Inflation and New Blackberry Phones free essay sample

Branding:  impact  of  event  of  911, the whole phone line and network break down. Due to blackberry has a special network server which belong to itself, its network is still work after the strike. Since then, BB was granted a good reputation with high loyalty. Advertising:the brand image and reputation of blackberry has been outstanding since 1999,now, millions of dollar was invested into the marketing plan advertising for z10 to expand rapidly its market share. And the advertising does has an impact  on  growth  of  sales and reached 1million  devices. low  wage  costs: as its assembly department,no outsources,so high cost but more flexibility? technological  process  or  product  innovation:BES( BlackBerry Enterprise Server is designed to securely integrate with existing enterprise server systems. Hosted amp; Small Business solutions offered. )push  email,security value chain. Battery, business  model,  obtention(customer). Distribution:   more effective distribution for BB with effective carriers that BB has a contract with. after  sales  service: Because the main customer of BB is bulk volume of employee groups from many companies, it is hard to handle and hear the individual complain. But BB offer after sale inquire, the customer service will send experts to try to fix issues for customer if it is equipment or device problem. 7. product  specification  amp;performance  attributes:Provides security service to satisfy customer PESTLE The PESTLE Analysis is a common approach for examining the general business environment in order to manage the future opportunities and threats from probable changes in the environment (Mullins 2002) by analyzing the Political and legal conditions, Economic conditions, social and cultural conditions, technological conditions and environment related issues. In the following we will execute a PESTLE Analysis on the US market. The External Environment consists of the following segments: Demographic: The world’s annual population growth rate is 1. 2%, the total population reaching a total population of nearly seven billion (The World Bank, 2013). Moreover, urban areas, which are more accessible to telecommunication networks and devices, have an annual growth rate of 1. 98% (The World Bank, 2013). It is predicted that by 2013 year end, mobile devices will exceed the total world population (Cisco, 2013). This tends to state the mobile industry has enormous sustainable growth opportunities. China, India and the United States (US) are the world’s top three mobile device subscribers; over 80% of their total populations use a mobile device. Consequently mobile communication providers should focus on product distribution in these markets. Political: Many regions including North America and Europe, maintain a competitive industry structure; allowing a multitude of mobile providers to compete in a given marketplace (â€Å"Industry report†, 2012). However, Canada is dominated by only three mobile providers; Telus, Bell and Rogers Wireless Communications. This results in high system access fees. US has low barrier. Recently, the Canadian Government announced it will be auctioning off prime wireless space to stimulate more competition in the mobile market (Palmer amp; Sharp, 2013). Blackberry has struggled to operate in this competitive environment, and any changes in government regulations, promoting competition, may have a negative effect on their bottom line. In addition, safety standard regulations prohibiting the usage of toxic substances in products, such as the Canadian Chemicals Management Plan, will negatively impact the mobile industry, as increased quality control will increase company costs. Economic: trade barriers, interest rates and inflation affect the mobile industry. Recent economic crisis around the globe have decreased consumer spending. During the economic recession, Blackberry’s share price suffered (CBCnews, 2013), displaying its volatility and a close correlation to economic changes. Moreover, as energy resources become scarce, the mobile industry will face high production costs due to the extensive use of oil in manufacturing processes. Socio-cultural: Mobile devices are utilized by both consumers and business segments to conduct both work and personal tasks. According to a recent study, the majority of mobile device users want a multi-functional device with access to more data (Cox, 2010). This, points to the fact that mobile device consumers prefer smart-phones. The mobile communications market is a growing industry that has captured the attention of consumers around the world, and as more individuals migrate to urban areas, the mobile market will further expand with the high demand for connectivity. Technological: The mobile device industry is a fast-cycle market characterized by rapid development of innovative products. This made a special situation for a highly competitive environment. So, the industry suffers from short-product life cycles, which requires industry competitors to keep pace with technological advances. Additionally, a specific technology can become outdated