QUALCOMM Incorporation was incorporated in 1985. It manufactures and markets digital wireless telecommunications facilities and products. These products and services are based upon code division multiple access (CDMA) technology. This company is listed in the Fortune’s List of top 100 companies, which have the best environment to perform work. It has almost 20,000 employees. There are four segments, in which company is operating:
1- QCT (Qualcomm CDMA technology)
2- QTL (Qualcomm Technology Licensing)
3- QWI (Qualcomm Wireless and Internet)
4- QSI (Qualcomm Strategic Initiatives)
2- Porter’s Five Forces of Qualcomm
2.1- Threat of Suppliers
I. For the purpose of manufacturing, assembling and the testing of their products, Qualcomm depends upon its suppliers. Some of these suppliers are sole vendors in the market. II. Licensees and designers of Qualcomm are Intel, Motorola, LG, Nortel, Philips and Samsung. These companies/ Licensees are also the buyers of the Qualcomm technology. These companies can harm the image and growth of Qualcomm, if they move toward other network for services. III. Omnitracs, Truckmail and Omniexpress are the satellite system providers for the company. If the transponder (device which receives signals) capacity is low, they can harm the business and growth of the company.
2.2- Threat of Buyers
I. It has a huge number of buyers in entertainment, transportation and communication industries. 39% of the company’s revenue is generated from its buyers Samsung, LG and Hyundai. Buyers have a vast variety like Intel, IBM and Nokia etc., upon which they can switch. II. Qualcomm needs to increase its buyers, because if it loses any one of the major three buyers, it would have to suffer a lot.
2.3- Industry Rivals
I. There are many rivals in the industry like IBM, Intel, Acer, Nokia etc. These rivals have stronger relationship with customers and suppliers etc. So, the competition in the market is very high, and its competitors have sound position in the market. II. These competitors have the ability to develop alliances, which can have an effect upon the buyer’s decision that whether they should buy from Qualcomm or not. This can be dangerous for the growth of Qualcomm.
2.4- Threat of New Entrants
I. New entrants are providing their terrestrial products at lower prices. II. These terrestrial based products can offer their products in other markets, too. III. Another threat of new entrant is telephone companies; they have ability to come in the market with 3G technology, which can have an adverse impact upon the growth of Qualcomm.
2.5- Threat of Substitute-
There are the following substitutes for the Qualcomm:
I. New satellite system- this is a system which is connected to satellite rather than to terrestrial cells. They provide the function which a cell performs with low band width internet. II. Latest GSM technology for 3G Network
III. Latest land based technology can be used as a substitute for CDMA technology; it can also be used as a substitute for other wireless technologies.
1- Threat of Buyers| High|
2- Threat of Suppliers| High|
3- Threat of Industry Rivals| High|
4- Threat of New Entrants| Medium/High|
5- Threat of Substitute| Medium/High|
From above table, it is concluded that company is working in a highly competitive/ threatened environment. Company is facing huge challenges, and there is a need to sort out these critical challenges.
3- STRATEGIES DEVELOPED BY QUALCOMM
The current marketing strategies of Qualcomm are:
1- They have a huge dependence upon Asian Region for their revenue. They are operating most of their operation in Korea and some other Asian regions, because they think that the demand of their product is more in these regions, as they have low prices as...