SUPPLIERS LOW Power Threat Suppliers are not capable of Forward Integration (No servicecapability) 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 ENTRYTHREAT 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 CommentsQuestions or Comments
Sources Darlin, Damon. "The High Cost of Loving Your Phone." New York Times, 11 June Web. 5 Apr Thormahlen, Casey. "Wireless Telecommunications Carriers in the US." Ibis World (2010): Web. 29 Mar Moorman, James. "Telecommunications: Wireless." Standard & Poor's Industry Surveys (2011): N. pag. Web. 5 Apr