In this task, we are going to analyse, through Porter´s 5 forces model, the Mobile Phone industry in the UK, which includes the mobile phones market as handset manufacturers – such as Nokia – and network service providers – such as Vodafone (Mintel, 2007). By Mobile Phone, we mean “phones that are fully portable and do not rely on a connection to any base unit, instead relying on signals from mobile phone masts of the mobile phone networks operating in the UK” ( MIntel , 2007).


Thus, in order to know the profitability of an industry and one’s competitive advantage regarding competitors, it is necessary to, according to Porter (1980); make an analysis of the 5 forces of an Industry. The 5 forces are:

  • Threat of Entry

The level of facility that has an industry for new competitors that wants to enter in that industry. This threat depends on 2 main factors: the entry barriers of this industry – economy of scale, product differentiation, capital requirements, switching costs, access to distribution channels, cost disadvantages, independent of scale, and government policy – and the expectations that can exist towards this industry.

  • Intensity of rivalry among existing competitors

The level of intensity of the competivity and his structure.

  • Pressure from substitutes products

This happens when there is another product with similar functions as one’s product, and particularly the ones with better price for customers

  • Bargaining power of buyers

This happens when they can influence on prices, better quality, and more services and make companies strongly compete between them. This specially happens when a large portion of the product is bought, when the product represents a big portion of buyer´s purchase, when the product is not different from another, when it is easier to go from one brand to another, when there is low profits, when they can influence in the backward integration, when the product doesn´t influence in the quality of another product or service and when the buyer is well informed.

  • Bargaining power of suppliers

This happens when they can threat to increase their prices and reduce the quality of their goods or services influencing, by this, the profitability of the industry. This specially happens when there is the existence of a substitute in the industry, when suppliers don’t depend on one industry, when the supplier´s product is an important element for the product, when the supplier has created a differentiation or a switching cost and when the supplier threats to belong to the industry.

In addition to these points, one needs to considerate the influence of the government since he is sometimes a buyer or a supplier and he can also affect the industry with his regulations.


Vodafone is one of the leaders in the mobile phone network provider in the UK, with a market share of 26% in 2007 (Datamonitor, 2007). The firm provides a range of voice and data mobile services (text messages and picture messages, among others), and third generation (3G) mobile technology.

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The main threats of Vodafone are:

  1. High rivalry between the others member of the industry
  2. The existence of a substitute
  3. And the bargaining power of customers.

a)The mobile phone industry is characterized by a strong competition. Indeed, not only by the number of competitors, but also because it is a satured sector which make even more difficult to find new clients – over 9/10 individuals in UK have already their own phone (MIntel, 2007)

Thus, there is the existence of several firms in this sector with different nature: network operators (MNO) – T Mobil, Orange, ...

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