Phone 4u Essay

In the business world strategic positioning has become unavoidable endeavor as businesses look for every means of enhancing their competitive advantage. Given the nature of the business environment, organizations are forced to exploit various analysis models to understand the external environment in which they operate in. PEST (Political, Economic, Social and Technological) analysis have been utilized by organizations across the globe to determine or predict future trends in business as well as to make preemptive measures to avoid running into losses. Similarly, Phone 4u would immensely benefit from a PEST analysis of the environment in which it operates. Phone 4u is among the leading mobile phone retailer in the UK; its principal competitor

Phone 4u and Carphone control more than 75% of specialist phone retailer revenue.
The political environment of Phone 4u is the manner in which the government influences the company’s operations. Phones sold by the company must meet safety standards set by the government to protect the final user. The government has a responsibility to ensure that the company sells mobile that do not pose health risks to the citizens (consumer protection laws). Consequently, parliament has passed laws specifying the acceptable level of dangerous elements that should be in mobile phones. Furthermore, the government has set laws demanding mobile phone retailers to set up collection centers where consumers can dump their old and disused phones. The government has a mandate to ensure the environment is protected therefore compelling companies such as Phone 4u to be more environmentally sensitive. Furthermore, the government has put in place measures to discourage monopolistic tendencies in the market (high market concentration). This threatens

The country’s fiscal and monetary policies currently in place tries to counter the devastating effects of the crisis. The economic recession led to massive losses of jobs which in turn led to low consumer purchasing power. Mobile phone penetration in the economy in the UK is over 90 percent implying that the market is nearing its saturation level leading to stagnation. Indeed, growth in the mobile phone retail is being driven by the increasing demand for smartphones. Economic experts anticipate that revenue in this economic segment will shrink at a compound annual rate of 1.5% in the next five years because fierce competition between the key players have led to contracting profit margins and fall in the average price of phones. Similar trend in real personal disposable income and consumer sentiment as a result of high inflation and uncertainty in the euro zone have contributed to the tough economic environment for the mobile phone retail segment. Indeed, returns for the industry are projected to contract by 1.4%. The advent of 24-month contracts implies that consumers are holding into their phones for a longer period hurting Phone 4u sales. Nonetheless, Phone 4u performed comparatively well during the economic crunch since it commands a huge market share that enables it to adjust its product mix, pricing promotions and channels to optimize returns. The specialist