and undesirable before its total costs are covered (â€Å"Research†, 2012). Thus, capturing the first-mover advantage is of paramount importance for a competitor during product development. The mobile device industry is highly dependent on the availability of communication systems in countries. Therefore, as more countries develop their communications infrastructure, the mobile industry will be able to expand into new markets. Global: Governments, such as the European Union, are engaging in deregulation and eliminating trade barriers in the wireless telecommunication industry. This provides an opportunity for mobile communication companies to expand into new consumer markets. China Political and legal analysis Political factors include government regulations and legal issues and define both formal and informal rules under which firm must operate. And it is claimed that the political force is probably the most turbulent force in the environment (Fahey amp; Narayanan 1986). In the past one decade, the Chinese government attaches great importance and focus to the development of e-commerce in the most populous country, for example, on issuing the Summaries of the Middle/Long Term Science and Technology Development Plans of China and the Development of Information Industry Plans in the Eleventh Five-year and Long Plan in 2020 Years in The Ministry of Information Industry, the â€Å"application of e-commerce platform technology† has been listed as a key point (Li 2010, p. 60). In term of the legal system, the Chinese legal framework for e-commerce is still in its nascent stage and has already experienced several problems. China has limited experience with drafting e- commerce legislation for issues such as transactional security, intellectual property rights protection and tax. And regulations supporting areas critical to th e development of e-commerce such as the privacy, consumer rights, and validation of electronic contracts and recognition of digital signatures have yet to be written (Kariyawasam 2011, p. 70). But the legal system of China does develop quickly to meet the needs of the e-commerce. Economic analysis Any development in the economic part of a country’s environment could have significant impacts on the SMEs and their activities. These factors include the total GNP trend, GDP per head, inflation rate, exchange rate, energy and raw materials availability and cost, employment level, interest rate, monetary and fiscal policies, banking policies an investment and so on (Analoui amp; Karami 2003, p. 5). Figure 2 Growth of China GDP per capita in the new century Source: The World Bank Group 2011 Above is the growth trend of the GDP per capita of China in the new century, similar to the indicator GDP, the country has sustained a continual rapid growth in term of GDP per person, indicating that each people is creating more and more values to the society resulting in the increase of the individual consumers’ purchasing power. Though the economic situation is seems to be good, the economic development does slow down a little and also with worrying trends such as high inflation rate and high property prices. According to the most recent news, the consumer price index rose 6. 1 per cent from a year earlier in September, down from a three-year high of 6. 5 per cent in July. Politically sensitive food prices, however, increased by more than 13 per cent. The overall economy has now slowed for three consecutive quarters – largely the result of BeiJing’s efforts to cool growth and dampen inflation. The central bank of China, the People’s Bank of China, has increased interest rates five times over the past year and increased the reserve requirement for commercial banks for nine times, and at the same time also asking banks to reduce lending and imposing limits on home purchases to curb property and consumer prices (Anderlini 2011). Social and cultural analysis To understand the social and cultural environment involves close analysis of the society. Demographic changes such as population growth, movements and age distribution will be important, as will changes in cultural values and social trends such as family size and social behaviors (Dransfield 2005, p. 60). Such factors could include: Consumer lifestyles Environmental issues Demographic issues Education Immigration/Emigration Religion With the rapid economic growth, there are growing people having Internet access and use the Internet to do shopping. Many people have called themselves the Taobaoer by spending much of their monthly expenditure on Taobao, the largest B2C e-commerce website. In 2010, China’s online shopping industry had a turnover of $80bn, and grew 87% year-on-year. China’s 420 million Internet users spend around a billion hours each day online and last year, 185 million made at least one online purchase. According to Boston Consulting Group, the volume is expected to increase fourfold by 2015. And E-commerce has already been changing the way Chinese consumers think about shopping: online, it is more social than a hard sell. It’s a new engaging experience to savour (bbc. co. uk 2011). But like many other physical