Business Plan
Name
Faculty of Arts and Humanities
Module Title: Creative Enterprise
Module Code: A303PA
Due Date
Word Count: 2019 words
Outline of Idea
The Coventry Smartphone company was incepted in 2022. The company deals in designing, developing, manufacturing, and selling high-end smartphones, with outstanding features that would meet the current dynamic needs and specification of the United Kingdom tech market. Headquartered in Coventry, UK, the company is a sole proprietor, ran by its founder. The company strives in a vision to inspire the world and create a future through innovative product designs and technologies. Since its inception in January, 2022, Coventry Smartphone company has demonstrated tremendous growth in the global market for smartphones. This has attributed to its loyal customer base, strong brand image, a wide range of product portfolio as well as a robust presence in the UK market. Even though Apple and Samsung-the leading competitors of Coventry electronics, the enterprise continue to boast as a new leader in the United Kingdom’s Smartphone market. Currently, the company proves to enjoy over 18 percent of global shipment compared to Apple’s 11 percent of Smartphones shipped in the UK (Ahmad and Zhang, 2022). Consequently, despite the intense competition in the UK market, especially from Apple Inc., Coventry Smartphone company has maintained its strategic position in the UK market due to its products’ low switching cost for customers in addition to its strong bargain for consumers compared to its competitors.
The introduction of modern technology, including the diffusion of the internet, has increased the demand for electronic devices, like smart phones globally. The growth in the demand for smartphones, not only in the UK, but globally, has been also associated with the extensive use of social media, especially among the youth (Ahmed, Gull, and Rafiq, 2021). Customers are vital to the success of any business. Key players in the tech market are increasingly researching to understand the dynamic needs of customers, including their preferences for smartphones. Recent reports have shown that smartphone consumers desire products that have higher specifications. From the research about the new Cov-II Fold phone, it is evident that the major determinants for the global demand for smartphones, and which shape the company’s marketing strategies. These include the rising disposable income, the growing penetration of the internet, increased awareness of the emergence of new technologies among customers, the surge in the demand for gaming devices as well as the booming demand for eCommerce (Manorek, 2016). Even as Coventry electronics strives to invest heavily in research and development, in producing third-generation smartphones that are highly competitive in the industry, it is evident that the progressive advancements in technologies are likely to affect its performance (Ahmed et al., 2015). The UK industry is characterized by market entrants who are taking advantage of modern technology to duplicate Coventry electronics smartphones. This factor will threaten the demand for the company’s products in the UK industry, thus affecting its profitability and market share.
The new Cov Fold II phone is a third generation folding phone-tablet hybrid is considered as a technological ace. It has a larger memory space, faster processor, and has been more refined, compared to its predecessors. Additionally, the internal screen is designed a way that is much smoother to the touch than the previous Fold I, thereby allowing the users’ fingers to glide over its surface more easily. The hinge that allows the phone to be folded into a tablet allows it to be displayed at a range of angles, meaning that the user can stand it up on its side or end for watching videos or performing similar tasks. Moreover, the product is water proof, lighter, and a quite slimmer in all directions. With the new IPX8 water resistance rating, the smartphone is a big durability upgrade and implies that it will survive dips into water up to 1.5 meters deep (Vinodrai, 2017). In simple terms, it is considered a revolution in the smartphone market as it meets the dynamic needs and specification of customers. It is suitable most for the young generation, with a preference of style and a tremendous social media experience.
Rationale of Idea
A rationale for choosing the product is the focus-cost strategy. The focus-cost strategy is similar to the cost-leadership strategy. However, the difference between the two emerge whereby in contrast to a cost-leadership strategy, companies using the cost-focus initiative tend to focus on a specific market niche either by relying on the concept of industry or geography (Vinodrai, Gertler, and Lambert, 2017). Using the cost-focus strategy, Coventry electronics will ensure that it becomes an expert in delivering services and products for that market. This implies that for the new product to enter the market and obtain maximum revenue, the firm must embrace a focus -based strategy in which it has designed its products to meet the young generation needs (Ahmed et al., 2021). By focusing on this niche market, Coventry will not only increase its profitability, but has also increase its market share within the sporting industry as more athletes and sporting companies are increasingly preferring the company’s devices.
