As part of my business and economic class, I am required to produce a report that focuses on an analysis of my chosen industry, a profile of the companies that operate in the industry, and a justification for my selection of companies. The industry I focused on is the mobile phone industry. In the industry, I focused on three renowned mobile phone companies. These companies are Apple, Blackberry, and Samsung. In the article, a PESTEL analysis of the three companies has been carried out to indicate their external environments, their customer base, and their market positions.
I chose the above companies as they each represent an industry leader, an emerging company, and the company at risk. As such, Apple is a leader in the mobile phone industry, while Samsung is an emerging company in the industry. On the other hand, Blackberry is a company at risk. Similarly, I selected the above companies because they are the three leading global mobile phone manufacturers in the industry (Cortada 2011, p. 67).
PESTEL analysis of the sector
Political factors refer to aspects such as legal regulations and political instabilities, which affect the day-to-day activities of the business (Dransfield 2004, p. 45). Currently, the leading mobile phone manufacturers have relocated their manufacturing facilities to third world countries. Because of this, the firms must abide by the laws of these countries. These laws stipulate the lowest wage, the maximum working hours, and health and safety regulations. Similarly, the sector has to be watchful for political instabilities. Any political disagreements in any of these nations could have disastrous impacts on the sector (Gong 2013, p. 34).
In the case of an economic depression, the sales of mobile phones are impacted negatively. Most high-end phones are considered luxurious. Therefore, the sector’s sales will significantly drop-in times of inflation. With the current loss of value in the US dollar, companies such as Apple are not in a threat of economic breakdown because they have acquired foreign currency. As such, the decline in the US dollar has augmented Apple’s revenue on the market (Hasan 2013, p. 67).
Owing to globalization, the rate at which humans interact has increased tremendously. The mobile phone industry has played a major role in enhancing these interactions (Henry 2008, p. 165). The sector’s image exhibits the current person’s lifestyle. In this regard, the sociological effects are on benefits to the sector.
The technological environment has expanded considerably in the last few years. Over the last decades, mobile phones have become hot commodities. Similarly, these products are innovative and are short-lived, meaning that consumers have to buy them regularly (Funk 2002, p. 56). Through this, the companies have been able to sell more of their products.
Companies are chosen
Apple is a leader in the mobile phone industry (Arthur 2012, p. 5). Among US citizens, Apple phones are still the most desired consumer electronics. Thus, the company has not lost its ground in the market. In the past year, the corporation gained in market share. In the same year, over 60% of the company’s sales were made outside the US. America. The company has production units in Ireland, China, the Czech Republic, and Korea (Grady 2009, p. 123).
During the last year, the company operated 408 stores in 15 countries. The company’s market capitalization is approximately $445 billion. The company employs 72,000 permanent workers and over 3,000 temporary workers around the world. By the end of the year 2013, the company’s annual revenue amounted to $170 billion. Based on these records, the company can be identified as the most successful phone company of all time.
Samsung is an emerging company in the industry. The company’s major rival is Apple. Although Apple is the most preferred phone in the developed world, Samsung is the most preferred phone in the developing world (Chang 2008, p. 6). The company has production units in South Korea, Vietnam, and China. As of mid last year, the company had over 270,000 employees. Concerning the number of total phone sales, the company has defeated its rivals. In the past year, the company sold a record of 80 million mobile phones. This was an improvement from the previous year’s sales of 55 million mobile phones.
Blackberry is a company at risk in the industry. Its major rivals in the industry include Apple and Samsung (Sweeny 2009, p. 70). As of mid last year, the company had 12,700 employees. The company has production units in America and Canada. For the last three years, the company has been struggling to compete against its competitors but in vain. The company recorded a loss of $646 million in the year 2012. In the same year, its revenue was reduced by 40% to $11 billion. Consequently, the company’s bad performances have led to the speculation that it is destined to its deathbed.
Arthur, C 2012. Digital wars: Apple, Google, Microsoft and the battle for the Internet. Kogan Page. London.
Chang, S 2008. Sony vs. Samsung: the inside story of the electronics giants’ battle for global supremacy, Wiley, Singapore.
Cortada, J. W 2011,Information and the modern corporation. MIT Press. Cambridge, Mass.
Dransfield, R 2004, Business for foundation degrees and higher awards. Heinemann. Oxford.
Funk, J. L 2002. Global competition between and within standards: the case of mobile phones. Palgrave, New York.
Gong, Y 2013, Global operations strategy fundamentals and practice. Springer. Berlin.
Grady, J. D 2009, Apple Inc. Greenwood Press, Westport, Conn.
Hasan, M. R 2013. Apple Inc. – An Analysis PESTEL analysis, Porter’s 5 Forces analysis, SWOT analysis, Comprehensive analysis of financial ratios, and Comprehensive analysis of share performance of Apple Inc. GRIN Verlag GmbH. Munich.
Henry, A 2008. Understanding strategic management. Oxford: Oxford University Press.
Sweeny, A. 2009. BlackBerry planet the story of Research in Motion and the little device that took the world by storm. John Wiley & Sons. Mississauga, Ont.