shopping, cheating and fake products are common in the online shops though he most populous shops tend to sell quality and price competitive products to the customers or will state clearly the possible quality problems of the products in the introduction of the products in the pages. And also according to Patricia Ordonez de Pablos and Miltiadis D. Lytras (2009 p. 406) In Chinese business there is often a need and expectati on for face to face contact to exist in order to build up a sense of trust which is related to the Hofstede’s notion of individualism-collectivism in which the Chinese culture is considered as having a high collective scores (Hofstede 1997). Technological analysis Technological factors include areas such as new products being developed, new purchasing mechanisms (intranet, extra-net), new production technology, new distribution mechanisms (Internet) and new methods of working (e. g. mobile telecommunications) (Botten 2009, p. 39). One technological problem that hinder the development of the Chinese B2C industry is the lack of a stable and secure online payment systems and this problem is further strengthened by the Chinese consumers’ preference for high Uncertainty Avoidance Index (UAI) and high Long-Term Orientation (LTO) (Hofstede 1997). What is more, based on the perspective of Ortolani (2005) there had been only 1 percent credit card penetration in China suggesting that the most widely used payment method had low acceptance in China and the payment system to support online credit card transaction is also facing low usage. And the lack of safe online credit card payment system is one of the key reasons behind this low usage and penetration. Environmental analysis Environmental factors refer to all the factors directly related, influenced or determined by the surrounding environment. This includes, but is not limited to weather, climate, geographical position, climate change and even insurance (Heldman 2011). Despite the fact that the environmental protection work is still low in China because the majority of focus and priority had been attributed to the alleviation of poverty and economic development which result in the low public participation in the environmental protection work, in the recent years, with the substantial economic advancement and raised living standard, income level and also the degradation of environment in the country, the Chinese government has started educate the public about the nvironmental protection. Conclusion of the PESTLE analysis As proposed by Bjorn Moller (2010, p. 6), with the help of the PESTLE, companies would have the possibility to understand the external macro-environment in which they operate and might operate in the future. Here based on the analysis we have above, we are able to draw some conclusions. Firstly, very stable political conditions and rapid economic growth has made the e-commerce industry in China attractive to investors and the increasing awareness of environment protection also promote the way of e-commerce as it creates less pollution and damage to the environment; secondly, there are also risks such as lack of trust, stable and secured online payment systems and lack of legal protection that create challenges and uncertainties to the players in the industry. Threat of new entrants is moderate. The ability for brand new competitors to emerge is very low. The smartphone industry is very technologically intensive. This means that a brand-new entrant would require a significant amount of money to build a comparative technological product in order to compete with RIM’s technology. No one in their right mind would attempt design and manufacture like expensive product for such a competitive industry. High capital and large economy scale are required. Also a strong brand is important and customer is loyal to existing brand. The barrier of entry is high. There are, however, many other technological companies in the world that have the money and resources to attempt to build a competing product. For instance, only a year ago, blackberry’s only threatening product was Apple’s iPhone and android. Since then, Microsoft and Nokia (who previously had no involvement in the smartphone industry) have merged in order to gain a share of the rapidly growing market. Because of the market’s rapid growth, the threat of other wealthy technological companies emerging is high. ( )(fire  fox) Threat of substitute products is high It was the first company to launch the revolutionizing smart phone in 1999. Their first real competitor emerged in 2008 when apple launched the Iphone. It has some threat substitute product in the past. Since apple’s launch, the threat of substitute products has skyrocketed, and continues to grow with the recent lance of Android. Android is a reasonably cheaper product with similar attributes. applicability . However, apple also has similar product and function, but is often considered a superior product. This sets black berry in the middle of the road in the terms of price and quality. Bargaining power of buyers is high. Traditionally, the cellular phone industry, particularly the smartphone