Coventry electronics strives to produce new services and products which meet the dynamic needs of customers within the young population. Differentiation, that is compelled through innovation is crucial for its strategic success as it creates opportunities for product diversification. Product dimension and diversification enables the firm to develop products in various line of businesses, instead of a single line of business (Rothwell, 2014). Significantly, this will allow the company to attract potential consumers in emerging markets and retain those in existing markets, thus increasing their market base in the global market (Hoegl & Gemuenden, 2011). An innovative culture empowers entrepreneurs with leadership skills that move organizational members towards corporate success. This will ensure that the company’s executive team identifies essential organizational values and determine the values that are appropriate for the workforce towards the company’s economic success (Roth et al., 2019). Consequently, coupled with the innovative approach, Coventry electronics should employ a broad differentiation approach which will enable it to realize a competitive edge over other companies, as well as a profitable share in the UK technological market.
Market Research
According to Tobias (2013) a company’s success in innovation is measured through quantitative and qualitative metrics. With the management’s effective decision making -process, the new innovative team at Coventry electronics should strive to improve its customer engagement and experience, thereby developing the company’s brand in which it will attract more potential customers. For example, through informed decision making, the company can realize its organizational performance (Tobias, 2013). Last quarter of the 2022 financial year, Coventry electronics’ qualitative measure-the idea that by adding features to the existing Cov-Fold series, the company will realize a shift Samsung’s brand image towards an innovative, digital brand-helped the company attain positive outcomes (Ogink and Dong, 2019). With its current business and strategic model, the company should develop a strategic plan that develops and fosters long-term relations with customers through their interaction on its website that would provide effective customer feedback (Thierry and Lescop, 2019). Furthermore, the introduction of the Cov-II-Fold phone will ensure that the firm retains its the loyal customers. The company should also focus on attaining a forty percent increase in e-commerce sales and grow its Facebook fans to over 2 million fans. The launch of the new device will also ensure that Samsung grows its profits to over USD 239 million dollars from last quarters of the financial year.
Previously Coventry electronics was renowned to manufacure electronic gadgets that were imitative and inexpensive. However, the emergence of the digital edge led its executives to value innovation which subsequently helped the firm develop products that featured reliability scale and speed (Vinodrai, 2017). As a result of manufacturing high-end devices, the marketers set prices and introduced more features to these electronics according to the dynamic needs of other companies and customers. Coventry electronics innovation over the last decade has enabled it to grow its revenues from nearly USD 24 million in the first quarter to over USD 30 million in the current quarter. Furthermore, its sales growth reached 2.78 percent in 2020 compared to -5.48 percent in 2022.
SWOT Analysis of Coventry’s Cov-II Fold Smartphone
- Strengths
Coventry electronics has been renowned for its innovative designs. The corporation offers a wide range of designs, unlike its competitors such as iPhones and Galaxy series, by its competitors, Apple and Samsung, respectively. Coventry electronics also has an integration of open-source software and operating system that gives it a competitive edge over its competitors such as Apple Inc. The company’s need to adopt the open-source operating system as a strong strategy was designed to function the same way the Android Operating System. According to Coventry electronics CEO, the world is currently moving with Android opensource operating system. The company’s move to use the technology was due to the fact that most companies are employing the Android Open-source operating system as it offers additional software, options and features.
- Weaknesses
Among the company’s weaknesses include its low-profit margin. Coventry electronics has always maintained a low-profit market owing to the stiff competition. Within the information technology industry, there are numerous companies offering a robust competition for the firm’s products (Meghisan and Bodog, 2020). An examination of the industry’s prices for smartphones depicts that Samsung Galaxy Z Fold 4 Mobile Phone Price in UK is GBP 1536 while iPhone Pro Max goes for GBP 1142. For Coventry electronics Cov-II-Fold, it will be sold at GBP 1056 in order to increase the company’s revenue and gain a larger market share than its competitors. This implies that Coventry electronics will face challenges related to offering similar prices to those set by its competitors. As a result, the company will seek to offer slightly lower prices to retain its customers and attract potential customers to buy its latest smartphone. However, this strategy will significantly affect its market position and profitability margins, thereby affecting its market share in the UK market.
