Eco-Fone: UK Mobile Phone Market Analysis, Expansion and Costs Report

This report provides a comprehensive analysis of the UK mobile phone market, focusing on the Eco-Fone company. It begins with an introduction to the importance of technology in the smartphone market and sets the context for the report, highlighting the company's operations in Putney and Richmond. The report delves into the UK mobile phone market, examining market share, future predictions, and the potential for growth among aged customers. It then assesses the feasibility of expanding Eco-Fone's business operations, including a cost analysis for a new building and a comparison of net takings between two shops. Customer satisfaction and quality procedures are also evaluated, alongside financial aspects like calculating monthly costs and loan details. The report concludes with insights into market trends, consumer behavior, and the company's strategic expansion possibilities, providing a well-rounded view of Eco-Fone's position and prospects in the UK mobile market. It offers a detailed overview of the market dynamics, financial considerations, and strategic recommendations for Eco-Fone's future growth.

-------------------------------------------------------
REPORT FOR ECO-FONE
1

Table of Contents
2

INTRODUCTION
Technology play very essential role in the current market which provides the rapid
growth in the current market (Anderson, 2012). These changes influence the smartphone market
which generates the pressure on mobile companies to adopt these changes and modify their
strategies accordingly. This report is based on Eco– Fone Company which deals in smartphones
sector. It manufactures smartphones and related accessories which located in Putney and
Richmond. Main purpose is to identify the growth in the UK's mobile phone market. It cover
various topics such as challenges, opportunities, issues regarding product quality in Eco -Fone
company and they need to discussed regarding customer satisfaction and how they maximise
their product demand in the market. Along with this, they should evaluate that company able to
expand their operations in the UK market and identify the possible opportunities as well as
threats which can become barrier for the mobile phone company.
3

1.1 Overview of UK's Mobile phone market
According to the Deloitte report 2017, which is based on consumer survey and it help the
Eco-Fone company to identify the UK market in context of mobile sector. It represents the
usages of smart phones will continuously grow. Sales of mobile phones increased by 1.5 million
in 2016 to 2017 and most of the populations are adults who use smartphones around 58% which
has chances to increase up to 90% by 2020. Use of mobile rapidly increases because they
provide various mobile applications which help the consumers in their daily life. Along with this,
mobile phone companies innovate new features attract new consumers or provide various
facilities which make their personal as well as professional life more easy. According to this
study, approx. 32 million people use mobile phone for their professional work. So this industry
has huge demand in the future (Asgharzadeh, Bakouch and Esmaeili, 2013). They provide
various facilities such as calling, email, calendar, documents, messaging, internet excess etc. It
also provides the entertainment mobile applications such as Videos, Games, movie player etc.
Smartphone companies are growing industry which captures the market through providing
various attractive features which make individual more easily. In order to maximise phone
demand in the market, manufacturers have to analyse market and identify the requirement of
consumers which provide them great opportunity to grow.
4

Above mention graph represent market share price of smartphone vendors in the UK
from the duration of 2010 to 2019. Apple is one of the fast growing company which is very
popular in UK market. Introducing new features or range of variety will Samsung company to
get huge success throughout the years. After 2011, RIM company face decline in market share
which impact overall demand of goods, productivity or profitability. It is also observed that,
Apple of Samsung companies will take over entire UK market share in mobile phone sector.
5

1.2 Future prediction of use of Smartphone by UK adults
2011 2012 2013 2014 2015 2016 2017 2018
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
52%
62%
70%
76%
81% 85%
Sale of mobile phones
Above mention scatter chart shows the trend of mobile phone usage is continuous
increases during the period of 2012 to 2017. Mostly old age people are more addicted of
smartphones. In current business market, around 91% individuals are using mobile phones and 3
% people claim that they use their cell phone more than 3 months ago. Remaining audience use
smartphone one month ago.
As per the Deloitte report of 2017, there are around 17% of adult’s population using
smartphones approx. 100 times in a day and they are related to the 16 to 75 years age group. In
addition, 34% propel declared as addicted of using mobile phones and they are belongs to the
age group of 16 to 75 and around 12% adult use more than 200 times mobile in a single day.
This report also said that, those people who are addicted they use mobile phones everywhere
such as at the time of studies, eating, social gathering etc.
Above chart shows that use of mobile phones increase from 2018 to 2019 but linear chart
unable to represent the accurate information and comparison. After certain points, chart unable to
show the difference between the usages of mobile phones.
6

