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Running head: BUSINESS STRATEGY

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Market Selection and Five Forces Strategy Tool in the Smartphone Industry
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BUSINESS STRATEGY

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Market Selection and Five Forces Strategy Tool in the Smartphone Industry
Intensity of Rivalry
The intensity of rivalry in the smartphone industry is high because customers are
attracted to smartphones that offer the latest technologies. The major competitors in the industry
include: Apple, Samsung, Huawei, Oppo, Xiaomi and LG, with Samsung having shipped the
largest number of smartphones in the first quarter of 2016. This implies that customers prefer
brands that are easily recognized and offer a lot of benefits to users in various locations.
Consequently, smartphone makers are opting for Asian markets because they have more growth
potential compared to the North American and European markets. Therefore, these changes
allow smartphone makers to invest in powerful marketing strategies that enhance the appeal of
their products in various locations where they are sold (Triggs, 2016).
It is also worth noting that the industry growth rate in North America and Europe has
slowed to less than 4.3 and 5.5 per cent respectively, which has affected the operations of major
smartphone makers. Asian smartphone makers such as Oppo, Xiaomi and Vivo have
significantly reduced the market shares of large smartphone makers such as Apple, Samsung,
Sony and HTC. Considerably, high costs that are experienced in the industry are associated with
research and development, but low production costs allow firms to obtain high revenues from
sales (Titcomb, 2016). On the other hand, exit barriers in form of high licensing fees and high
capital investments compel firms to focus on other metho...