The Cell Phone Market
The Cell Phone Market
The case of Camp Bowie Technologies (CBT) clearly depicts the intrigues of the cell phone industry. In particular, the analysis conducted by John Lane is a summary to some of the main factors that distinguish handset products and the mobile marketplace as a whole. For instance, from his appraisal three issues that can be used to differentiate the market from the purchase of other products emerge. They include user specifications, competition, and product differentiation.
According to the field study that John conducted, it is apparent that user specifications are the biggest determinant of what kind of mobile product to purchase. For example, CBT’s field agents required GPS enabled gadgets so that they could be able to use the company’s customized software. Besides, the field officers made it clear that they wanted a device with a push-to-talk-button. As a result, he made sure that the taste of the user was weighted more than all other features.
In the cell phone industry, the vast number of manufacturers producing similar items is indicative of a stiff competitive environment. Already, trends in the U.S. show that most of them prefer to use operators to help them access customers (Husso, 2011). For instance, in the list generated by John, there are seven companies selling a product that can be used by CBT. As a result, competition in this crowded situation has forced them to hire service providers to enable them to gratify their clients.
Almost all producers of mobile devices make standardized products. As seen in the characteristics illustrated by John, most of them have similar features, although they have some degree of differentiation. As a result, prices are mostly determined by the parent company (price maker), and the degree of uniqueness. For example, BlackBerry phones seem to cost more than those produced by other organizations.
Contrary to what Mary said, cell phones are not commodities. Essentially, commodities are those goods or services that can be easily substituted because they have a slight degree of variation, or because the difference between them is unnoticeable. Conversely, non-commodities are distinct in nature, and a consumer can detect the dissimilarity of products from the experience gained. Similarly, mobile devices are highly differentiated because each company makes products that have specified features. There are many people like Mary who argue that the industry has undergone commoditization due to the high degree of homogeneity (Kushida, 2015). In contrast, there are still numerous quality differences amongst them that are visible. For example, only BlackBerry 8820 has the push-to-talk feature. Moreover, the huge price difference between some of them shows that they are not commodities.
From the analysis of CBT, it is evident that purchasing for a business is very different from regular buying. Unlike customary buying that mainly relies on consumer taste, sophistication, and elegance, sourcing for a firm is largely a contingent of simplicity, affordability, durability, and reliability. Most people tend to prefer items that give them maximum satisfaction, whereas most companies purchase products that guarantee efficiency and maximize profits. For instance, in the memo that Mary sent to John, she insisted that CBT would desire to work with a supplier who can give them a discount. Moreover, in the investigation a lot of significance is accorded to reliability. Evidently, the company wants to migrate from its current provider because its services are outdated. As a result, based on the number of issues a business has to consider, it is likely to take it more time to arrive at a purchasing decision than it will take an individual.
Although John undertook an extensive research to come up with the alternatives that could aid CBT to formulate a purchasing decision, he made some mistakes in awarding the priority weights. Foremost, he erred by giving the greatest priority to the push-to-talk feature. The decision was ironical considering only one option amongst the twelve he proposed had the feature. Also, the function did no add any value to customer service. Consequently, if the company was to rely on it to make its decision, it will automatically have a limited choice. In my opinion, he should have given the highest priority to GPS capability, followed by service provider quality. Additionally, durability and price should have held the third and fourth positions respectively. In doing so, CBT would have more viable and cheaper options to pick from.
All the data John collected is relevant. However, it does not have all the information that can help CBT make the right decision. Paradoxically, he did not conduct an assessment of all the service providers that cover the areas where the company operates. All he did was to give a universal weight of 20 to service provider quality, yet there were many entities competing in this field. Furthermore, each of them had a unique type of care that could impact differently on the efficacy of the field officers. As a result, besides weighing the quality of service provision, he should have investigated all the providers individually to establish the one that is suitable for CBT.
Husso, M. (2011). Analysis of competition in the mobile phone markets of the United States and Europe (Maters Thesis). Aalto University School of Economics, 1-116.
Kushida, K. E. (2015). The politics of commoditization in global ICT industries: a political economy explanation of the rise of Apple, Google, and industry disruptors. Journal of Industry, Competition and Trade, 15(1), 49-67.
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