This essay The Cell Phone Industry has a total of 2555 words and 14 pages.
The Cell Phone Industry
According to the Business Dictionary, macro environment is defined as, "the external environment factors that influence organizations decision making and affects performance and strategies and the forces are uncontrollable" CITATION Mac16 \l 1033 (Macro Envioroment, 2016) There are several major macro-economic environment factors; political factors, demographic factors, economic factors, sociocultural factors, and legal factors. These factors are beyond the control of the industry or the individual company. The micro environment on the other hand, is defined as, "factors or elements in an organizations immediate area of operation that affect its performance and decision making freedom. Some of these factors include the following: competitors, customers, distribution channels, suppliers, and the general public" CITATION Mac16 \l 1033 (Macro Envioroment, 2016). Unlike the macro environment which are forces beyond the control of the company, the micro environment is the vice versa and are forces that can be controlled by the business itself.
"The smartphone market is one of the most prominent oligopolies. It is one of the largest and most profitable markets in the world" CITATION Avi13 \l 1033 (A view on the smartphone market - An Oligopoly, 2013). Among the major players in the smartphone industry are Apple, Samsung, Nokia, Blackberry, HTC, Sony Ericson, LG and Motorola.
The most classifying characteristic of an oligopoly is the number of sellers. In the case of the smartphone industry, the number of sellers are small, each of them holding a sizable percentage of the market share, with Apple and Samsung being the dominant players. CITATION Avi13 \l 1033 (A view on the smartphone market - An Oligopoly, 2013)
The Macro Environment of the Cell Phone Industry
Demographic environment. This is the study of composition of the environment on basis of population size, density, age, gender, and occupation. The human population is a very key factor to the youth as far as the cell phone industry is concerned. Depending on the population composition the factor of age, status quo is a factor that most mobile phone companies put as a key factor to determine the quantity of make. "Younger people under 35 are often the first consumers to purchase high-tech products like cell phones, electronic books and video games" CITATION Ric16 \l 1033 (Suttle, 2016).
Since this industry is an oligopoly, but viewing from the line of retail outlets for the cellphones then it's a monopolistic kind of competition. "A monopolistic competition is a market structure where there are many buyers and sellers, there is freedom of entry or exit in to the market and there is slight difference, or significant difference in the end product of competing companies in a certain industry" CITATION Mon16 \l 1033 (Monopolistic Competition, 2016). An example is Samsung and Nokia each produce smart phones, but Nokia uses a Windows operating system unlike Samsung that uses the Android operating system.
"Cellphone owners over a broad range of educational and income levels have similar levels of Android adoption, but those from the upper end of the income and education spectrum are much more likely to own an iPhone. Nearly half (49%) of cell owners surveyed with a household income of $150,000 or more said their phone was an iPhone" CITATION Aya13 \l 1033 (Nanji, 2013).
The political environment. This environment is also very important from company's point of view because marketing decisions are strongly affected by developments in the political environment. It consists of laws, government agencies and individuals in a given society. Any political decision can affect the market. This is a very important factor in the cell phone industry.
"An appeals court ruled on Monday that Samsung's $930 million penalty, stemming from its patent infringement suit with Apple, must be adjusted, in a mixed courtroom outcome for the iPhone maker" CITATION Nie15 \l 1033 (Hughes, 2015). Being the law makers they can make environmentally conducive laws that favors your industry or that negatively affect your industry.
The economic environment. In the words of Grimsley, the economic environment is defined as, "external factors in a business market and the broader economy that may influence a business" CITATION Sha16 \l 1033 (Grimsley, 2016). The economic factors act as external constraints to the business meaning that a company will have