This document discusses Porter's Five Forces and Value Chain models in the context of analyzing the mobile phone industry. It provides descriptions of each of the elements in the Five Forces model - rivalry, threats of substitution, bargaining power of suppliers, bargaining power of customers, and barriers to entry. It then explains each step in the Value Chain model - inbound logistics, operations, outbound logistics, marketing and sales, service, procurement, technology development, human resource management, and firm infrastructure. The document concludes that applying these models helps mobile phone companies identify strengths, weaknesses, and how to differentiate their products to add customer value at each step of the chain.

1. PORT E R ’ S F I V E FORCES
&
VALUE CHAIN
A Description on Mobile Phone Industry
[GP02153 TU6414]

2. A mobile phone company
PORTE R ’ S F IVE FORC E S

3. INTRODUCTION
 Porter’s Five Forces methodology and a
tool used to analyze the business strategies and
to understand where power lies in a business.
This tool is a handy method to assess how each
of the market drivers impact the mobile phone
companies.
 Suitable business strategies can be devised
based on the analysis. Further, mobile phone
company are known to study the markets they
want to approach thoroughly before they make
a move and it is in this perspective that this
analysis is undertaken.

4. FIVE FORCES FACTORS

5. Elements :
 Industry growth
 Informational over complexity
 Fixed costs/value
 Switching costs added
 Intermittent over capacity
 Product differences
 Brand identity
 Concentration and balance
 Diversity of competitors
 Corporate stakes
 Exit barriers
RIVALRY
 Mobile phones industries are engaged in fierce competitive rivalry. It makes
mobile phone companies cannot take its position in the market for granted as all these
where margins are tight and the competition is intense. Apart from this, they faced the
equivalent of the “Cola Wars” (the legendary fight for dominance between Coke and
Pepsi) in emerging markets like India where they have to compete with multitude of
players domestic and global.

6. ELEMENTS
 Substitute performance
 Cost of change
 Time and cost of entry
 Need specialist knowledge
 Economies of scale
 Cost advantages
 Technology protection
 Barriers of entry  Numbers customer
 Size of order
 Differences between
competitors
 Price sensitivity
 Changing cost
 Numbers of supplier
 Supplier size
 Ability to substitution
 Standard of service

7. ANALYSIS
 As the diagram above indicates and present the
relative strengths and the weaknesses of each element,
we can now conclude this analysis with the theme that
as the global economy integrates and more emerging
markets open up, companies like Samsung are at an
advantage because they have already established
themselves in many markets. However, it must also be
noted that each market is unique and hence, a company
must not adopt a one size fits all strategy and instead,
must approach each market differently. In conclusion,
Samsung can take pride from the fact that being an
Asian conglomerate, it has managed to break into and
hold its own against many western multinationals that
have been in this business for decades.

8. A mobile phone company
PORTE R ’ S VALUE CHAIN

9. INTRODUCTION
 Michael Porter’s Value chain concept is a valued concept in today’s market
because since it tells us to differentiate a products by analyzing the chain of events..
 The value chain concept can be a reference model for Holistic marketing and
there is a chain of events which occur in a company right from the procurement of raw
materials to the delivery of goods as well as the post sales service. This chain is made
up of 9 steps and the process can be changed in any of the nine steps to add further
value to the final product. If a company wants to add customer value in all the
processes that it does, it has to refer to the Value Chain.
 The Value chain contain of total 9 steps. The first 5 are the primary activities
which are the basics in any company and are the activities which provide strength and
sustainability to the company. The remaining 4 are the support activities or also known
as the secondary activities and these are used by the company for differentiation as well
as maintenance of the organization. Both, the primary as well as the secondary activities
are necessary for the firm to survive.

10. P O R T E R ’ S G E N E R I C VA L U E
CHAIN

11. DESCRIPTION
 Inbound logistics – this is about bringing raw material
from source to the company. This value helps
enhancing the quality of raw material as well as
optimizing the cost of inbound logistics.
 Operations – all operations related in converting the
raw material to finished goods is the job of Operations.
The customer value is increased majorly in this step if
the operations are up to mark and the product is
manufactured in the right manner and meets quality
standards.
 Outbound logistics – Sending finished goods from
manufacturing point to distributors and retailers.
Outbound logistic should be done in minimum cost
and the product is delivered to end customers with
minimum affect to the quality of the product.
 Marketing and sales – The marketing and sales apply as
the strategy to increase the sales of the product. The company
exists to make profits and if profits can be increased by
marketing and sales, than the company has to use these tools.
 Service – in mobile phone industry, the post sales service is
the most important because it directly affects the word of mouth
publicity of the product. If the service is not up to mark, no one
will buy the product and the brand will lose market share and
may be taken out of the market eventually.

12.  Procurement – The management of vendors and the procurement of the raw material on a timely basis is
where procurement comes in.
 Technology development – Keep product updated as per the latest technology.
 Human resource management – The right people in the right place can make all the difference for the
company and hence the HR department is a support activity most important for the firm.
 Firm infrastructure – Without a proper infrastructure, and lack of government handling or legal support, a
firm might face a big hurdle. Similarly, administration department will help in maintenance of the facilities in a
firm.

13. FINDINGS
 As the new era raised in the new marketing field, with the mostly used of retail and e-commerce,
companies have realized that your value chain will be further strengthened if
you have better co-ordination between all the departments. Thus, the concept of holistic
marketing will further strengthen your value chain.
 In such a case, a mobile phone company need to ensure that all your primary activities
have an open door policy for people from secondary activities and vice versa. Thus,
logistics should interact with procurement and sales with HR. If the important people in
your organization interact with other equally important people of different departments,
there is nothing that will stop value addition to the end product in your organization.

14. THANK YOU