Pestle Analysis of UK Mobile Industry

The United Kingdom plays a very important role in the European mobile market as it accounts for a total of 12.9% market value (Datamonitor 2008). By the end of 2011 the United Kingdom mobile phone market value is estimated to gain a raise of 29.1% since 2006 valuing around $4.4 billion (Datamonitor 2008). The industry boundary could be around the manufacturing and giving the service to the mobile phone as these two complement with each other.

With the increase in the technology there is always a better phone in the market with newer specifications, and because of the attractiveness of the deals the consumers are going for a better mobile all the time even if they don’t use all the integrated applications. On the other hand this market is nearing its maturity which is a superior threat for all the service providers and mobile manufacturers as they need to invest in more and more for research and development. The recent data shows that just in the U.K there are 69.7 million active subscribers for the mobile phones in 2006 which are 9.7 million more than the total U.K population (Mintel 2007). This states the popularity of the mobile phones and the usage.

For any industry to be successful there will be some key determinants of success which helps its growth, and when these determinants come together it could a successful one. And these determinants for the mobile phone manufacturing and service industry could be the Technological, Economical and Social factors. These could be the three main determinants of this industry mainly because all of these complement each other, as the better the technology in a mobile phone the higher the price will be. Even at a high price consumers would tend to buy these phones as for they are getting the latest technology in their hands and thereby they can show off their status.

Technology

In this 21st century the technology is booming and all the companies in any kind of industry would like to use the cutting edge technology for their products or services. As the more technology used in any firm would determine its market capture, its consumers, mainly the price of their products or services. In the mobile phone manufacturing the technology is rapidly increasing. It’s equally important for the manufacturer to produce high quality for the consumer as in the past mobile phones are only used to talk to the other person, now with the growth in the technology consumers can send and receive text messages, they can check their e-mails, take pictures with integrated camera of up to 8 mega pixels, and most wonderfully consumers can video chat.

All of these explain the technological growth and consumers do pay higher prices to enjoy and experience this kind of technology in their palms. The manufacturers on the other hand are not just providing mobile phones which can do only these things; they are also incorporating other things such as touch screen, Bluetooth and infrared connectivity, wireless local area network (WLAN) which the consumers can use for wireless connectivity (internet), watching live TV, mp3 player, and for all these the consumer thinks it is worth paying the price either set by the manufacturer or the service provider.

Economy

The U.K mobile phone industry plays a rather very important role in the economy of the country. The U.K mobile market has generated a total revenue of $3.4 billion in 2006 (Datamonitor 2008) As its been forecasted that the U.K economy to grow between 2.4% to 2.6% between 2007 and 2011 (Key note 2007), but over this very small percentage raise over 5 year period, the consumers are going to lose confidence in the economy but at the same time as the mobile phones are a very essential part of their day to day lives it tends to survive. The mobile penetration rate is also so high that few consumers have more than one phone, or more than one contract or connections and thereby increasing their expenditure.

At the same time the mobile phone industry contributes to the economy by importing a lot of raw materials to be used in the production or manufacturing and also exporting the end products. It also contributes to the economy by increasing the employment rate, the more outlets or offices it opens by creating a series of distributors and retailers the more the more the employment rate will be. If the mobile industry has to go into recession, it has been estimated in 2004 that the total revenue the government could lose could add up to a total of around �9,864 million (O2 2004). And if we take the rate of technology growth from then to now and the price factor into consideration it could have definitely gone higher by now.

Social

Social factors have a very large impact on the industry. The demand levels of the products and the sales are continuously affected by the attitudes and beliefs of the consumers. In addition people have mobile phones not just for communication it also adds peace of mind for the people who care, a lot of people have them as to organise their lives either in a social context or a business context there by making most of their time, and a majority of consumers carry for personal safety. People would like to have mobile phones as they carry them any where they want. It also provides more convenient access to other services like banking, working etc. It also improves social networking as we tend to communicate more by talking rather than just sending e-mails.

Usefulness of External Environment Analysis

Any firm within the industry can increase its chances of competitiveness by doing an external environmental analysis. The managers need to use the information gained by the external environmental analysis for future planning, strategy formulation by making the environment ready for any positive changes and thereby keeping away from the negative ones and better decision making as the external environment is changing continuously. By doing this kind of analysis there is every opportunity for the firm to get its resources ready for the kind of strategy they want to develop. Managers need to keep examining the external environment as it is very dynamic as market conditions change day to day, technology is growing, and there is a prospect for them to know who their competitors are.