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The rapid economic development in China, India and other Asian countries coupled with the fact that their population cannot afford foreign products designed for the developed world has made these emerging nations a fertile ground for cell phone industries and other carrier players for developing and testing disruptive innovations affordable and good enough products that meet consumers’ basic needs at a lower cost (Christensen 1997). Developing disruptive products for such market offers tremendous opportunity to these companies to establish a strong foothold in emerging context (Hart & Christensen 2002).
Adoption of cell phone internationally normally result into economic growth for wireless countries with US made-phones penetration rate standing at a tune greater than 75%. Maturation of the cell phone industry will depend on carrier’s ability to sell their customers up for more expensive services and more advanced gadgets rather than new subscribers’ growth. Carriers wishing to expand have begun considering developing countries, though in the past they never considered doing business in these countries due to the low margins with the average revenue per user(ARPU) being $50.
Most developing countries have rolled out plans to develop wireless infrastructure as a means of communication, which is much cheaper, than investing on landline connections to every home. The governments in these developing countries have so far made a priority to develop wireless infrastructure as a primary means of communication. In some cases they have partnered with their citizen and major carriers to facilitate this development.
How companies are adjusting to cell phone maturation
Most head set and cell phone manufacturers have turned to the low-end of the market with phones that cost $100 and below since on average most of the people in developing countries fall in this bracket. They also offer numerous prepaid services and options to appeal to the cost conscious clientele.
The current trends in strategic cell phone management
Most companies and carriers have adopted some basic strategies in cell phone management in order to stay a float in the market. Since most of the wireless and carriers have now focused on the low-end of the economy, the following strategies have been put in place; Low-end mobile phones are long term investments but the prices and profit margins will be compressed. Mostly the carrier companies use low-end phones and multimedia handsets to lower prices of the two trends in parallel.
Mobile internet; mobile phones of late possess terminal equipment, operating system, mobile phone browser, software stores that include web services which become the main source of profit margin. Mobile video era; in this 3G era, mobile phone operation has moved from voice based to data based services. In this era, the large screen phone hardware is the main stream, where phones are clasified into smart phone grade standards, web chat, interconnection of photo framework, TV on the phone and video home monitoring. Also mobile video network has become the selling point (Article Base, 2010).
The mobile production line has been enriched by Physical network devices. The radio frequency identification (RFID), infrared sensors, global positioning systems and other information sensing capabilities of the device into the communication terminal have created complex terminal products.
New approach to help the company in the future in regards to maturation in the industry
Strategy formation will include performing situation analysis, self-evaluation and competitor analysis both internal and external, both micro and macro environmental factors, an analysis of the effectiveness of the strategies and conducting a SWOT analysis of the same to figure out the strengths, weaknesses, opportunities and threats (both internal and external). This can be done using the bottom-up approach.
The game plans in this industry’s rivalry can be undetermined and the capital and inputs can be constrained thus its imperative to identify the sectors that will permit the company to secure and maintain a sturdy posiition in the market, the company must adapt to change the mobility barriers as far as rivalry is concerned. Again proper determination of the time of entry into the market since consumers may be unclear in terms of demand, proper determination of leadership, liquidation and harvest strategies. (Ayres, Ayres, & Rade, 2003)
When the competitive advantage of the company will be found to be eroding, it will re-configure its value creation activities to regain its competitive edge. The company has to create alternative strategic approaches so as to stay competitive in scenarios where the competitors react to the company’s strategies and implement the strategy options.
The company should make the process of cost improvement, quality control, product and service innovation are under continuous improvement along side the brake down of organization buriers that exist between various departments , deleting hierarchies of management or making the flat, improving relationships with customers and suppliers, intelligent use of new technologies, improving human skill development and thorough global focus
How maturation of cell phone industry will impact on the business strategy in future
Given that the major carriers and stakeholders in the cell phone industry target the low-end of the economy with phones that cost $100 or below, the future strategies must include products that target this particular group. The intelligent cell phone popularity increases each year, future developments/ strategies must be put in place that considers the advancing technology in mobile telephony like the WIFI technology.
Given that the new strategies include products that target the low-end economy, this will involve the use of relatively cheap labor and materials, therefore the sales will exceed the cost of production resulting in comparative advantage. New and superior development in cell phone technology that incorporates the mobile video, 3G, WIFI and uniqueness in other terminal products will result in the products being superior to other products from other competitors and carriers (Cell Phone Digest, 2010).
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