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Smartphone Macro-Environment Analysis in the UK

Introduction

Consumers of handheld devices and mobile phones can benefit from the wide range of features associated with them today. Since 2007, millions of users have been able to “experience the functionality of personal computers on pocket-sized devices” (Rakestraw, Eunni, & Kasuganti 2015, p. 2). Such smartphones deliver numerous applications and software functions that can help people pursue their goals. Statistics indicate that over 15,000 new applications are innovated and made available to more users every week (Rakestraw, Eunni, & Kasuganti 2015).

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Smartphones in the United Kingdom have outsold other devices such as computers and tablets. An analysis of the microenvironment of these devices in the United Kingdom (UK) can support the performance of many marketers and manufacturers in the country. This is the sole purpose of this research study.

Macro-Environmental Analysis

PESTEL Analysis

Political Factors

The UK government has been dictating the performance of the smartphone industry. For instance, the government provides licenses to different companies to either manufacture or market smartphones in the country (The UK is now a smartphone society 2015). Companies and marketers pay huge amounts of money to get such permits. This situation explains why newcomers find it hard to join the industry.

However, some small-scale businesses have managed to market their smartphones in the country. The government has been observed to restrict the use of the internet. This restriction is considered in an attempt to monitor the content available to more users (Global mobile consumer survey 2016: UK cut 2016). Recently the government supported the use of ISP to filter the information accessed via different networks (The UK is now a smartphone society 2015).

On the other hand, the current political climate in the country continues to support the performance of many players in the smartphone market. However, the country’s exit from the European Union (EU) is expected to affect the performance of many smartphone manufacturers in the country (Mort & Drennan 2007). This decision will make it impossible for manufacturers to market their products to more European consumers.

Economic Factors

The United Kingdom is one of the economically stable nations in Europe. This fact explains why the smartphone industry has continued to play a key role in the country’s economy. Marketers and manufacturers of superior handheld devices are finding it easier to attract more customers in the country. The economic strength of the country attracts investors from different parts of the world. More citizens can pursue their goals and earn better incomes (Nagarkoti 2009). These changes and developments explain why the industry will grow in the future. Many network providers such as Vodafone have presented new options for accessing the internet.

Social Factors

Many people are using their handsets to pursue a wide range of objectives and activities. In the United Kingdom, such devices provide convenience to consumers who want to network and communicate with their loved ones (I-Phone in the Mobile Phone Market in the UK 2014). Cell-phones have become a unique aspect of life in many nations across the globe. The increasing use of social networks such as Facebook, Instagram, Twitter, and Pinterest explains why more people will be using smartphones in the future.

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Such devices deliver the most desirable convenience and efficiency to more people. Rahim et al. (2016) argue that such smartphones are making it easier for many citizens to access insurance, medical, and banking services. These trends associated with the social environment explain why the industry is promising.

Technological Factors

Technology is one of the major forces driving the smartphone industry in the world (I-Phone in the Mobile Phone Market in the UK 2014). The availability of advanced technologies in the United Kingdom is making it easier for many manufacturers to produce superior handheld devices. Network providers in the nation are engaging in continuous research and development (R&D) to improve these smartphones.

Many producers are collaborating with software engineers to include better graphics and features in their products (Rakestraw, Eunni, & Kasuganti 2015). Technology has been observed to deliver new applications such as 4G and Bluetooth services. The availability of these functionalities is making it possible for more people to communicate and share content effectively. Consequently, the number of users of smartphones is expected to increase significantly in the future.

Environmental Factors

Nagarkoti (2009) indicates clearly that many citizens in the United Kingdom are sensitive about the sustainability of the natural environment. Consequently, manufacturers of smartphones in the country have been forced to produce quality devices that are sensitive to the issue. This fact explains why several manufacturers and marketers in the country have been promoting various sustainable practices.

A good example is the use of awareness campaigns to support the integrity of the natural environment. The government monitors the performance of many corporations in the country to ensure they engage in sustainable business practices. Companies that fail to engage in corporate social responsibility (CSR) in the country might find it hard to deal with the increasing level of competition. Smartphone manufacturers in the UK have been focusing on this issue to ensure their brand images remain relevant in the market.

Legal Factors

The UK government implemented several policies to safeguard its citizens. For instance, the legislation focusing on the safety and health of more consumers is taken seriously in the country. Manufacturers of mobile phones must ensure their products promote the safety of the targeted customers. The government recently adopted the Minimum Wage Policy (Rakestraw, Eunni, & Kasuganti 2015). This policy has the potential to affect and influence the performance of every organization.

The Most Important Factors

The nature of this market segment dictates the major forces that will affect it in the future. The first most important factor in this industry is that of technology. The main driving force in the smartphone industry is the rate at which new technologies are emerging. Competing firms such as Apple, Nokia, and Samsung are focusing on R&D to achieve their potentials. Consequently, the firms have revolutionized the usability and effectiveness of different applications (Mort & Drennan 2007).

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New technologies such as Android, Windows, and iOS operations systems are transforming the effectiveness of these smartphones. Manufacturers are in the constant rivalry in an attempt to achieve their potentials. The increasing level of rivalry has ensured that new technologies emerge every day. Companies that fail to compete in the technology race might eventually become obsolete (Nagarkoti 2009).

