Developing a Business Strategy

Market Selection & Five Forces Strategy Tool
The Intensity of Rivalry
The smartphone manufacturing industry has a high intensity of rivalry based on the rivalry strategy tool. This is because there are many companies that manufacture smartphones and they are all competing to increase their market share of the smartphone industry (Gehani, 2016). The smartphone industry is growing with each passing day making the industry competitive and manufacturers have to ensure that they remain on top or in front of their competitors. There is increasing competition especially from Chinese manufacturers who are developing cheap and high-end smartphones that are attractive and targeted to the low-income earners. This puts a strain on the well-established manufacturers like Apple and Samsung who are left to battle for the top end spectrum of the market. Therefore, for a company to continue leading the smartphone manufacturing industry it should adjust its strategy. Ignoring the emerging market of smartphones would result in a manufacturer losing their market share and allowing rivals to take over. There is a threat of competitor rivalry and any manufacturer should recognize this threat. Porters five forces model reveal whether an industry is truly attractive and they would help investors to anticipate positive and negative shifts in the industry. Smartphone manufacturers have to keep up with the industry growth rates and ensure they remain relevant in the industry. This will ensure that the manufacturer is able to compete and increase their market share in the industry.
The intensity of Supplier Power
According to the rivalry strategy tool, the intensity of supplier power is high in the smartphone manufacturing industry. It is not easy for the smartphone manufacturers to switch suppliers and this means the suppliers have increased power. A majority of the smartphone manufacturers source their supplies from China and this is mainly due to the low manufacturing rates offered in the country. In turn, manufacturers are forced to seek out these suppliers because they cannot be able to manufacture their devices elsewhere at this competitive rate (Oh & Oh, 2017). With the advancements in operating systems like Android and iOS, the chip makers have managed to increase their power over the manufacturers. This is mainly because the manufacturers are more dependent on the chip makers to develop chips that will work seamlessly and effectively with the new OS. There are also a limited number of suppliers for smartphone chips making the manufacturers dependent on the few who are available. This limits the options in the industry and reduces the power of the manufacturers in changing suppliers. The suppliers for the high-end smartphones are quite specialized meaning they have more bargaining power over the manufacturers.
The Importance of Correctly Identifying and Choosing A Firm’s Industries and Markets
In order for a firm to compete and succeed it needs to choose the correct industry and markets that is should participate in. This will ensure that the company is able to remain viable for future business share. A company should be able to recognize change and identify strategies for adapting to these changes. Any manufacturer who underestimates the value that consumers place on new smartphones and fails to act on this value will end up losing their market share. This is well demonstrated by what happened to the Nokia. The company failed to adapt to the changes taking place in the market and this resulted in the company being sold for a paltry sum of 5.5 billion euros. Nokia's greatest downfall was that the company failed to recognize the change in the smartphone industry. Choosing a firm’s industries and markets allows the firm to analyze and understand its competitors. This also gives the firm an opportunity to conduct a SWOT analysis in order to determine and gauge its competitors in the industry. With a better understanding of the market and industry, a company is able to formulate a strategy that will result in success for the company. Google and Apple were able to easily take over the smartphone market from Nokia by introducing devices and features that resonated well with the consumers (Vuori & Huy, 2016). Nokia failed to notice these new entrants and it also failed to change its strategy in order to fight off the new entrants, which resulted in Nokia going down.
Accounting for Gaining and Sustaining Competitive Advantage
It is vital for a company to develop a competitive strategy in order for it to remain relevant in the present business environment. The competitive strategy will determine the position of the company in respect to other companies in the industry. A company that is able to determine its growth and account for this growth means that it understands its market and its consumers' preferences. Without this accounting, a company will continue thinking that it is able to compete in the industry while it has been overtaken by its rivals or new entrants. Therefore, the success of any business strategy development will be dependent on a company being able to determine how it can increase its competitive advantages. Accounting for gaining and sustaining competitive advantage allows a company to look at the market and industry it is taking part in to determine its performance as compared to that of its rivals. This accounting will be beneficial to the company in that in case of a loophole in its strategy it can be discovered early and strategies for sealing this loophole developed. Failing to conduct any accounting means that the company will continue with its operations assuming that the business is doing fine and its products are still liked and purchased by the consumers. By the time a company discovers that its strategies are not working it might be too late for it to recover.


References
Gehani, R. R. (2016). Sensemaking corporate brand values in the smart-phone industry. SAM Advanced Management Journal, 81(4), 37.
Oh, Y., & Oh, J. (2017). A critical incident approach to consumer response in the smartphone market: product, service and contents. Information Systems and e-Business Management, 15(3), 577-597.
Vuori, T. O., & Huy, Q. N. (2016). Distributed attention and shared emotions in the innovation process: How Nokia lost the smartphone battle. Administrative Science Quarterly, 61(1), 9-51.