Business Basic Phone Company: Environment & Strategy Analysis

Introduction and Company Overview

This report is written for Business Basic Phone Company to provide a description of the external environment in which it operates, to describe and analyze any internal or external problems it may be facing, and to address those problems with recommended solutions.

As an important retailer in the mobile phone market, Business Basic Phone Company has been challenged by increased competition as several new competitors have entered the market. Additionally, shifts in the global economy, new requirements from targeted customers, and a need to adapt former retailing methodologies have resulted in declining sales and a shrinking market share over the recent period.

This report will first perform a thorough analysis of the current situation. This will include an internal environment analysis — encompassing a SWOT analysis and a description of the marketing strategies used — as well as an external environment analysis covering technological, demographic, market segmentation, competitive, and other relevant factors. Following this analysis, the report identifies the most pressing problems the company currently faces, including their direct causes, before presenting final recommendations.

The internal analysis of a company is used to identify any relevant weaknesses that need to be addressed and strengths that can be exploited. It also aims to identify the company's marketing strategies and draw relevant conclusions from them.

Internal Analysis: SWOT Diagram and Assessment

Strengths: Well-defined segment of consumers; tailored marketing strategies (the 4Ps) adapted to the targeted segment.

Weaknesses: Not adapted to new marketing and retail requirements — virtually all sales are conducted through traditional brick-and-mortar shops; casual staff employed with low commitment; unsuitable store hours for the targeted customers (9 am to 5 pm).

Opportunities: The market is constantly growing with numerous niche opportunities; the presence of and opportunity provided by the Internet.

Threats: Increasing competition in the mobile phone market; concern over possible health risks and environmental damage; changing types of customers purchasing mobile phones.

In terms of strengths, the most important is that the company has a well-defined consumer segment — customers aged 25 or over who are business-oriented. This means the company has employed a marketing strategy of diversification, choosing to adjust its product to the exact needs of its consumers. The fact that price, product, and promotion have all been tailored to the particularities of this consumer segment further demonstrates this commitment to diversification.

The most significant weakness is the company's failure to embrace new technological trends. It continues to rely solely on traditional retail shops to sell its products, without recognizing that its targeted consumer segment is less inclined to leave the office during working hours to visit a shopping center and purchase a mobile phone. Furthermore, the retail workforce appears in part inexperienced and shows low commitment, particularly during the standard 9-to-5 schedule.

In summary, while Business Basic Phone Company has a well-defined targeted customer base that it serves through a diversification strategy — adapting its promotion and product to consumers' needs — its weakest points are the low quality of part of its human resources and the absence of new technology and modern marketing methods essential in the 21st century.

The following section analyzes each of the four elements in Porter's marketing mix model: price, product, promotion, and place.

Porter's 4Ps Diagram and Analysis

The company markets its products at target prices tailored to its consumers. As previously noted, the target client is aged 25 or over and works in a business environment. For this type of consumer, price is not the primary concern. Such a customer can and will pay a premium if necessary to ensure a product meets the technical and technological requirements of their professional activities.

Given the pricing strategy, the main element in the 4Ps analysis is the product itself. To meet the demands of the target consumer, the product must possess a range of technological characteristics, including:

Mobile Internet and email access; financial information available at dial-touch; user-customizable memory allocation; Enhanced Messaging Service; and strong battery life.

Business Basic Phone Company must commercialize phones that include most or all of these technical capabilities. Devices focused primarily on design innovation are unlikely to satisfy this consumer segment's demands.

In terms of promotion, the company should advertise in magazines, newspapers, and other media most likely to be seen or read by its target consumers. Advertising in business publications would be particularly effective. Radio advertising could also achieve partial coverage, given the amount of time a potential customer may spend commuting. Beyond traditional advertising, word of mouth is increasingly powerful and could prove useful in reaching the business community directly.

The most vulnerable element in the 4Ps is place. Major shopping centers are not locations where businesspeople are typically expected to be found. Moreover, a 9-to-5 operating schedule is poorly suited to the needs of the target consumer: the store closes too early in the day for a businessperson to visit after work, and opens at a time when that customer is already engaged at the office. The company's current approach to the place and distribution element is a significant problem that will be discussed further below.

The SWOT analysis and the 4Ps discussion together highlight the following internal problems:

An unsustainable place policy that is not adapted to the needs of the targeted consumer segment or the requirements of modern retail; and a need to redesign the company's delivery system to incorporate new technologies.