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Industry Analysis - Essay Example

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Over the next three years, the cell phone industry will face many changing forces, because by nature, this high tech industry is very dynamic and competitive. Strategic and decision making models in the cell phone industry are complicated. The impact from the general industry…
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Industry Analysis
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Industry Analysis

Download file to see previous pages... This resulted in the concept of charging callers for outbound calls and also for receiving calls:” (Mobile, 2008). In the US, a lot of cell phone companies are still able to charge for receiving calls, whereas in Europe this has changed somewhat: this shows that strategy formulation has to change in this global industry. “While some systems of payment are pay-as-you-go where conversation time is purchased and added to a phone unit via an Internet account or in shops or ATMs, other systems are more traditional ones where bills are paid by regular intervals. Pay as you go (also known as "pre-pay") accounts were invented simultaneously in Portugal and Italy” (Mobile, 2008). Pre-pay accounts are currently a major draw in the US, and there is a lot of competition to offer the best service with the most options and coverage. Competition is a force in the general environment, and it is likely the force that is going to impact companies within this industry the most, as it continues to change and grow in the next few years. “The nature and degree of competition in an industry hinge on five forces: the threat of new entrants, the bargaining power of customers, the bargaining power of suppliers, the threat of substitute products, and the jockeying among current contestants” (Ireland et al., 2006). In this industry, even though barrier costs are high, substitute products are a real threat.
From the team perspective, the task environment of the cell phone industry is affected by many internal, as well as external, forces. In terms of the relationship of suppliers, “If a supplier can either increase the price of its product or reduce the quality
2006). This rule holds true for the cell phone industry as well. There is also a particularly strong domestic market in the US with strong and sustained growth. “Consumer mobile phone sales in the United States ...Download file to see next pagesRead More
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