Business Analysis Mobile Phone

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BUSINESS ANALYSIS
09BSP025
ANDY LIM
A916051

Contents
Introduction4
Industry overview4
P.E.S.T.E. Analysis5
Economic5
GDP5
Figure 1: Annual GDP Growth (1)5
Figure 2: Annual GDP Growth (2)6
Household Consumption6
Figure 3: Household Consumption Growth6
Figure 4: Contributions to Household Consumption Growth7
DPI7
Unemployment8
Figure 6: UK’s Unemployment Rate8
Replacement Cycles9
SIM-only Deals9
Social10
Internet10
Table 1: Mobile Content Consumption10
Information society11
Fashion11
Age11
Broadband12
Bundling Mobile12
Seasonal effect12
Technological drivers13
Table 2: Development of mobile phone13
Convergence13
Software14
Battery14
Political16
Health16
Crime16
Environmental17
Reduction of Hazardous Substances17
Graph 1: Breakdown of Materials Used in a Typical Mobile Phone, by Volume17
Universal Cell Phone Chargers18
Porter’s 5 Forces Analysis20
Degree of rivalry20
Bargaining Power of Suppliers22
Table 3: List of principal components22
Buyers Power25
Power of New Entrants27
Threat of Substitutes30
Conclusion31
References33

Introduction
The purpose of this report is to analyse the mobile handset manufacturer industry in the UK. The reason why I choose to analyse this particular industry is because mobile handset industry has experience significant growth over the recent years. Mobile handset manufacturers are innovating faster than ever, resulting in more and more high value and sophisticated handsets being produced. Despite the recession, there are reports showing positive growth within the mobile handset industry. This has led to my interest in analysing further into the industry. The companies that will be analysed will mainly constitute by the leading players in the industry, such as Nokia, Samsung, LG Electronics, Sony Ericsson, Samsung, Apple, and Research-in-Motion. This report consists of two main analyses, which are P.E.S.T.E. Analysis and Porter’s 5 Forces Analysis. P.E.S.T.E. represents Political, Economical, Social, Technological, and Environmental factors, while Porter’s 5 Forces analysis will be based on Intensity of Rivalry, Bargaining Power of Suppliers, Bargaining Power of Buyers, Threat of New Entrants, and Threat of Substitutes. Industry overview

The mobile handset industry has seen significant growth over the last decade and has benefited from further robust growth in recent years. The global handset market has more than doubled in six short years, reaching 974.7 million handset volume sales in 2006 (McQueen, 2008). In 2003, the mobile phone industry contributed £22 billion to UK GDP, which is 2.2% of the UK’s total economic output (o2, 2004). Technological innovation in mobile handset industry has led the industry into a change in nature of mobile handsets. Other than communication, mobile handset today provides more features such as internet browsing, music players, built-in cameras, video recorder, and more. Furthermore, the mobile handset industry is highly competitive.

P.E.S.T.E. Analysis
Economic
GDP
UK’s economy has been declining since 2006. Due to the recession, UK’s GDP growth has declined dramatically in 2008, and has fallen into negative level in 2009 (See Figure 1). According to the latest statistics (See Figure 2), the UK economy has experienced positive growth of 0.4% in the final quarter of 2009, since the first quarter of 2008 where the decline trend began. Although UK’s GDP has seen a positive growth after six successive quarters of contraction, this was not sufficient to prevent an overall annual fall of 4.9% in 2009. However, the quarter on quarter growth rate of GDP has steadily improved throughout the year. The positive growth has seen to continue as UK’s GDP has increased 0.2% in the first quarter of 2010.

Figure 1: Annual GDP Growth (1) [Source: Quarterly National Accounts]

Figure 2: Annual GDP Growth (2) [Source: Quarterly...
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