This report is based on the Singapores Mobile phone industry. We have conducted a strategic analysis of the industry.

Authors Avatar by vutrongnguyen1990gmailcom (student)

                                                                        

University of Wales (UOW)

&

Management Development Institute of Singapore (MDIS)

Group Assignment

Submitted on Due Date? Yes (Date submitted: 15/08/2011)

Word limit observed? Yes (No of words: 4956)

Executive Summary

This report is based on the Singapore’s Mobile phone industry. We have conducted a strategic analysis of the industry by scanning and studying the key forces the drive changes in the industry such as political-legal, technological, socio-cultural, and economic forces.

Secondly, with the help of Porter’s five forces we analysed the key competitive forces such as buyers, sellers, potential entrants, substitutes and other stakeholders and the extent to which they impact the attractive of the industry.

Thirdly, we mapped the key strategic groups of the industry – Apple, Nokia, Samsung, HTC, Sony Ericsson, Blackberry, LG, Motorola and Others, and studied the main strategic group and its strategic type, which consists of Nokia, Sony Ericsson and Samsung.

Lastly, with the help of Issue Priority Matrix, we analysed the key external environmental factors and discussed their implications on the industry.


Table of Contents

2.1        Technological        6

2.4        Climate        9

    2.5   Economic Forces…………………………………………………………………….....9

4.1.2        Price        19


1. Introduction

Singapore boasts of a highly developed and efficient mobile phone industry. Mobile phone has now become one of the most essential parts of human life and the island nation being one of the busiest nations of the world therefore, the use of mobiles is on a wider basis. Singapore is dotted with a number of mobile phone companies bringing in new and developed technological inventions every next day to meet the growing demands of the market conscious people.

Consumers have been groomed to demand an increasingly high standard of functionality in their mobile phones. The good news for mobile phone suppliers is that this ensures handset replacement is rapid, as research and development evolves the phone into a personal organiser, music player, camera and mobile entertainment centre. Consumers want to enjoy games, video clips and music on their phones and the mobile music industry in particular is going from strength to strength.

The mobile phone industry is certain to continue evolving, with some research suggesting that one day phones will take the place of credit cards and the remote control. The innovation and level of competition in the mobile phone markets can only mean for greater choice and lower competitive prices.

2.  Key Forces Driving Change in the Mobile Phone Industry

2.1 Technological

Technological changes has innovated mobile phone industry. Adaptation in creative technology leads to the possible outcome of new products and improvement of existing products. Furthermore, the technological breakthrough can alter the ways to conduct business and has drastic impact on the firm's environment. It can penetrate into new market and significantly shorten others products' life cycle. Therefore, it is essential to implement technological forecasting in an attempt to foresee the advancement and estimate the impact brought forward to the organization's operation. (Pearse & Robinson 2009, pp. 88-89)

Since the beginning of introducing the cellular phone in Singapore in 1988 to the digital cellular system in 1990s, the industry has taken evolutionary of basic concept from simple call of first generation to the second generation which include the text messaging and to smart phone. Basically smart phone allows users to perform simple task which was usually can only be done by PC. Due to technological advancement, the cost has been significantly reduced and an increase in demand forces the organizations undertake various strategies to secure different market segments.

2.2 Political-Legal Forces

Political-legal forces are the forces that allocate power, provide constraining, protecting laws and regulation. The important factors of this kind of forces are including stability of government, tax laws, foreign trade regulations and law on employment (Wheelen, 2008).

2.2.1 Political Risk

According to the statistics from the ABM Country Risk Report on 29 October 2010, the Political Risk level is lower than worldwide average. Singapore government is considered as efficient and be able to create stable political and economic environments. As can be seen below, most of the political risks standards are around score 1 and Social Stability ranks score 4, which are all below world average level (ABM Country Risk Report, 2010).

Graph 1: Political Risk Summary

(Source: A.M. Best)

2.2.2        Tax Law

According to the statistics from government web side in Singapore, the current corporate tax rate for all companies is a flat rate of 17%. Comparing with the corporate tax in other Asian countries, such as China (25%), India (30%-40%), Vietnam (25%), Indonesia (20%),lower corporate tax rate is profitable for investors to invest their business (Worldwide-tax, 2011).

2.2.3        Free Trade Agreement

A number of mutual recognition agreements (MRAs) on conformity assessment for a number of goods have been signed by Singapore with her trade partners. Telecommunication equipment, such as mobile phone, is one kind of products in MRAs. MRAs for telecommunications conformity assessment reduces technical barriers to trade in telecommunications equipment by allowing equipment to be tested in the exporting country and accepted in the importing country with minimal further regulatory action. It offers chances for telecommunications equipment manufacturers and retailers to explore new business and benefit them with cost savings (IDA Singapore, 2011).

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2.3   Socio-cultural Forces

Socio-cultural forces are the forces that regulate the values, mores, and customs of society. It generally includes population and age structure, average income level, and key concept and value (Wheelen, 2008).

2.3.1   Population and Age Structure

According to the Singapore Statistic in 2010, the total population in Singapore is 5,076,700, and annual grow percentage is 1.8%. The number of residents, whose age is between 15 and 65, is 2,778,900 referring to the age structure of Singapore, accounts for roughly 55% of the total population. These people are the main potential customers in mobile phone industry ...

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