides information which on the way organisation need to make decision for
stakeholder mapping. Along with this the way mobile companies make good position in global
market is also analyzed. Apart from this Pestle analysis is conducted for identifying the external
factor which impact the organisation negatively.
Part 1
1.1 Pestle analysis
Pestle analysis is known as the external environmental factor which influence the
organisation performance. Through the help of performance of an organisation can be evaluated.
Further, it can be stated that PESTLE analysis has great benefits for mobile company because it
helps in determining the external factors which are becoming threat for the mobile phone
industry.
Political factors: There are some political factors which impact the profit of mobile company
such as tax rate. If there is increase in tax rate then firm cannot make huge profit on the other
hand if tax is low then company can easily increase its profit (Lamas Leite and et.al., 2017).
Blue company is selling its product globally in three regions that is USA, Europe, Asia.
Therefore, tax and tariff in these three regions are different in respect to sales products and
services. Further due to political tension which take place between USA and the government of
China lead to cause the tariffs for American goods which is exported to the Asian continent is
double that is $7 per handset at last year and in this year is $12.

Here, given above is tax rate which is charged in different country which impact profit of the
blue company. In USA tax rate is 35%, in Asia it is 15% in Europe it is 31%. Therefore, it can be
said that if higher the tax rate then firm receive lesser income after paying tax.
Economical factor: Economic factors are known as those factors which affect sales of the
organisation. Some of the economic factors are known as interest and inflation rates, labor cost,
economic growth prospects, unemployment rates etc (Harun, and et.al., 2016.).
Sales of revenue of different companies are given below
From the above it reflected that green company sales revenue is 2.7 Million and in red firm sales
is 3.4M and blue organisation is 2.6M. Further sales revenue of orange company is less as
compare to other firms that is 1.0M and Grey company sales revenue is near to green company
that is 2.7M.

Social factor: There are also some social factors which directly and indirectly impact sale of
blue company. Some of the aspects such as change in taste and preferences of customers after
some period. Due to this reason company need to modify its existing product so that needs and
demands of customer can be fulfilled (Reinhardt and et.al.,2017). The demand for the mobile
handsets in all the three markets is increases rapidly. There is increase in competition level due
to which blue company need to lower its prices. Taste and preference of customer changes with
the change of time so company need to conduct market research for analyzing the needs and
demand of customers. This assist them in increasing the satisfaction level of customers.
Technological factor: There are many new technologies which are introduced in market which
can be used by the firm for making innovative products and services. Global technology shares
blue company Tech 1 have 39.91%, Tech 2 have 13.21%, tech 3 have 33.06% and tech for have
13.82%. if company adopt new technology then it can easily make product different from its
competitor. Along with this it also assists them in gaining competitive advantage.
Legal factors: Legal factors also have some impact on the business firms. It is so because rules
and regulation made by government have can affect business negatively (Derbyshire and Wright,
2017.). It is compulsory for every organisation to follow rules and regulation made by
government in respect to carry out business legally.
Porters five force analysis:
Porters five force model can also be used for external analysis this consist of rivalry, threat of
new entrant etc. Likewise, pestle this model also assist in identifying the threat and opportunities
for the Blue company.

 Bargaining power of suppliers: Blue company supplier provide raw material for making
the products. Here, bargaining power of supplier is depended on the share of the firm
(Bakman and Hashai, 2017). If there is high market share then bargaining power is low of
supplier.

The above table it shows that globally market share of blue company is 18.79%, green
18.37%, Grey 21.31% and orange is 11.05 %. while red has highest number of market share that
is 30.47%. Market share of blue company in USA is 12.42%, in Europe it is 31.29% and in Asia
it is 17.26%. In different continent market share is different so the bargaining power is high at
USA and in Europe it is low and in Asia it is moderate. Threat of new entrants: Blue company possess strong position in market therefore it has
less threat of new entrants (Olmez and et.al., 2016.). It is operating its business globally
so it has less chance to be get impacted from new company. There are few cases in which
existing company may affected by the new firm entry. For instance, if new company
launch new product which is different from other companies' product. Threat of substitutes: There is less threat of substitutes for Blue company, it is so because
it is not easy to find substitute products. There is less chance of replacing smart phone as
it required higher investment and complex functionalities.
 bargaining power of buyers:Bargaining power of buyer is dependent on the features and
price of goods. Bargaining power of buyer increase if competitor sell same or less
different product as compare to other company goods. On the other hand, bargaining
power of buyer get lower if company sale different and innovative goods as compare to
its competitor
Illustration 1: Global market share

The above chart reflects that blue company price of product is increases as because of high price
of technology. In Asia, Blue company product price per technology is equal while in USA it is
higher than compare to Asia technology price. On the other hand, in Europe there is not much
difference in product price as compare to its price per technology.
Illustration 2: Product price per technology in Asia (RMB)
Illustration 3: Product price per technology in USA (USD)

Industry rivalry: There is strong competition between all the mobile phone who are selling their
products globally. There are some of the competitor of blue company which is operating their
business in same market that is green, orange and Grey company (Zhao and et.al., 2016).
Industry life cycle:
In industry’s life cycle, there are four stages which every industry has to go through for
accomplishing success. There are many new technologies which are become more obvious and it
extends risk of decreases making in the entry easier.
Stages in industry life cycle is as follows:
Startup stage: In this stage, it becomes difficult to ensure that firm will achieve success. There
are few companies which accomplish success and few cannot succeed (Moreno-Izquierdo and
et.al., 2016). Therefore, there is risk with the firm in the industry which is high in first stage of
industry life cycle.
Consolidate stage: At the time when product of the new firm makes good position in market
then their company need to struggle because of its competitor (Davidson and et.al., 2016.). The
performance of the industry is started tracking with the performance of the firms which survived.
Maturity stage: It is the stage at which company has to attained the full aptitude which is
consumed at this stage by the users. Therefore, growth achieved by any firm at this stage known
as the growth of the economy (Harun and et.al., 2016). This is the stage at which products get to
more standardized and firm can increase the price of its products.
Relative decline: it is the stage at which different features is determined such as sales volume,
prices, profit etc. Here, profit become more a challenge of production distribution efficiency
instead of enhancing sales (Bakman and Hashai, 2017) Further, at this stage competition is
increases due to which company may face problems.
Illustration 4: Product price per technology in eUROPE (EUR)