Strategic Group Assignment

1. Introduction

The Smartphone industry has come a long way since their entry into the market in the early 1990’s. Initially, Smartphones offered calendars, address books, world clocks, calculators, note pads, email access, fax capabilities and games. Since then, Smartphones have evolved into very small computers along with mobile phone capabilities.

Even though Smartphone users have been able to access the internet and email functions for a while now, the recent addition of software application programs have taken the Smartphone market to a new level. In particular, the allure of “anytime, anywhere” access simply for business is now pressuring all industries to acquire these applications to stay a step ahead of their competition.

2. Porters 5 Forces on the Smartphone Industry

3.1. Threats of new Entrants

3.2.1. Economies of Scale

New entrants with no economies of scale will not survive in the smartphone industry as profits a driven by volumes. Lack of resources and capabilities can also be a barrier to new entrants. The reputation of the company in the smartphone industry is vital in terms of negotiating prices with supplies. According to (google.com), “Due to the size of the big firms such as Nokia, they will have an advantage over new entrants in terms of Economics of Scale. For example, Nokia is able to gain cheaper deals with its suppliers as it has been in the market for a longer period of time. Moreover, financially, Nokia has the advantage as it is able to obtain more funding from banks, shareholders for their research and development”. They need to have specialized workforce, equipment and production process in order to survive. Some resource are not divisible and cannot be compromised, i.e investing on innovation, research & development, and marketing spending to attract the market.

Barriers to entries are high in this industry

3.2.2. Product Differentiation

Environments are constantly changing...