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Understanding Today’s Smartphone User, SWOT Analysis Example

Pages: 4

Words: 1137

SWOT analysis

Introduction

FunMobile is a company that allows users to fully customize their mobile phone through applications, screen-savers, backgrounds, and printing their own phone cases. The company offers various packages for companies and individuals, ranging from $15 to $150 per mobile phone. Users can create an online account and through the app provided by the company, order applications, software, services, and accessories. While the company is new on the market, it is extremely popular among people aged 15-40 who have a smart phone and would like to stand out from the crowd.

Company Analysis

Economic forces

While the company operates mainly in the United States, it has the potential to create franchise opportunities worldwide. According to a recent report created on the mobile market by Lenovo (2014), smartphones are gaining market share over non-smart phones globally.

Technological forces

While the number of mobile phone shipments in the United States remained the same between 2012 and 2013, the percentage of smartphones increased by 24 percent. Industry trends highlighted by Informa (Roberts, 2013) include the rise of WiFi connectivity, the transition to 4G, and the increase of user-specified data usage.

Political forces

The main political forces in the market can be defined as trade and taxation policies related to mobile technologies.

Sociocultural forces

 The Generation Y’s new way of using and customizing smartphones has been identified by the eMarketer Magazine (2013), stating that this niche is more likely to use apps and customization features than the older generation. Further, this generation is focused on expressing themselves through their tablets and smartphones.

Legal forces

 Intellectual property rights and privacy laws are becoming more important for software developers and mobile manufacturers in the future, according to a study published by Lenovo (2014, p. 8).

Target Markets

5P Analysis

Products of the company are fully customizable, therefore, they have an unique selling feature that diversifies them on the market. Accessories and personalization features are able to make the customer become a co-creator of the product.

The place for distribution is likely to be over the internet and through mobile applications, which would increase access, and reduce advertising costs.

Promotions of customizable features and accessories is likely to rely on mobile social media advertising, which has advanced targeting features, potentially  making the campaign’s ROI high.

Prices: The price set by the company is created to suit every budget, and it is competitive compared with individual developments of software and designing unique accessories. The company FunMobile can realize a price based advantage over smaller competitors, due to the large scale operation.

 People: the target market of the services and products offered by the company is likely to be Generation Y consumers with high preference for creating their own experiences, socializing online, and expressing themselves through their gadgets.

STP Analysis

 Market segmentation should be based on understanding and researching smartphone users’  buying and usage habits. It is likely that the main target market will be Generation Y customers with WiFi enabled mobiles who are looking for cost-effective customization features. The positioning of the product, therefore, should be based on building brand equity, communicating the added value towards target customers, and increasing the company’s reputation and the brand awareness within the target market.

Goal Setting

Short term

 FunMobile is looking to expand its operation in the United States, by promoting its products and services to customers in the target niche: males and females aged 16-35, with an internet enabled smartphone. In order to achieve this goal, the company will engage in an online and social media campaign that will create awareness of the services in the United States. The company is looking to increase its order volumes ($1.5 million for 2014) by 200 percent in one year, by investing $100.000 into social media and targeted online advertising campaigns.

Long term

 Long term, FunMobile would like to become the number one player in the customizable mobile accessory and application market, and have a market share of over 30 percent. For this strategy, the company will need to develop collaboration agreements with mobile carriers selling smartphones, and offering exclusive customer discounts in order to create a greater brand awareness and reputation on the marketplace.

SWOT Analysis

Strengths

·      Unique selling features of the product

·       Large volume creates price and cost advantage

·      Low investment required for delivering products and services

Weaknesses

·      Low brand reputation

·       Competition from online retailers

·      Lack of product positioning

Opportunities

·      High customization demand of Generation Y

·      Developing technologies, such as 3D printing

Threats

·      Low barrier of entry for new companies

·       Smartphone brands’ large market share and great brand loyalty might make it hard to expand

One of the main identified opportunities in the market, based on the Lenovo market analysis (2014, p. 8) is that “innovation in hardware design is at a historic low”. This means that the simplistic design one button touch screen  phones might no longer be appealing for Generation Y customers. FunMobile can fulfill the needs of customers who are looking for better designs.

The main threat is that customers with a strong smartphone brand loyalty might choose buying software and accessories from mobile companies instead. Further, the accessories market is large enough for companies like Samsung and Apple to invest into, while smaller companies might enter due to the low barriers of entry.

The most important strength of FunMobile is that it has unique selling features, and the investment required for creating new products is low. However, the lack of positioning and brand reputation can stand in the way of the company’s expansion, therefore, the company should seek collaboration with established brands.

Feasibility Analysis and Conclusion

 Based on the above review of strengths, opportunities, weaknesses, and threats, as well as the operating environment, it is evident that the company needs to focus on collaborating with smartphone companies that already have a strong brand loyalty. Social media and online marketing campaigns seem to be the most effective option for creating awareness in the target market. The Kantar Worldpanel (Milanesi, 2014) states that two of the main drivers of the smartphone market in the 1st quarter of 2014 were the ability to personalize phone (20 percent) and the attractiveness of the design (28%).  This indicates that there is a current gap in the market that FunMobile can fill, by providing an opportunity for members of the “Generation Y” to become collaborators in creating their own smartphone experiences. As the recent eMarketer (2013, para 4) article states: “Members of Generation Y are young enough to value smartphones but old enough to be able to buy them, suggesting that they will be smartphone power users for years to come”.

References

Milanesi, C. (2014) The smartphone purchase experience. Kantar World Panel. Retrieved from http://www.kantarworldpanel.com/dwl.php?sn=publications&id=476

eMarketer. (2013) ‘Generation Y’ Leads the Way on Smartphones. Emarketer, January 15, 2013

Roberts, M. (2013) Understanding today’s smartphone user. An updated and expanded analysis of data-usage patterns in six of the world’s most advanced 4G LTE markets. White Paper. Retrieved from http://www.informatandm.com/wp-content/uploads/2013/06/Mobidia-ITM-June-2013.pdf

Lenovo (2014) Global smartphone market analysis and outlook: disruption in a changing market. CCS Insight Reports. Retrieved from http://www.lenovo.com/transactions/pdf/CCS-Insight-Smartphone-Market-Analysis-Full-Report-07-2014.pdf

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