GlobalMobilePhoneIndustryAnalysis

GlobalMobilePhoneIndustryComparativeAnalysis:Vs.KeithConly10/13/10GlobalMobilePhonesComparativeIndustryAnalysis:Page1of47Outline:I.ExecutiveSummary______________________________[2]II.IndustryAnalysisa.IndustryCharacteristics___________________________________[3]i.IndustrySizeii.MarketShareofTopCompetitorsiii.CompetitiveDynamicsoftheIndustryb.Porter’sFiveForcesIndustryAnalysis_______________________[9]i.PotentialEntrantsii.Substitutesiii.Buyersiv.Rivalryc.StrategicGroupAnalysis_________________________________[16]i.StrategicMapii.AnalysisofScaleandScopeIII.StrategicComparisonofTwoFirmsa.Missions,Culture,StrategyandOrganizationalStructure_______[18]i.MissionStatements,Culture,andValuesii.FirmStrategiesiii.OrganizationStructureb.FinancialAnalysis______________________________________[29]i.KeyRatiosii.DriversofCostAdvantages/Disadvantagesiii.FinancialPositioningc.CompetitiveAdvantage__________________________________[37]i.StrategicFitii.ValueChainiii.CompetitiveAdvantageSustainabilityiv.NextFiveYearsGlobalMobilePhonesComparativeIndustryAnalysis:Page2of47ExecutiveSummary:Themobilephoneindustryasawholeisaoneofthefastestgrowingindustriesintheworldandexpandinggloballyrapidlyasdevelopingcountriesemerge.Cellphoneshavegonethroughmajorchangessincetheirintroductionin1994,areconstantlyevolvingtomeetcustomerexpectations.InJanuary2009thetotalnumberofmobilephonesubscriptionsintheworldreachedover4billion.Worldwide,salestoendusersinfirstquarterof2010totaledover314millionunitsrecordinga17%surgecomparedtothesameperiodin2009fromarecentGartnerreport.Thisgrowthwasmajorlydrivenbydouble-digitgrowthofsmartphonesalesinmorematuremarkets.Accordingtoarecentanalysis,IDChaspredictedthat“thesalesofcellphonesaregoingtogrowbyanadditional11%–12%inthecomingfewyear(s).”ConcerningPorter’sFiveForces,buyerpowerismoderate/low,supplierpowerismoderate/low,threatofnewentrantsislow,substitutesarelow,andrivalryishigh.Theglobalmobilephoneindustryisbestdefinedbyoverallmarketshareandpricebaseduponproducttype.Theindustrycanbefurtherdefinedintothreedifferentsegments:low-end,middle,andhigh-end.Intheglobalmobileindustry,scaleandmarketshareareeverything.Theabilitytoexpandgloballyiscrucialasemergingmarketsariseandnewpotentialcustomerscomeforth.However,itisstillpossibletobeprofitableinthemarketwithoutexpandingrapidlyagainstfiercecompetitionbycreatingyourniche.Samsunghasuphelditsmissionstatementthatrespondsbothtoitsownchange,andtonewdevelopmentsintheworld.Samsung’smanagementphilosophyrepresentsstrongdeterminationtocontributedirectlytotheprosperityofpeopleallovertheworld.Motorola'shistoryismarredbymarketingmissteps.Motorola'sploddingcultureiscontributedtoitsinabilitytodelivernewphonestomarketasquicklyascompetitorsandfurthermorehinderingitscompetitivestrategy.ReturnonAssets,AgeofInventory,andR&Dasa%ofsaleswerechosenforfinancialanalysis.SamsungisaboveIndustryaveragesinROAandR&Dasa%ofsalesshowingthecompany’scommitmenttoinnovationandtechnologyasacompetitiveadvantagefortheIndustry.Motorola’sAgeofInventoryisaboveindustryaveragereaffirmingthecompany’ssuccessinprocessmethodsanddistributionchannels.FuturestrategiesproposedforSamsung:◙Providelatestintechnology,innovation,andproductdesignconcerningsmartphonesegmentwhileattemptingtobefirsttomarketandpotentiallycreatingadifferentiationadvantagefromaCrossPlatformdevelopmentperspective.◙CompeteformarketshareonagloballevelwhilerecognizingpotentialofemergingmarketsFuturestrategiesproposedforMotorola:◙Utilizedistributionandprocessmethodstocontinuesuccessofcapitalizingoffofemergingmarkets◙GainfinancialstabilitywithrecognitionofimportanceofR&DspendingtowardsbudgetingandpossiblecutswithfocustowardscorporatesoftwareintegrationGlobalMobilePhonesComparativeIndustryAnalysis:Page3of47IndustryCharacteristics:“Economicsdefineanindustryasagroupoffirmsthatsuppliesamarket,hencewhyaclosecorrespondenceexistsbetweenmarketsandindustry(Grant,ContemporyStrategyAnalysis,2010).”Theglobalmobilephoneindustryconsistsofallanaloganddigitalhandsetsusedformobiletelephony(Marketline,2009).Oneofthemajorboundariesoftheindustrydealswithgeographicallocation.Thoughmobilephonesarereadilyavailableacrosstheglobe,manyregionsandcountriesarewithoutcellservicerenderingthedeviceuselessinthatpartoftheworldandleavingoutpotentialbuyers(Vick,2010).Combinedwithtechnologythisboundarygoesfurtherascertainpartsoftheworldonlyuseonestandardformobiletelephony.TheleadingtechnologicalstandardisGSM(GlobalSystemforMobileCommunications)followedbyCDMA(CodeDivisionMultipleAccess)(Lovekar).Also,asmobilephonesprogress,sodothestandards.Withsmartphonesbecomingmoreandmorepopular,thedemandfordatacontinuesacrossnetworks.Newstandardsareemergingtomeetthisdemandsuchas3GonAT&TandVerizon’simminentLTEstandardwhichisontracktolaunchbytheendof2010(Shein,2010).Themobilephoneindustryasawholeisaoneofthefastestgrowingindustriesintheworldandexpandinggloballyrapidlyasdevelopingcountriesemerge.Cellphoneshavegonethroughmajorchangessincetheirintroductionin1994undertakingthreemajorupgradingphases.Thefirstmajorupgradeoc