Development of Global Mobile Phone Industry - Assignment Example

Introduction ‘A Ltd.’ is a large mobile phone producing company with most of its operations in Western Europe. It is the place where innovation of mobile phones has taken its leadership role. As such there is every need for the company to seek high penetration to saturation levels. Its rivals are also on the consolidating mode as the first time user levels have already been surpassed. The expected demand, as of now, would be from the demand for replacements which focus mainly on the value they offer. (Bock. D.S., 2005). This product falls in the segment of the consumer electronics which are reaching their maturity stage. To sustain demand in this already worked out areas, they need to upgrade their features and functionality periodically. Most of the expected demand could be from young professionals who need these gadgets as a daily requirement. At the same time, they also crave for exciting features like navigation keys, camera, touch control, web browsing, GPS etc. The company is on the thought of producing such new range of hi-tech mobile devices to capture demand. It is been observed that high-tech marketing is similar to traditional marketing in aspects such as price, product, place and promotion. However, its composition differs in terms of: Upgrading customers to novelty levels Efficiency of time management Co-operation with Research and Development department Changes in marketing conditions. The last three terms are supportive to the first term that the company should put in all efforts into work to attain agility and operational excellence. This is to ensure that a sale is not missed in this highly competitive market. A practical example in this direction is the cost of goodwill which Orange had to lose before Christmas because of its depleted stock reserves of Nokia 8210 which was featured in the film Charlie’s Angels. (Viardot. E., 2004). To avoid such disruption and also ensure fast sales on the other end, it is very important that the company has to analyze both on the internal (SWOT) and external fronts (PEST). As the external information can be very minimally controlled, the internal management has to adapt itself to complement the external environment and implement the required sales. For this, at the outset, both the analysis has to be taken into consideration. PEST Analysis for Mobile Industry: Political Factors: Laws which relate to privacy and personal information like information pertaining to a particular location etc. which have to be followed by the mobile companies. Conditions, availability and additional radio spectrum price for providers of wireless service. Law of competition which pertains to: Mergers which happen between providers of network and Mergers which happen between suppliers of network and content. Security and privacy laws can never be deterred. Similarly, availability of spectrum needs funding. The only thing with which they can play is that of pricing of their product. They should decide whether to offer plain vanilla combinations at floor price or a mixture of high-tech features at profitable price. Because of infrastructural needs in addition to security and spectrum, it is better to device plans to offer high-tech features mixture at profitable price. Economic factors: Exit or consolidation within the telecom sector. Charges of access. Economic growth rate and change in spending of consumers. Rates of interest. Credit availability. Inflation. Rates of exchange. Study of these economic factors will explain the producer whether the pricing he is trying to quote would be accessible to the consumer or not. For example, if there is high inflation, consumer spending tends to fall for luxuries and go up for necessities. Mobile is one service which is now slowly shifting into the necessity category. As such consumer spending mindset in this sector is robust till date. It has to be directed towards upgrading of their devices through aggressive marketing. Social factors: Popularity of social networking sites and its continuity. Leisure time availability in the general public. T.V. and video can be delivered on the move. Their demand has to be captured. Positive attitude towards mobile devices has to be developed. Adoption rate of new technology and services. Growth and acceptance of e-commerce on mobile phones. The value perception of mobile and fixed service in connection to its customer billing. The need to be with the modern developments in vogue to be socially acceptable is a very important factor for every person to be happy. Where the area is noted for leadership in mobile industry, rate of acceptance would naturally be high. However, shifting of the mindsets of the customers to adapt to better versions as against the basic ones is a tough task. Particularly where the perceptions are dependent on the value the product offers, highly reliable and convenient features have to be inscribed. They have to be pronounced through advertisements for the consumers to accept those novel features. Technological factors: Data speed increase on fixed cable and DSL networks. Data speed development over networks of mobile. Roll out and development of alternative data technology pertaining to mobile such as wimax and wifi. The capacity demand costs on networks. Increase of battery life so as to enable mobile devices which are sophisticated. Convenience in technological