The second critical factor is the social environment. Emerging trends and behaviors such as the use of social networks are dictating the use of smartphones. The United Kingdom is characterized by people from diverse backgrounds. Manufacturers should be aware of this diversity before marketing their products to the people. The expectations of the Millennial Generation and the elderly should also be taken seriously. The social aspects of the UK population will significantly dictate the performance of more companies in the smartphone market segment (The UK is now a smartphone society 2015).

How the External Environment Will Affect Smartphone Manufacturers

Smartphone manufacturers in the UK will have to consider the above six forces of the external environment. This is the case because such factors will in one way or the other influence their business strategies. To begin with, the manufacturers will have to consider the political forces experienced in the region. For instance, the taxation policy and disengagement with the EU will have significant implications on business activity in the region.

Smartphone manufacturers should design the most desirable business models to overcome these changes. The taxation policy implemented in the United Kingdom will affect the profitability of many exporters of smartphones (Rahim et al. 2016). That being the case, local manufacturers might find it easier to achieve their goals.

The economic position of the UK has been promising. Issues such as foreign exchange rates and inflation do not appear to threaten any business activity. Many consumers have higher disposable income thus making it possible for many firms to realize their potentials. The favorable economic climate associated with the UK will support the performance of many companies. The country is characterized by an increasing number of elderly citizens.

This issue explains why the demand for smartphones is expected to change in the future. Manufacturers of smartphones should identify new strategies to attract more youths (Rahim et al. 2016). The growing number of social media consumers should be considered by these manufacturers. This strategy will make it easier for them to design sustainable marketing procedures.

The increasing level of competition should be considered whenever considering various technologies. This idea will make it possible for the manufacturers to select and use new technologies capable of supporting their goals. The firms should be aware of every new technological development in the market (The UK is now a smartphone society 2015). The strategy will make it easier for more manufacturers to deal with competition and eventually become profitable.

The major manufacturers of smartphones and handheld devices can consider the environmental issues affecting the industry. To begin with, they should focus on the major policies that the performance of different companies. The approach will make it easier for more manufacturers to identify the best procedures for having sustainable businesses. Companies that will be on the frontline to implement sustainable business practices will eventually emerge successfully.

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The concept of CSR should be considered by firms that want to attract more business partners. Adherence to environmental practices will make it easier for more companies to achieve their business potentials (Rahim et al. 2016). This move will play a positive role in attracting more customers. The consumer will examine the manufacturer’s approach to sustainability before purchasing any product.

Legal factors should also be examined by companies that want to emerge successfully. The UK government has a wide range of policies aimed at protecting the welfare of business organizations and consumers. To succeed in the industry, manufacturers of smartphones should pay competitive minimum salaries to their workers and implement sustainable practices (Rahim et al. 2016). Consumer rights should be taken seriously by smartphone producers to survive in the market. Such measures will support the business models of many corporations in the industry.

Conclusion: Critical Macro-Environmental Factors

As mentioned earlier, some factors will have greater impacts on the UK’s smartphone industry. Such factors appear to dominate because they dictate the major aspects of the industry. Technology is what has supported the production of better handheld devices (Global mobile consumer survey 2016: UK cut 2016).

Companies that have access to new technologies will find it easier to compete in the industry. This is the case because such companies will produce competitive devices that offer advanced features and apps (Rahim et al. 2016). Many manufacturers of smartphones in the United Kingdom such as Vodafone, Vertu, Bullitt Group, and Binatone are considering emerging technologies to realize their business potentials (Vodafone 2016). Companies that use modern technologies to deliver advanced apps will find it easier to achieve their business potentials.

Social factors will have a great impact on many smartphone manufacturers in the country. Human behaviors such as socialization and communication have changed significantly within the past two decades. Mobile phones are encouraging more people to communicate with one another without having to travel from point A to B. The emergence of social media platforms has transformed this kind of communication. Smartphones have improved the scenario by making it possible for people to share their ideas and moments (Rahim et al. 2016). The future smartphone consumer will be keen to purchase a device capable of supporting his or her social needs (We Are Apps 2013).

Marketers and manufacturers of smartphones should monitor the changing demographics to produce devices that address the needs of each group (Vodafone 2016). In conclusion, smartphone manufacturers in the nation will be forced to consider these forces of the macro-environment to produce competitive products that resonate with the needs of the targeted consumers.

References

Global mobile consumer survey 2016: UK cut 2016. Web.

I-Phone in the Mobile Phone Market in the UK. 2014. Web.

Mort, G & Drennan, J 2007, ‘Mobile communications: a study of factors influencing consumer use of m-services’, Journal of Advertising Research, vol. 47, no. 3, pp. 1-9.

Nagarkoti, B 2009, ‘Factors influencing consumer behaviour of smartphone users’, ARCADA, vol. 1, no. 1, pp. 1-42.

Rahim, A, Safin, S, Kheng, L, Abas & Ali, S 2016, ‘Factors influencing purchasing intention of smartphone among university students’, Procedia Economics and Finance, vol. 37, no. 1, pp. 245-253.

Rakestraw, T, Eunni, R & Kasuganti, R 2015, ‘The mobile apps industry: a case study’, Journal of Business Cases and Applications, vol. 1, no. 1, pp. 1-26.

The UK is now a smartphone society. 2015.

Vodafone. 2016, The internet economy in the United Kingdom. Web.

We Are Apps. 2013, UK mobile devices usage and demographic roundup. Web.

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