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Pest Analysis Of Phone 4u

1123 words - 5 pages

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 is Carphone Warehouse. Phone 4u specializes in selling feature phones and smartphones sourced from all major manufacturers; it also deals in mobile phone accessories and tablet computer devices. 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 Phone 4u’s market share, sales and revenue. In addition, the government has drastically cut its expenditure in response to the Euro crisis; government departments’ demand for Phone 4u products has shrunk. The government was a major customer and the company will experience decreased sales in the short run. The electronic commerce (EC directives) regulations of 2002 affect the company’s online business. Given the intense competition between the major players in the industry, the companies engage in intense marketing. The government has set advertisement standard to ensure that the company does not carry out marketing campaigns that contravene the values and norms of the society. For example, in 2011 the company carried out an advertisement dubbed Dubby Christ but outcry that it belittled and mocked Christian beliefs led to its ban by the Advertising Standards Authority. The deregulation of the mobile phone industry in the European Union is likely to increase competition as new competitors will easily...

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