Strategic Human Resource Management
The cell phone industry is one of the fastest growing industries of the world. The first mobile phone was launched in the year 1973. Since then the industry of mobile phone has been revolutionized (Goodwin, 2015). The changes are being made ever since just to meet the demands of the consumers. Right now there are more than 7 billion users of mobile phone worldwide. Now the mobile phones are not merely used for texting or calling. They do more than that (Husso, 2011). The major breakthrough for mobile phones industry was in the year 2002 when the first coloured screen mobile phone was launched. Another milestone was in the year 2004-2006 when the multimedia cell phones were launched. Another remarkable milestone in the journey of the revolution in the mobile phone industry was in the year 2007 when the smartphones were launched in the market. It was the major driver for the revolution in the mobile phone industry (Chan, Chen, Cormane, Her and Thomas, 2006). A study revealed that out of the total population of the planet more than 50% of the people have a subscription to mobile phones (Conly, 2010). The assignment is going to discuss about the drivers and barriers of the cell phone industry.
There has been a revolution in the mobile phone industry over the past decade. The mobile phone industry is expected to grow even further in the future. The growth of mobile phone industry is expected to reach at $334.8 billion in the year 2017 (Research and Markets, 2012). A study has revealed that out of the total sales of the mobile phones 70% consists of the smartphone all over the world. The major players of the mobile phone market are Nokia, Samsung and iPhone (Foresman, 2011).
The rapid growth in the mobile phone industry though given the companies a chance to grow worldwide but it has also posed a threat to the survival of the companies. There are a number of key issues that need to be faced by the company in the appropriate manner in order to be successful. The key strategic issues for the cell phones industry are:
Increasing Demand for Capacity: The one of the greatest challenges of the mobile phone industry is the increasing demand for the capacity. Gone are the times when the cell phones merely used to be a device for communication or exchanging texts. Now the cell phones perform a lot more functions than that. A massive strain on the networks is being put and this is the reason that the companies have to be alert at this alarming rate’s data traffic. The increased traffic imposes a numbers of difficulties for the users of the mobile phones. Like the slow speed of the internet, or downloading problems.
Network Infrastructure: Another key issue for the mobile phone industry is the challenge of the network infrastructure. With the launch of the 4G service the mobile companies all over the world are under huge pressure of optimizing their network infrastructure. In this cut throat competition the companies cannot sustain without adopting the appropriate strategies at the appropriate time.
Trend of ‘BYOD’: There is a trend of BYOD (Bring Your Own Device) in the IT Companies today. With different devices working together at one place the companies must develop the device which does not create any problem in performing the tasks related to IT (Athow, 2013).
Security Issues: The technology has made the world shrink but also made it vulnerable when it comes to the security and safety of the customers. The quality of ‘being virtual’ of the devices has posed a great threat to the security and safety of the users of mobile phones. With more and more people using internet the cyber-crime and hacking is also increasing at an alarming rate (Korea.net, 2012).
The Mobile Industry in UK and India: A Comparative Analysis
The mobile industry is one of the major sources of the growing economy of both the countries viz. India as well as UK.
Strategic Drivers of the Mobile Industry
The following are the drivers of the industry of mobile in UK and India:
These are the major drivers which are bringing the revolution in the country and are responsible for the development of the mobile phone industry worldwide (Danova, 2014).
The subscription of mobile phones in every region is increasing. The following figure depicts the increment in the subscription of the mobile phones.
The mobile phone industry is one of the fastest growing industries of Europe contributing to the financial growth of the country. In the entire Europe UK comes at third place in terms of volume of the market of mobile phone. Whereas Germany comes first and second place is held by France.
One of the major breakthroughs in the UK mobile phone industry was the introduction of 5G. It is driving a great change in the industry of UK. With the introduction of 5G technology the users of the UK are listed as those with one of the fastest speed of downloading. UK is joining hands with China in order to successfully implement the 5G technology. With the introduction of the 5G the mobile industry of UK is going to be refined (Wilson, 2015). This will enable the users to download the videos and other stuff at the unimaginable speed (Banks, 2014).
The telecommunication sector in India is also one of the fastest growing sectors in the country. The growth of the Telecom Sector in India can be understood with the fact that the telecom sector of India stands at the second place in the whole world. In the terms of GDP (Gross Domestic Product) the telecom industry of the India stands at US $ 400 billion. The telecom sector of India is expected to grow as more than US $ 4 million by the end of 2020 (Shine, 2014). The major breakthrough for Indian telecom industry is the introduction of 4G. Till now there has been 3G in the Indian telecom industry but with the introduction of 4G there has been a revolution in the Indian telecom industry. By the end of 2015 the subscription of 4G is expected to reach at US $ 10 to 15 million (PWC, 2014).
