Industry Analysis of the Wireless Telecommunications Industry

Lucas Allen, Luke Andrew, Nickoli Rosinski, Taylor Nunn

SUPPLIERS

LOW Power Threat

Suppliers are not capable of Forward Integration (No service capability)

There are numerous suppliers in this industry such as LG, Samsung, Motorola, Apple, etc.

BUYERS

LOW Power Threat

Consumers always want the newest product available to them so purchases are made very frequently.

Customer loyalty is high in this industry.

Wireless providers make switching providers very difficult with 2-year contracts containing high termination fees.

SUBSTITUTES

LOW Power Threat

Products from other industries do not offer superior value propositions to satisfy buyer’s needs.

Computers and tablets (i.e. the iPad) offer many of the same functions/applications as cell/smart phones, but still can not meet the core competencies of them.

Has the possibility of changing to a high power threat in the future.

RIVALRY

HIGH Power Threat

This industry consists of only a few dominating competitors, but has numerous smaller providers.

When one competitor releases a new product or technology, the others are quick to imitate.

THREAT OF ENTRY

HIGH Power Threat

The industry has seen a large increase nonconventional wireless devices (i.e. tablets, smart phones, and wireless connectivity cards)

Tablet vs. Smart phones

Data plan revenue accounted for $41.5 billion dollars in 2009.

EXPECTED PROFITABLITY

There are 3 LOW force threats in total concluded from the Porter’s 5 Forces Analysis of the Wireless Telecommunication Industry.

The expected profitability of the average rival on all Key Success Factors in this industry is about EQUAL to cost of capital.

The profitability in this industry, overall, is moderately attractive.

Questions or Comments

Sources

Darlin, Damon. "The High Cost of Loving Your Phone." www.nytimes.com. New York Times, 11 June 2010. Web. 5 Apr. 2011. http://www.nytimes.com/2010/06/13/technology/13every.html

Thormahlen, Casey. "Wireless Telecommunications Carriers in the US." Ibis World .51332 (2010): 1-52. Web. 29 Mar. 2011.

Moorman, James. "Telecommunications: Wireless." Standard & Poor's Industry Surveys (2011): N. pag. Web. 5 Apr. 2011.