Strategic Analysis at Business and Sector Level of Mobile Phone Business

In most parts of the world, mobile phones have been transformed as tools of entertainment, communication, and search engines among many more. The mobile phone appears to be offering the industry with promising growth rates. But, competition continues to emerge from different types of companies, the large multinational corporations and the small market players whose only aim is to assemble and sell the end product. Furthermore, the inflow of less costly and durable products from China poses a threat to any industry in the modern business world (Giachetti, Lampel, and Pira 2017). The mobile phone business is not an exception. However, companies, customers and the government are at odds on how the industry should develop. Political factors The influence of political factors on the mobile phone industry may either be beneficial or restrictive.

The political climate of a country may impact the laws that govern corporate spending or the tariffs issued on goods and services. For example, issues that relate to regulation often come up. While the government has an idea about how telecommunications need to be handled, the people have another. However, the growth of the industry relies on customers and advancements being made in technology. Most businesses today rely on mobile phones and the internet for marketing. The phone industry has also facilitated the recruitment of representatives to solve various problems through live chats. Therefore, there is a rapid growth in the need of things to be available and accessible all the time. Social Factors There is a limit to the horizontal growth of the telecommunications sector.

Legal Factors Some of the legal factors that influence the mobile phone business include monopolies, the government and customers. However, the telecommunications sector has enabled the importation and exportation of telecommunications products thus steering development in the mobile phones business. Environmental Factors The mobile phone business is often impacted by environmental factors such as global warming and changes in the climate. Such factors tend to impact how products are distributed to users (Mpwanya and Van Heerden 2016). Also, in relation to employment, employees are required to adapt to the various technological changes. Some markets such as the United Kingdom pose barriers to entry in relation to mobile phone operators who have to vet and control new entrants in the market. Also, the fall of more sophisticated handsets will make mobile phone manufacturers experience a reduction in their profits.

Opportunities First of all, the mobile phone industry is subject to innovations and has the capacity to make new mobile handsets. This provide an opportunity to incorporate new technologies to facilitate the process of purchasing from the customers. Secondly, it is evident that the use of mobile phone is still on the rise (Dewan and Chen 2005). Also, it is very expensive to compete in the mobile phone market due to high manufacturing costs including research and development. The presence of sophisticated technology has also made it impossible for new players to enter the market since they need to develop the technologies before they can rival effectively. Threat of substitutes There has been a lot of ongoing research and development in the mobile phone technology.

Most operators seem to be upgrading their networks to more advanced third generation networks like 3G. Also, the development of contracted portable storage devices has solved the storage issues. Most mobile phone companies are creating mergers which results in concentrated pricing power in the brands of those few companies (Hess and Coe 2006). The merger of a company with another increases the total savings of the company. But, this undermines competition. Strategic Group Analysis Understanding competition Major advancements in mobile phone technology has increased competition in the industry. Most companies are introducing new designs and upgrades to their products increasing competition in the emerging market. This is because, technology advancements have introduced new designs of mobile phones that are easily portable and therefore can be moved from one place to another with ease.