The mobile phone industry globally is not fragmented. There are various major players in the market which have a substantial portion of the total market share. The mobile manufacturers of Asia have a great position in the mobile market as 19% of the total manufacturing of mobile phones was held by the Asian market. The major players of the mobile phone markets are Nokia, Samsung, I phone, HTC, Sony Ericson, Motorola and RIM etc.
The competition for mobile phone market is cut throat with the increasing numbers of users of cell phones worldwide. This is the reason that if any company wants to be successful it needs to perform the internal and external audit very well. To assess the competition a very famous tool is Porter’s Five Forces Analysis. Through the Porter’s Five Forces Model the companies get to know that where the power lies of their business. The tool is very helpful in making the firm understand the current position of the company and its strength and also the probable outcomes of the action that it is going to take in future (Mind Tools, 2015).
|Threat of Substitutes|
|Threat of New Entrants|
|RIVALRY AMONG COMPETITORS|
Rivalry among Competitors (High): The rivalry among the competitors in the telecom industry is very high. There are lots of players in the mobile phone market. The major players of the cell phone market like Samsung, Motorola, I phone, Sony Ericson and Nokia are doing continuous innovation in order to be successful thus competition is very fierce. The technology is yet another most important factor for the success of the firm in mobile phone markets. The mobiles phones of today are not only used for mere communication. These are expected to do a lot more than that thus the cell phones of every company are coming with very exciting new features and technological advancements.
Threat of New Entrants (Medium): The threat of new entrants is neither high nor low. The cell phone market worldwide is not fragmented and thus a huge amount of capital and resources are required to enter into the telecom market. Although the customers of today are highly diversified in their choices and they are not that much brand loyal and this has given the new entrants a little bit of ease in terms of the entry into the mobile phone market. The threat of entrants is not that high because of another reason and that is the government regulations. There are a number of regulations in the cell phone market which makes it harder to enter into the telecom market.
Threat of Substitute Products (Low): The threat of substitute products is quite low as the cell phones of today are coming with a numbers of features and this is the reason that they are taking place of the laptops, have eliminated the pagers and also given a threat to other devices. The multiple features of the cell phones have made them harder to substitute. Like people would rather prefer to talk through cell phones with walkie-talkie as there is a limitation of the distance in walkie-talkie.
Bargaining Power of Buyers (High): The bargaining power of the buyers is very high. Today the customers have lots of options when it comes to make their purchasing decision. They do not have the limited offer where they have to make a choice because they are compelled to. They are not loyal to any brand. They like to switch to the brand where they feel comfortable. Thus their bargaining power is quite high.
Bargaining Power of Suppliers (Low): The bargaining power of suppliers in the cell phone market is low. The manufacturers of the cell phone like to supply various parts for the cell phone like batteries, chips and SIM card etc. There are a number of suppliers available in the cell phone market and thus the suppliers do not have the influence over the decision making of the companies regarding their choice of suppliers (He, 2008).
The Fragmentation of OS: The main barrier which affects the development of the mobile phone industry is the fragmentation of OS. The OS of the mobile phone industry can be categorized into three: Android, I Phone and Windows. This fragmentation makes it quite difficult especially for the developers to develop such apps or software which are compatible in all three OS. The people use different OS and they have their different problems. The feedback of an android user would be entirely different than of the user of windows phone.
Coverage: Another problem that acts as the barriers of the cell phone market is the issue of coverage. The introduction of 3G and 4G although has given the advantage high speed but also the problem of the limitation of the coverage persists (Hill, 2012).
Data Traffic: The traffic in the data is yet another major problem faced by the mobile industry. This is the reason that efforts are being made to reduce the strain on the networks due to the increase use of data.
Government Issues: Another major barrier that is creating the problem in the mobile phone industry development is the issues regarding to the government. Like in India there was a Scam named as 2G scam. This scam had created a problem for all the telecom industries operating in India.
The assignment gave me the insights of the industry of the mobile phone worldwide. The two countries were specially discussed in the assignment i.e. UK and India. These two countries are on the list when it comes to the fastest growing mobile phone industries in the world. The Indian telecom industry comes on the second rank in terms of growth in GDP (Gross Domestic Product). The industry (mobile phone) has seen a significant growth in UK too, but as there are two sides of a coin there are two sides of the development of the telecom industry too. There are various strategic drivers of the cell phone industry. These are also known as CSFs (Critical Success Factors) for the industry. If the companies are failed to consider these CSFs (Critical Success Factors) then the companies cannot sustain in the market. This is the reason that the certain strategic drivers of the cell phone industry were discussed in the assignment which gave me a practical implementation of the drivers of the mobile industry. In the assignment the factors and barriers which could affect the growth of the mobile phone industry were also discussed. Overall the assignment gave me very deep knowledge of the current trends of the mobile industry worldwide and the challenges that this industry is facing.