development should pave the way for fulfilling the requirements of novelty. (Friend. G & Zehle. S., 2009). One classic example of failure in spite of great technological advancement is that of Pogo phone which was released in 1996. It had a touch screen, finger operable with a stylus pen, providing functionalities of e-mail, telephone, games and music. However, lack of proper infrastructure, proved insufficient to run all the functionalities and thus was a failure. It resembles the smart phone in services and given technological advancement, as of date, it would have been successful if it were released in these times. So, going ahead of times could also be a setback. You need to take a serious look on the PEST factors and go with the market to be successful. (Leggett. R., Boer. W.D., & Janousek. S., 2006). SWOT Analysis: Strengths: The area in discussion is Western Europe where leadership in the industry means a strategic leadership globally. The strengths pertaining to this area are: Language and cultural diversity. Leadership in technology in mobiles, smart cards, protocol verifications. Penetration of mobile phones to the maximum extent. Commitment of the regulator. Single currency. Basic skills level widespread. To enjoy the maximum benefit, technological leadership has to be stressed upon. Strategically, it has to be aggressively aimed upon irrespective of huge financial gain. Even if it is merely above break even, it will enhance the good will of the organization. Weaknesses: The place lags in new technology uptake. Though it has leadership quantity wise, it is not leading as against United States where information gets passed super quickly. Thorough check of procedures by the regulator often results in slow decision-making which may be detrimental in this highly aggressive market. Due to distinguishing languages and cultures, adaptation for every market increases the investment cost. Every member state has to be obtained with 3G licenses which sometimes results in duplication of licenses for two states which are of the same language origin. Due to these high infrastructure requirements and duplication of licenses, most of the service providers have become debt laden. This can be solved only by forcing many customers to quickly take up 3G licenses. However, from the customer’s point of view previous disappointments are costing too much for the company to convince them of the future performance. The competition between 3G and Wlan services cannot be forgotten. While Wlan which provides for broadband access is somewhat complemented by difference service providers, 3G service providers tend to restrict their infrastructure for their personal use only. They do not complement each other. As such, there is an occurrence of high infrastructure expenditure with low results in the 3G sector. In short, procedures have to be speeded up by increasing the personnel or through standardization. At the same time, competing forces have to be transformed into complementary forces so that 3G services do not lose over Wlan. Delay in procedures and competition may jeopardize growth. After going through all the PEST factors and the strengths and weaknesses, one can arrive at the following opportunities for the industry: Opportunities: The requirements of legitimate privacy and security expectations in transactions results in better economic performance for the customers. As such, their confidence in these handsets may be reinstated. IT companies can collaborate with these mobile phone service providers and academic practitioners to allow focused research on the required breakthroughs. Various applications pertaining to payments through mobile, voting, ticketing, finance etc. which can increase the convenience of the customer can be developed easily. Thorough following of procedures by the regulator has resulted in single standards set in the case of 3G licenses which make it easier for the producers to follow. Very critically key researches and technology in the industry have been well connected. As such, the basic infrastructure developments are almost on the full. There is an availability of highly skilled labor which is ready for a set of research problems to be challenged when it comes to areas regarding privacy and security of mobiles. Quick information through connectivity, security and privacy are the important opportunities which have to be dwelled upon to produce successful handsets. Threats: Increase in the prices due to the involvement of high cost of infrastructure and other developmental activities. Challenges regarding to privacy and security have to be met successfully. If not, other players may snatch our customers away. On the other hand, research on the issues pertaining to solving certain problems may not be very progressive. These delays may cause disruptions in the demand for the future technologies of mobile industry. Differences in the 3G suppliers may result in fragmentation of solutions which may even be flawed to some extent. Unless knowledge is shared, the loopholes can never be found out thus making the handsets incompatible. The success mainly depends on the perceptions of the customer or the end user. These can be routed through ways: Defining interfaces for the service providers to adapt to the available handsets. Developing information content and communication services for the mobile service providers to enable content