1.3 Potential market for aged customers in the area of Smartphones
In the current market, use of mobile phones increases according to the age of people
because older generation have capacity to adopt changes very fast. As per the survey of Deloitte
2017, it indicate that more than 71% people have their personal mobile and they are comes under
the age of 55 to 75 years. Along with this, around 20% old people said that they check their
mobile around 15 times in a day.
As per the study of Deloitte, people of 55 to 75 years age group who are wealthy they
purchase premium class smartphones for their use which also indicate there status as well.
Mostly people use mobile phones due to important applications which help the people to pay off
their bill online without visit the office because online payment is time saver as well as simple
process which can be done any time or anywhere (Battaglini and et.al., 2012). Mostly older
people take advantage because of their unique features. There are some unique features which
generate the demand in the market are mentioned below:
 Smartphones have large screen which is beneficial for old generation because they low
eye sites and easy to operate phones.
 With the help of mobile phones consumers can done various activities online such as pay
their bills, recharge etc. It will save the time as well as efforts of people.
 Phones also provide the security options such as face recognize on screen lock because ot
is also used for office work as well.
1.4 Practicability of expanding business operations in Kingston by using Pros and Cons table
In order to expand their business operations in the international market is such as big as
well as essential decision because company required to done intense research. Along with this,
they required huge investment in order to perform their operational activities to make their
product stable in the new market. Eco-Fone current operated in two locations such as Borough of
Richmond or they wanted to expand in Kingston. On the basis of collected evidence, Eco-Fone is
growing organization (Curado, Gazeau and Rodrigues, 2012). So they have opportunity to
expand their product across the borders and they need to perform effectively in their operations
which maximise the productivity as well as profit margin.
7

Eco-Fone select the UK for the expansion of the company and it include some pros &
cons which identify by the company at the time of expansion which mentioned below:
According to the above table of pros and cons, Eco-Fone has strong opportunity to
expand in Kingston which generate high revenue, create brand value, strong customer base, learn
new culture etc. Expansion of the market provide opportunity but they also provide the
challenges as well such as risk related to currency, cultural barriers, shortage of cash flow etc.
On the other hand, pros are higher than cons so Eco-Fone can expand their product in the
international market.
8

1.5 Calculate the costs of a New Building
(a) Calculate Equal Monthly Cost
Eco-Fone decided to expand their operations in the new market which required highly
appropriate sites. Company paying their EMI reduce the financial burden and maintain flexibility
as well as affordability which make the able to sustain in the market for longer period. Overall
cost of new building mentioned in the appendix section of this report:
Loan amount of £ 350000 for next 15 years.
Loan value = £ 350000
Interest rate = 7 %
duration = 15 years
EMI of each month= £ 3127.65
Total payable interest = £ 212977
Total payment = £ 562977
Eco-Fone decided to purchase land in comparison to taking lease because cost of
property is £ 4,00,000. So they decided to take mortgage loan where they get the nominal
amount of £ 3,50,000. Which they have to re-pay in next fifteen years at the rate of 7% per
annum. They decided to pay on Equal Monthly Installation (EMI) basis for next 180 months.
(b) There are some popular Mortgage lenders of the UK's market.
 NatWest
 Think business loan
 Royal bank of Scotland
9

 Alliance & Leicester PLC
 Principality
 Bank of Ireland
 Together Commercial Mortgages
10

 HSBC – UK Mortgage Lenders
11

1.6 Experiment the Manageable Difference in Net Takings of Two Shops
Eco-Fone has two stores in the location of Putney & Richmond location where daily net
taking of the company should determine in order to identify that which shop is high revenue
generated comparison to other (Understanding acceptance decisions and identity associated with
Luen and Stark, 2012). Company offer various range of mobile phone and accessories for the
monthly basis. Following information mentioned below in the tabular form:
Particulars First shop (Putney) Second shop (Richmond)
Mean £100 £90
Standard deviation £20 £40
Coefficient of variation
= standard deviation / mean *
100
= 20 / 100 *100
= 20 %
= 40 / 90 *100
= 44.44 %
It is has been interpreted with the help of above mention table where total observation of
Putney shop is 40 net taking and its average around 100 or standard deviation is 20. For another
shop mean is 90 and standard deviation is 40 for the same sample size base. In concludes, net
sales of Putney is higher than the Richmond (Faisal Ahammad and Glaister, 2018). Standard
deviation of both shops are different so Richmond shop should increase their sales and they
required to decrease variability which increases total sales as well as net taking of the business.
From the above calculation it has been concluded that, second shop that is Richmond
selected for the expansion because it is highly efficient in comparison to Putney shop.
Coefficient of variation of Putney is 20% and 44.44% of Richmond shop. Higher one is selected
for the better results or comparison.
12