COMPETITIVE ADVANTAGE IN MOBILE PHONE INDUSTRY

Modern day Business demands competitive advantage that shall provide the much needed vigor for any industry
player, whether a new entrant or an existing organisation. The reason is simple; the fierce competition is threatening
to put pressure on pricing and thereby adversely dragging down the profit margins, it is but vital for the industry
players to set right the back-end operations while improving the front-end competitiveness. The two concepts of
Strategic Management as propagated by Michel E Porter, Viz., Value Chain Analysis and Core Competency for
competitive advantage have gained the significance in almost all the areas of business and mobile phone industry is
no exception to this.

While mobile phone industry on one hand seems to be providing promising growth rates YoY (Year-on-Year), the
competition is also brewing up from all types of companies, both MNCs (Multi National Corporations) as well small
players who just assemble and sell. The inflow of cheap yet durable Chinese products are another threat that is
common now-a-days to any industry, has its influence on Mobile Phone numbers also.

Under the given scenario, the concepts of value chain analysis and developing a core competency shall give immense
boost to the companies’ performance from the costing as well as marketing point of view. Where as value chain
analysis shall tighten the operations and have strict vigil on the costs, the competitive advantage can gain market
advantage—combination of both the strategies shall help withstand the competition and survive.

The present paper tries to examine the significance of Value Chain Analysis and Core Competency from the point of
view of mobile phone industry and make recommendations for improvement of performance parameters.

INTRODUCTION:

The concept that a cell phone is used for basic communication has undergone a sea change as other value added services are added to this amazing instrument with an ultimate aim of converting the cell as a source of communication, knowledge and entertainment. All companies are spending huge amounts on R & D to not only to enhance the value added services but are trying to make it affordable and within reach of common man.

At present the instruments are available at around US $ 30 and the aim is to bring the same to less than 25 $, same is the case with tariffs, which at present are around US cents 5 per minute; present potential is estimated at 11 million households worldwide per month, and if the tariffs can come down to the proposed levels of US cents 2 per minute, this number may go up to an estimated 32 million new customers per month.

The markets like India, China, Brazil, Russia and Africa shall be very attractive with huge potential if the call
rate can be reduced to a level less than 2 cents per minute.

Attachments

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