- Opportunities
There is an opportunity for Coventry electronics to expand its market to emerging markets in India and Africa. Globally, and especially in developed countries, individuals are increasingly becoming more tech-dependent and are using smartphones as the most preferred means of communication. With the rising demand of smartphones, there is an opportunity for the firm to produce more devices to meet the rising demand of electronic gadgets.
- Threats
One of the main threats for Coventry is a large number of competitors within the industry the
market for smartphones and IT devices is saturated whereby the firm has many competitors. The stiff competition comes from companies such as Samsung, Apple, HTC, Microsoft and Google, which have formed the largest competitor base for the corporation. Alongside the threat for increased competition, there is also another threat wherein Chinese Competitors are increasingly gaining competitive edges over other companies (Thierry and Lescop, 2019). The stiff competition from Chinese companies owes to the fact that firms in Chinese can produce quality products at low prices, hence most consumers around the world are preferring brands from Chinese corporations spontaneously.
Budget and Resource Analysis
In efforts to enhance its R&D strategy, geared to continuously improve innovations, the company has set up over 34 R&D centers around the globe. For instance, last year, Samsung reported having spent over USD 15 billion, which accounted for the second-largest amount spent in R&D across the world (Vinodrai et al., 2017). Accordingly, the substantial expenditure in the new Samsung product is directly correlated to Samsung’s substantial revenue growth and expansion into other markets not only in the UK but also globally. The Cov-II-Fold will cost for £1056 ($1,799/A$2,499), which is £200 cheaper than last year’s model, although still very expensive. It joins the £949 Cov-I and £1,149 Cov-Ultra at the top of Coventry’s smartphone line. For the corporation to realize considerable sales revenue, it would have to sell over 2 million Cov-II-Fold phones. Furthermore, the production cost for the phone will be estimated at USD 373 to help the company realize a profit margin of about 55.01 percent.
On the other hand, the company should develop a robust global presence wherein it has established a strong brand image. Millions of smartphone users in the UK trust the firm for its quality products and efficient services. Likewise, the global presence has attracted potential customers, thus helping Coventry to establish a more extensive loyal customer base. A recent survey of Coventry electronics retailers across the United Kingdom indicated that the company has its follower base, which consists of users who typically wait to shop for the new products released.
References
Ahmad, R. S., & Zhang, Y. (2022). An empirical study of smartphone-based tracking devices and analysis of its demand & market. International Journal of Economics Commerce and Management, 2.
Ahmed, Z., Gull, M., & Rafiq, U. (2021). Factors affecting consumer switching behavior: Mobile phone market in the Manchester-United Kingdom. International Journal of Scientific and Research Publications, 5(7), 1-7.
Hoegl, M. & Gemuenden H. G. (2021). Teamwork Quality and the Success of Innovative Projects: A Theoretical Concept and Empirical Evidence. Organizational Science, 12(4), 393-521. https://doi.org/10.1287/orsc.12.4.435.10635
Meghisan, G., & Bodog, S. (2020). Mobile Telecommunications Market Analysis. Annals of the University of Craiova, Economic Sciences Series, 1.
Ogink, T., & Dong, J. Q. (2019). Stimulating innovation by user feedback on social media: The case of an online user innovation community. Technological Forecasting & Social Change, 144(1), 295-302. doi:10.1016/j.techfore.2017.07.029
Roth, E., Metzeler, F., & Banholzer, M. (2019). Fielding high-performing innovation teams. Retrieved from https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/fielding-high-performing-innovation-teams#.
Rothwell, R. (2014). Towards the Fifth‐generation Innovation Process. International Marketing Review, 11(1), 7-31. https://doi.org/10.1108/02651339410057491
Thierry, I., & Lescop, D. (2019). Open innovation within business ecosystems: a tale from Amazon. com. Communications & stratégies, (74), 37. retrieved from: https://ideas.repec.org › idt › journl
Tobias, K. (2013). Entrenched in the digital world. Business Today. Retrieved from https://www.businesstoday.in/magazine/lbs-case-study/burberry-social-media-initiative/story/191422.html
Vinodrai, T., Gertler, M. S., & Lambert, R. (2017). Capturing design: lessons from the United Kingdom and Canada. Science, technology, and innovation indicators in a changing world, 65-86.
