Introduction
Technologicaladvancements in recent years have redefined the traditional perception of
communications. In this regard, regular telephones had limited accessibility due
to a high cost of installation and maintenance. Telephones were reserved for
the wealthy institutions and upper-class elite individuals of the society. Such
people had enough financial resources to afford he technologies then. With the
advancement in telecommunication and the introduction of mobile technology, the
cost of production of mobile phones have significantly reduced due to the
emergence of competition in the mobile industry as well as adequate financing
of mobile manufacturing organizations. The introduction of smartphone
technology has further complicated the telephone industry by integrating
additional features to the traditional telephone reserved for audio
communication. Modern devices have varying prices depending on market forces.
Also, consumer tastes have changed with the younger generations (youths and
teenagers) having higher preferences for stylish, smartphones with greater
computing capabilities, multitasking capabilities, and well-designed
applications.
Basic concept and industry analysis
The
cut throat competition for existing markets has made players in the mobile
industry to invest more in improving product designs. The players also have
many invention and innovation with an aim of remaining relevant as well as
establishing and maintaining market domination as determined by the consumers.
Currently, it is estimated that more than 100 billion people have subscribed to
use mobile devices for daily communication. The consumption of mobile
electronic devices have ceased from being used by elite wealthy and are now
being used by small class individuals.
Due
to easy affordability and development of advanced smartphones by numerous
companies, phone-manufacturing firms have shortened the production life cycle
from the traditional 4-5 years. Major smartphone manufacturers (such as Apple
Inc, LG, Samsung, Sony, and others) release newer smartphones annually. The new
phones have unique designs and modern technological components. Additionally,
mobile service providers have opened phone retail shops to meet increasing
demand for new phones and to obtain revenue and maximize profitability.
Besides, some of the phones sold by service providers come with a contract
where consumers are allowed to upgrade their phones as frequent as possible to
suit the current technology. The agreement enables customers to improve their
smartphones by exchanging previously purchased phones with new smartphones, and
paying lesser amount compared to the market value. The old phone is taken to
the manufacturer, is recycled, refurbished or rectified and ultimately sold (Garbles
Cellular Phones, 2015).
Statement
of the problem
Due
to constant innovation and invention, the emergence of new phones calls for
numerous upgrading. Since most youths and college students would want to
maintain stylish nature and technologies of the latest gadgets, they often
upgrade their phones frequently. Usually, such students fail to achieve
expected maximum returns by selling them to mobile service providers and
manufacturers. The process often involves the disposal of mobile products to
avoid them from losing their value that is detrimental especially when the
company fails brand image through the official sale of the product with minor
defects. Additionally, youths may sell their old phones to other individuals
who are interested in the current technology (Kaiwen, 2012).
The
sale through local social networks or by advertising by word of mouth and
anticipating purchase from friends and colleagues is risky/unsafe, tiresome and
time consuming. Our company, Authorized mobile phones resellers intend to open
a website that provides a platform where individuals can buy and sell their
phones at relatively competitive prices and with quality customer services.
Moreover, the company will also purchase smartphones from manufacturers and
mobile service providers and sell them to customers online through the
company’s website(Garbles Cellular Phones, 2015).
Through
the website, buyers will be able to purchase from a broad range of products at
reasonable price, in a simplified and immediately. Potential customers will
also obtain adequate information on the product selected and after sale
services from the company. The seller can also monitor price range to enable
fair trade between themselves and buyers. For the above business to operate the
key requirements, include sufficient labor to facilitate customer retention and
service, efficient inventory distribution and management, development of an
active web site, reliable warehouse and distributional centers and adequate
capital to finance the venture(Ray, 2010).
Projected
Sales and Profit Margins
We
estimate that $5 million worth of capital will be sufficient to finance the
project. In this regard, the capital can be from the contribution by the
company’s directors as well as government loans and subsidies. Approximately $2
million will be used to set up and establish a local warehouse as well as to
hire the necessary equipment for distribution of products. Approximately
$750,000 will be used in hiring, building the company’s administrative, and
managerial expenses. Then $2 million shillings will be used in purchasing
second-hand phones as well as inspecting the possession and authenticity of the
phone. The remaining $250,000 will be used for other miscellanies that are
expected within the production process(Garbles Cellular Phones, 2015).
It
is estimated that projected sale revenues in the first financial year will be
$8.77 million with operating expense reaching $3.15 million, and, therefore,
the net profit margin becomes $5.62 million. As a result, the company will
repay directors and government loans. In the addition, the net profits are
expected to have an annual growth rate of 12.4 percent in next 5-15 years.
Reference
Garbles Cellular Phones (2015)Cell
Phones Retailer Business Plan the web May 28, 2015
Kaiwen Chang(2012)The Change in Market Structure in the Mobile Phone
Market. The Web May
28, 2015
Ray Belen (2010) market
structure the web May 28, 2015.
Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in nursing writing services. If you need a similar paper you can place your order from best custom term papers.
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