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Cell phone

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MBA Xerox

on 15 October 2012

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Transcript of Cell phone

Telecommunications:
Cell Phone Service Providers Major Competitors AT&T Wireless
Sprint PCS
Verizon Wireless
Cingular Wireless
T-Mobile Total U.S. wireless service company revenues were about $178.4 billion in 2011
Market Penetration 101% in US (2012)
31% of house holds primary phone line FIVE FORCE MODEL Overview:
Introduction: What is the industry?
Major players: Who is the competition?
Measure up: Market overview
Five force model
Key Success Factors
SWOT
Industry Outlook Rivalry among competing sellers Substitute products Buyers Suppliers New Entrants 162 million subscribers in US WEAK High economies of scale
High capital requirements
The incumbents’ control of distribution channels
Price manipulation by incumbents to deter new entrants - Few competitors
- Equal size and power
- Little Diversity
- Low growth rate
- High costs
- High exit barriers STRONG Price wars Key Success Factors FIVE FORCE MODEL Rivalry among competing sellers Substitute products Buyers Suppliers New Entrants 162 million subscribers in US WEAK STRONG High economies of scale
High capital requirements
The incumbents’ control of distribution channels (network)
Price manipulation by incumbents to deter new entrants - Few competitors
- Equal size and power
- Little Diversity
- Low growth rate
-High costs
- High exit barriers STRONG Price wars FIVE FORCE MODEL Rivalry among competing sellers Substitute products Buyers Suppliers New Entrants 227 million subscribers in US WEAK STRONG High economies of scale
High capital requirements
The incumbents’ control of distribution channels
Price manipulation by incumbents to deter new entrants - Few competitors
- Equal size and power
- Little Diversity
- Low growth rate
-High costs
- High exit barriers STRONG Price wars FIVE FORCE MODEL Rivalry among competing sellers Substitute products Buyers Suppliers New Entrants 162 million subscribers in US WEAK STRONG High economies of scale
High capital requirements
The incumbents’ control of distribution channels
Price manipulation by incumbents to deter new entrants - Few competitors
- Equal size and power
- Little Diversity
- Low growth rate
-High costs
- High exit barriers STRONG Price wars OUTLOOK 1 1 WEAK Great number of buyers and few servers
No real threat backwards integration
Retail
Switching costs
Locked in - termination fees
Dependent on the service provider to sell their product
Products are not differentiated FIVE FORCE MODEL Rivalry among competing sellers Substitute products Buyers Suppliers New Entrants 162 million subscribers in US WEAK NO THREAT High economies of scale
High capital requirements
The incumbents’ control of distribution channels
Price manipulation by incumbents to deter new entrants - Few competitors
- Equal size and power
- Little Diversity
- Low growth rate
-High costs
- High exit barriers STRONG Price wars Little bargaining power landline phones
- BellSouth Corp. pagers instant messaging clients Wi-Fi Mergers:
AT&T and Cingluar
Nextel and Sprint
DANGER - potential to monopolize the market basic features


technical features



support • Caller ID Line Block
• Call Forwarding
• Call Hold
• Call Waiting
• Caller ID
• No Answer Call Forwarding
• Three-Way Calling
• Voicemail • Internet capabilities
• Detailed Billing either in paper form or downloadable from the internet.
•Camera, most important feature among subscribers.
• Text Messaging, 3 billion wireless text messages are sent each month.
• Web Access
• Insurance to protect yourself in case of malfunction.
• NO Domestic Long-Distance Charges, not available with landlines.
• Ability to Download Ringtones
• Battery Power
• Bluetooth
• Video capability
• Prepaid Minutes
• Ability to Record Music and play it back or use as a ringtone.
• FLASH Memory Cards can hold up to 100 songs and are removable. •Pricing Plans that provide a reasonable amount of minutes and coordinate with the basic and technical features.
•Wireless Service Satisfaction, a strong signal reception for a network is a must to provide the subscriber with clear call quality.
•Wireless Customer Care Performance
•Wireless Retail Sales Locations provide a physical location to get hands on experience with a handset and face-to-face contact with a representative.
•Wireless Phone Handset Satisfaction can offer multiple options from size, weight, design (folding, swivel, rectangular, or sliding can affect the performance) "fewer and fewer substitutes will pose a threat to the industry as mobile phone manufacturers and service providers consolidate more services into their products" so what? Model Show:
Rivalry will intensify
price competition = lower profits
NEED: Differentiation or higher demand
Opportunity for substitutions technology and service advancement
Niche market
Potential for buyer power if demand tapers Phones seem to be absorbing other electronics Drivers of Industry Cost
Bundling - service and accessories
New technology improvement
Develop new products, services, packages
Landline vs. wireless (change in society)
Mergers SWOT Strength
Price
Plan variety
User friendly
Little threat of new firms Weakness
Differentiation
Low quality customer service
Connectivity Opportunities
Innovation: m-commerce
Bundling
Improve customer service
Shift to customers primary phone line
Focus on competitive weapons (bundling, advertising, warranties, technology, customization) Threats
Plateau of a mature life cycle
Price Wars
New Wi-Fi technology
Government regulation
Privacy issues Attractive - yes
Few industries that had tech improvement through recession
FCC freeing up spectrum
Profitable - yes
smartphones
Growth

For current companies not for new entrants i-ndustry analysis Dr. Matus MBA 591 Jaimie Osborn Cell Phone Service Providers SOURCES Leon, Kenneth. "Industry Surveys – Telecommunications: Wireless." Standard and Poor’s. 13 Nov. 2003:1-34.
Technology and Strategy consulting http://www.chetansharma.com/
www.csus.edu/indiv/h/hattonl/industryanalysis.doc
Digital Trends “The Future of Cell Phones.” Retrieved Oct. 13, 2012 from the World Wide Web: http://news.digitaltrends.com
http://www.ctia.org/media/industry_info/index.cfm/AID/10323 227 million Americans own a cell phone:
Over 9-in-10 adults, 7-in-10 teens and 1-in-5 kids
Full transcript