Sample Case Study On Strategic Managementl Mobile Phone Industry Case

The mobile phone industry is much less concentrated today than it was in 2005. Does this make the industry more or less competitive? Why or why not?
The mobile phone industry has become extremely competitive. In 2005, there were few companies producing mobile phones. This means that the competition was only limited to a small number of companies thus the industry was less competitive. The introduction of new mobile phones from new companies has provided buyers with a wider selection of choices. This has increased competition in the sense that, companies are forced to develop mobile products that will attract buyers at reduced prices. The cost of buying mobile phones was much higher than it is in now. The mobile phone industry has become larger, resulting to an increase in the number of affordable phones. Furthermore, the market has become increasingly competitive because the increase in companies has resulted to an increase in companies offering similar products and services but with the mobile phones having diverse physical features and costs. In an industry where the concentration is less, competition takes the form of price reduction. However, price reduction only lasts for a short time, as rival firms will also respond by reducing the mobile price handsets.
What was the basis of competition in the mobile phone industry in 2005?(E.g., how did firms compete?). What is the basis of competition in 2012? What caused the change?
In 2005, there were only a few firms in the mobile phone business. This then had the effect of a more concentrated industry that made competition decrease. Of the few companies, what set them apart was the brand image. By 2005, Nokia had set itself as a world leader in the provision of mobile phone handsets. Their quality was higher as more of their products lasted longer. Nokia handsets were much more affordable than other mobile phones. Other firms could not have the ability to reduce prices, as this would only lead to losses. Additionally, consumers preferred Nokia to most other mobile handsets. Furthermore, one can argue that Nokia had distribution network that was efficient in the world than those of other companies such as Motorola and LG, thus was able to have a larger market share.
In 2012, the basis of competition shifted to physical attributes of products. This implies that price reductions have had a little effect on competition. Because of the increase in saturation of the market, a reduction in price of the mobile phone by one company would also mean that all other companies would reduce their prices and competition would not change much. However, new design features and capabilities of phones and the increase in popularity of Smartphone is a major factor in the competition, in the mobile phone industry as of 2012. Samsung is a major Smartphone producer, with its product being widely purchased by consumers. The change in competition between 2005 and 2012 is because of the improvement in technology, which allows a single phone to have an abundance of features such as emailing and internet. Another feature that has increased competition is the inclusion of design features such as camera. Smartphones with cameras increase the likelihood of a phone being purchased by a consumer; thus, the mobile phone manufacturers engage in developing phones with unique quality camera specs at affordable prices to attract consumers. Additionally, the ability of mobile phones to have unique features such as 3G network technology also affects the consumer’s preference. This has influenced the development of mobile phones.
How did mobile phone handset manufacturers make money in 2005?(E.g., what were their revenue sources?). How do the manufacturers make money in 2013?
In 2005, a firm such as Nokia had the highest market share. By then Nokia had many handsets devices. This enabled it to generate high revenues. Furthermore, other companies also made profits from the sale of handsets. Additionally, Nokia is also involved in the manufacture of mobile communication devices. In addition, this was a possible source of revenue, in 2005. For a company such as Samsung, sources of revenue included sale of its other products such as television sets. The same applies for LG, which also deals in the manufacture of television sets and video equipment. In 2013, a manufacturer such as Samsung is involved in the development of mobile device accessories such as memory and tablets. Additionally, since the introduction of the Samsung Smartphones in 2009, the revenue generation has gone up. Most of the revenues are being generated from the Smartphones.
What is the role of the cellular network providers in the development of the mobile phone handset industry? How does the North American model differ from that in the rest of the world?
Cellular networks offer an avenue for the sale of high number mobile handsets. They create a utility through which people can communicate easily and conveniently. This increases the demand for mobile handsets by making them a necessity to everyday life. This increase in demand further causes a need for improvement in the quality and specifications of the handsets. This calls for the mobile handset industry to look for new ways and means of creating client interest through inclusion of improved technology in the handsets. Furthermore, they collaborate with the mobile handset industry to provide an affordable avenue for purchase of these handsets since the cellular networks have client loyalty. Additionally, cellular networks are providing services such as 3G networks and wireless services at subsidized costs, which encourage the consumer to purchase mobile phones that have such attributes.
In North America, the most common standard in use for cellular service is the CDMA (Code Division Multiple Access while the rest of the world mainly uses GSM (Global System for Mobile Communications).
Nokia fell from dominant market share in 2005 to an industry also ran in 2013 and is now being sold to Microsoft? How do you explain the rapid shift in Nokia’s market position and influence?
Nokia was much focused in the production and manufacture of standard phones. However, the increase in technology and shifts in tastes and preferences of consumers have resulted in other companies such as Apple developing Smartphones. The rapid acceptance and improved design features in Smartphones have resulted to an increased percentage of consumers shifting the preferences to Smartphones. Currently, the biggest Smartphone manufacturers in terms of sales are Samsung and Apple. With the recent acquisition of Nokia by Microsoft, there has been an increase in the development of Nokia Lumia series Smartphones. Therefore, the increased focused in design and production of high-end smart phones, the market share of Nokia has a chance of improving.