segment, has had a very little range of price. There may be up to couple hundred dollar difference between phones, the power is relatively high. When there are large numbers of customers, no one customer tends to have bargaining leverage. Limited bargaining leverage helps Blackberry. It will have a long-term positive impact on the this entity, which adds to its value. This statement will have a short-term positive impact on this entity, which adds to its value. This statement will lead to an increase in profits for this entity. Large number of customers (Blackberry) is an easy qualitative factor to overcome, so the investment will not have to spend much time trying to overcome this issue. When customers have limited choices they end up paying more for the choices that are available. Limited buyer choices are a positive for Blackberry. †¦ When customers require special customizations, they are less likely to switch to producers who have difficulty meeting their demands. Buyer customization positively affects Blackberry. †¦ Buyers require special customization (Blackberry) has a significant impact, so an analyst should put more weight into it. This qualitative factor will lead to an increase in costs. Buyers require special customization (Blackberry) is an easy qualitative factor to overcome, so the investment will not have to spend much time trying to overcome this issue. Bargaining power of supplier is low. A low concentration of suppliers means there are many suppliers with limited bargaining power. Low concentration of suppliers positively affects Blackberry. High levels of competition among suppliers acts to reduce prices to producers. App developers do not have bargaining power, blackberry is only customer. So the bargaining power of supplier is low. This is a positive for Blackberry in short term. Intensity of Existing Rivalry is high Large industries allow multiple firms and produces to prosper without having to steal market share from each other. Large industry size is a positive. Apple   ,wp? 3. 2%,bb? 2. 9. , Government policies and regulations can dictate the level of competition within the industry. When they limit competition, this is a positive for Blackberry. When industries are growing revenue quickly, they are less likely to compete, because the total industry size is also growing. The only way to grow in slow growth industries is to steal market-share from competitors. Fast industry growth positively affects Blackberry reference BlackBerry sales forecast cut despite strong demand for Q10 With Canaccord Genuity’s global surveys pointing to weakening sales of the BlackBerry Z10, but strong initial demand for the limited supply of Q10 smartphones, analyst T. Michael Walkley is trimming his BB10 estimates. For the first quarter of fiscal 2014 (ending May 2013), his shipment estimates fall to 2. 8 million units from 3. 3 million previously. Jonathan Ratner | 13/05/06 BlackBerry shares fall after bleak report on Q10 and Z10 sales More trouble for BlackBerry as the company’s shares fell more than 5 percent after Pacific Crest Securities issued a bleak report on the sales performance of the two new smartphones. We believe the production levels of 1. 5 million to 2 million units per month are well in excess of the sell-through, Faucette said in a note to clients. Ominously, the note added that BlackBerry could be forced to cut the production rate of its smartphones to curtail further loss. (BBC 2013) BlackBerry Falls on Reports of Weaker Sales, Returns of Z10 he Canadian smartphone maker, fell the most in two months after analysts said sales of its new Z10 device are showing troubling signs. The company denied one of the reports. BlackBerry slid 7. 8 percent to $13. 55 at the close in New York, the biggest decline since Feb. 13. The U. S. launch of the Z10 started poorly and weakened significantly as the days passed,† Joseph Fersedi, an analyst at ITG Investment Research, said today in a note, â€Å"In several cases, returns are now exceeding sales, a phenomenon we have never seen before,† Detwiler Fenton said. By Hugo Miller Apr 11, 2013 BlackBerry maker now in struggle for survival ( | By Heather Kelly, CNNJanuary 30, 2013 | ) WASHINGTON BlackBerry maker Research in Motion is now in a struggle for survival after its latest quarterly report underscoring its deteriorating position against other smartphone makers, analysts say. Not only did RIM report a widening loss of $518 million and steep slump in sales, the financial impact was brutal. RIMs sales volume dropped 51%, according to the companys third quarter 2012 earnings, and in July, RIM announced plans to cut 5,000 jobs until early 2013. RIM shares tumbled 19 percent to close Friday at $7. 39, their lowest level since 2003, and down more than 90 percent from their 2008 highs. In the US market, only around five percent of smartphone buyers opted for BlackBerry in early 2012, according to a recent Nielsen survey. RIMs prospects appear to be turning from bad to worse, said Tal Liani, a research analyst at Bank of America/Merrill Lynch, We do not believe BB10 devices will turn around its struggling business, he said.