services. (Mitchell. C.J., 2004). All above developments demand high pricing for the gadgets which can prove to be an impediment in marketing them. An interesting case study is that of the success of Docomo’s (Japanese) I-mode’s success over European mobile companies. The Europeans attributed it to the PEST conditions prevalent in the Japanese economy. Later two other Japanese mobile companies namely KDDI and J-phone which operated in the same scenario of Docomo could not fetch such customer base. Then it was understood that Docomo had a unique strategy of understanding and adapting to the PEST conditions prevalent to produce those results. It used both strategy and technology to wade away the effects of PEST factors which its counterparts could not do. This is the magic of SWOT analysis which KDDI and J-phone could not achieve. (Fransman. M., 2002). To sum up all the above derived points: It is imperative for the company to take up high-tech marketing and supply according to consumer demands. Because of infrastructural needs in addition to security and spectrum, it is better to device plans to offer high-tech features mixture at profitable price. Consumer spending mindset has to be directed towards upgrading of their devices through aggressive marketing. Highly reliable and convenient products have to be marketed for improving value based perceptions. These have to be pronounced through advertisements. Technological developments should pave the way for fulfilling all abovementioned requirements. Strategic benefit through technological leadership has to be aimed upon for enhancing the goodwill of the organization. Delay in procedures and competition may jeopardize growth. Quick information through connectivity, security and privacy are the important opportunities which have to be dwelled upon to produce successful handsets. All above developments demand high pricing for the gadgets which can prove to be an impediment in marketing them. Hence, they have to be rightly priced. Current Scenario: The current trend in the mobile sales, in spite of an overall economic downturn, has not seen any decline in sales. In fact, it has inched up further with lots of younger generation pitching up for these gadgets. (Anon., 2009). In view of all above derived points, the company can take up the idea of producing and marketing high tech mobile devices. They have to be: Technologically high-tech. Reliable, Convenient and should include time saving features like payment accounts etc. Valuable perception wise to offer right novelty features. Aggressively advertised. Rightly priced. Provided at an impeccable speed so that no service provider can duplicate beforehand. Thus the company can ensure producing high-tech mobiles and marketing them successfully. This is on the supply side. However, the producer also needs to focus on the demand side. Things can change overnight. It is not feasible to take up field study every time. The best thing is to rely on some sources of information for further research in future. The Sources of Information: Recent publications on the topic Market research reports Industry portals Business magazines Newspaper editions Newsletters to executives Trade journal articles Internet Search and Day to day facts in around the local areas. In this way, strategic leadership can be gained which is very important for further releases also to be on the cards. The most important advantage to be gained is the shift in the consumer mindset by attracting their attention and fulfilling those promises. Conclusion: It has been observed that the consumer has surpassed the first time buying levels and is now on the look for value perspective in the mobile industry. As such, there is every need for the industry to upgrade to higher levels and offer new features to the consumers which are reliable, convenient and novel. Strategic leadership helps in maintaining continuance of the business even in the future. However, care should be taken that the demand has to be properly reciprocated with supply. For that, the industry has to train to high agility levels and marketing has to force the consumers to take up 3G devices. If not, there would be huge loss on the side of infrastructure. This company needs to produce high-tech devices and market them to sustain its position in the market. As such, it needs to conduct the required technological research and convince the customers. For future also, additional sources of information have to be regularly gone through to envisage, change and act accordingly. Book References: Anonymous. (2009). 2008-2009 Annual Report on the Development of Global Mobile Phone Industry. chinaccm.com. Last accessed: 11th Feb., 2009. Available at: http://www.chinaccm.com/4s/4s16/4s1605/news/20090422/173051.asp Bock. D.S. (2005). The Mobile Revolution: The Making of Mobile Services World Wide. U.K. Kogan Page. Ch. 1 - Globalization. Fransman. M. (2002). Telecoms In The Internet Age - From Boom To Bust …? U.K. Oxford University. Ch. 9. Friend. G. & Zehle. S. Analysing the Environment: Guide to Business Planning. U.K. Profile Books. Leggett. R., Boer. W.D. & Janousek. S., (2006). Mobile Devices: Foundation Flash Applications for Mobile Devices. U.K. Friends of ed. Mitchell. C.J. Pioneering Advanced Mobile Privacy and Security - Security for Mobility. U.K. IET. Viardot. E. (2004). Successful Marketing Strategies For High-Tech Firms, U.K. Artech House. Read More