Quality Communications's Struggle to Final Destination - Research Paper Example

The company nowadays has an extensive portfolio not just in the United States of America, but the company has over 195 patent agreements around the world. This makes Qualcomm the best and the largest company in the communication sector. The company has also been very active in the growth of 3G and other wireless communication developments. Among various other development, the company has developed several modern technologies in the industry including CDMA technology, 3G technology, and QUALCOMM Enterprises Services (QES). QUALCOMM is also helping governments around the world in setting up effective communication solutions. QUALCOMM has also started QUALCOMM licensing service though which every new development that QUALCOMM makes is licensed to companies around the world so that this development is not concentrated to just one part of the world, but it spreads throughout the world evenly. (Qualcomm’s Official Website, 2011)

Qualcomm is threatened quite badly by the large number of lawsuits that were filed against the company. Everyone these days seem to file lawsuits against the company. From the handset makers to cellular networks, everyone has given their own share of problems to the communication industry giant, QUALCOMM. These lawsuits range from antitrust law violations to licensing agreements. All of this could have created a mess if it was not QUALCOMM. It is one company that is spending a huge sum on its team of defense attorneys. Hence, the company can fight it out by having out-of-the-court deals with the companies who have filed these lawsuits, or else they can go with them hard in the court of law. In any case, QUALCOMM does not have too much to worry about and this problem is going to be handled more than effectively by the team of lawyers that are on QUALCOMM’s payroll. This problem also stemmed from the sharp growth of the communication industry in the last decade. This irregular resulted in a lot of problems and lawsuits for QUALCOMM. However, QUALCOMM is in a great position to come out of this problem as they have a great team of attorneys to defend the company’s position. (Sidener, 2009)

Another problem with QUALCOMM is its declining margin. In the latest quarter ending June 26, 2011, QUALCOMM's operating profit margin was 30 percent. This was a decline of 3 percent from the quarter previous year. This shows that the operating expenses of QUALCOMM are rising faster than its revenues. This has caused the problem of declining QUALCOMM’s profitability. The scrutiny of financial statements reveals that this decline in profitability as a result of increasing cost of equipment and servicing costs. QUALCOMM can improve its position by moving towards more efficient operations. They should try to reduce the costs by as much as possible and should try to increase their revenues. This can be done by increasing the cost control methods and hiring operation managers at each cost center. They should inspect the factors that are leading to wastage and should try to eliminate them so that the next quarter’s financial statements are more profitable and more ostentatious. (Qualcomm’s Income Statement, 2011)

QUALCOMM operates in industry and is facing a high level of competition. It is reported that there are around 21 companies that provide competition to QUALCOMM directly or indirectly. This is a lot of competition. As a result of such heavy competition, QUALCOMM cannot operate independently in the market. All of its decisions have to e made keeping in mind what actions will the competitors take to counter QUALCOMM’s efforts. The problem is rooted in the industry QUALCOMM is operating in. This industry is a monopolistically competitive industry. The company cannot charge whatever price it wants to charge its competitors. Instead, the company is a price taker and has to take into account the actions of its competitors before making a final decision. This is also one of the toughest markets structures to operate in. However, QUALCOMM can improve its position in the market by focusing on product development. This way QUALCOMM can leverage its position in the market and sooner or later it won’t be affected by the competitor’s actions (Lipsey and Chrystal, 2004). QUALCOMM can also achieve this position by focusing more on product differentiation. It should produce distinctive products and should position them in a way that would hedge its position against the competitors. This will involve things like heavy branding and market position. However, the end result of such strategies for QUALCOMM would be fruitful and they would be able to enjoy a good position in the market, if not the best. (Yahoo Finance, 2011)

In the end, it can be concluded that QUALCOMM is a result of a dream. This dream is close to its realization, but the organization will have to work harder to reach its final destination. It may seem a tough task, but it is not. The reason why it seems a difficult task is because of several obstacles that are in between QUALCOMM and its final destination. These obstacles exist in the form of lawsuits against the company, declining profit margins, and heavy competition in the industry. However, these problems can easily be solved if QUALCOMM develops an effective plan of reaching its destination. Careful planning will involve branding the product, improving products, and position the product distinctively against heavy competition in the market. All of this will ensure that QUALCOMM does well in the market.