Industry Analysis: The Mobile Phone Industry Strategy and International Business
SWOT - Strengths • High barriers to entry • Number of subscribers is growing • Good service offered – high range of price plans and tariffs. 98% to 99% coverage.
Weaknesses • Low customer retention. • Lack of ‘effective’ competition. • Market reaching saturation point?
Opportunities • The primaryuse of mobiles is now for mobile to mobile calls. • 3rd Generation technologies-. • WAP and internet technologies. • New phones. • Number porting and SIM unlocking(to try and keep current subscribers).
Threats • Abuse of market power. • New legislation. • The 3rd Generation (3G)-. • Lack of immediate profits. • New companies. • Further health scares.
5 Force Analysis – Threat of New Entrants Low: • New entrants need a license to operate. • Profits reported to dip sharply soon. • Cost of entry determined by Gov.
Buyer Bargaining Power High: • Customers can choose provider at own will. • Can switch easily. • High price sensitivity.
Supplier Bargaining Power Low: • Dependence on mobile providers. • License needs.
Threat Of Substitutes Average: • Few actual substitutes. • Falling prices and high value added products represent growing threat.
Competitive Rivalry Very High: • One of the main forces within the industry. • Deregulation, legislation and globalisation will increase further.
PEST - Political • Oftel report on mobile phone call charges • Government legislation on mobile phone masts
Economic • License fees • Moving towards market saturation • Trend towards mergers and acquisitions • Rising incomes
Social • Health risks • Location of phone masts • Customer choice • Redundancies
Technological • 3G technology development • Economies of scale in development of handsets and networks
In Conclusion… • Value added of key importance. • The success of 3G. • Outcome of reports into call prices.