This the company here companies need to build

This
analysis is used by organizations to understand the environment it’s operating.
Especially this analysis is helps companies to understand the threats and
opportunities, this is critical when planning the future of the company by the
top management. PESTLE Analysis includes Political, Economic, Social,
Technological, Legal and Environmental factors these external factors are
changing regularly and directly impact to companies. It’s very difficult to
control these factors so that companies need to react strategically. OPPO is
our target brand OPPO is the 4th smartphone brand globally according
to statistics. Smart phone industry is more demanding and rapidly growing
industry at present OPPO is positioned as “selfie expert” and it’s using this
strategy to win the market. Here we can explain each factor separately.

o  
Political

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Political
environment is affecting the whole industry and separately each and every
company. Most important and considerable component here is tax policy of the
government, it may change according to the changes of people who govern the
country. OPPO is anyway new to the Sri Lanka, OPPO mobile phones are not
manufacturing in Sri Lanka so the company is importing them and promoting them
in Sri Lanka so import taxes they need to pay those are affecting revenue of
the company here companies need to build a good relationship with the government.
Due to taxes prices of mobile phones also increase so it’s affecting the demand
because smartphone industry is very competitive and challenging.

o  
Economic

Economic
factors are also important like political factors. Current economic situation
is directly affecting to the businesses inflation rate is changing according to
the various fluctuations in the economy and it affect the purchasing power of
the consumer. To fulfill the demand there are three factors desire, purchasing
power and a plan to purchase whatever the product we launch if the consumers
can’t afford it they may not buy them. Here government policies are directly
affect to the inflation rate so these factors are interrelated. As well as
inflation rate, interest rates, Foreign Exchange rates and economic growth
patterns are also affecting. Here Foreign exchange rate is affecting to OPPO
Company a lot because it’s engage in importing mobile phones and other devices.
Foreign Exchange rates change day by day so the company must regularly monitor
them in order to assure not to make loses due to these changing rates. Economic
growth patterns are also affecting the demand of smartphones that means when
declining the economy disposable income of consumers decrease so they can’t
afford mobile phones and a situation like this low priced phones have a demand
than high priced smartphones. Vice versa when growing the economy. So economic
conditions are affecting a lot to the company.

o  
Social

Social
environment includes demographical changes, cultural changes and population
changes. Especially there are many ethnic groups in Sri Lanka those are
Sinhala, Tamil, Muslim etc. The attitudes of them changing according to their
religious views so they prefer various brands according to the preference of
their group born country of the brand is also affecting and also the way the
brand is positioning and the nature of its advertising campaigns also affecting
for instance OPPO is sometimes using various characters which people admire
when designing its advertising campaigns. Population changes are directly
affecting to the demand of smartphones if the population is rapidly growing the
demand also growing.

o  
Technological

Technological
environment is the most important factor for OPPO Company. Smartphone industry
is changing basically due to changes in the technological environment Samsung
and Apple is fighting using their technological advancements OPPO is also using
a unique way of improving its product features and its features are unique to
it. OPPO mobile phones are designed in a more user friendly way. OPPO is
recently introduced its next selfie expert smartphone F5 it contains beauty
recognition technology and it helps to create natural selfies. OPPO is always
try to improve its main competitive and positioning advantage that is selfie.
But other competitors like Samsung and Apple trying bring their products using
various features other than the camera. Anyway in order to survive in the
industry smartphone companies need to launch a new smartphone with more and
more advanced features. OPPO is focusing on a lot on its research and
development function in order to develop its smartphones and win the market.

o  
Legal

Legal
environment is affecting the company’s different functions for instance labor
laws affecting to the HR division and the division needs to make its own rules
and regulations according to the existing laws in the country this may vary
country to country. Like that consumer laws also available in the country in
order to protect the consumer so company needs to provide a better service to
their customers and make sure their channel members are not cheating them.
Safety standards are also there to protect the consumer.

o  
Environmental

Here
under this topic we are talking about environmental changes like climate,
weather and geographical location. These changes are affecting companies
positively as well as negatively natural disasters may negatively affecting to
the company. When there is bad weather conditions demand may decline the
company can’t control or influence to these changes it needs to shape its
operations according to the changes in the natural environment.

 

·       
Porters Five Forces

This
model was created by Professor Michael Porter to analyze the competitive
environment of a company. This analysis is used by almost all top companies
when analyzing and understanding their competitors. This model contains five
components those are representing different angles of competitive environment.
OPPO Company is operating in a more competitive market as we mentioned earlier
so that it is a main factor which affecting the profitability of the company.

o  
Competitive Rivalry

Under
this topic the company is look at the number of competitors and their strengths
and weakness comparing to the company’s own strengths and weaknesses in Sri
Lanka Samsung, Apple and Huawei are the main competitors to OPPO. OPPO is using
its online and offline campaigns effectively to fight with its competitors Samsung
Company is introducing various smartphones to various income groups day by day.
Apple is positioned its brand as a premium brand and targeting a separate set
of consumers. Anyway OPPO is positioning as selfie expert and using a unique
strategy to capture the market.

o  
Supplier Power

This
factor highlights the bargaining power of suppliers, how powerful them and
their product quality is also affecting to the quality of the final product.
Anyway suppliers can affect the production flow, continuous supplying of raw
materials and other required components are very important.

o  
Buyer Power

Here
the company is selling its mobile phones through its dealers so the smartphones
are reach to customers through their dealers here buyer power is very high in
smartphone industry because there are many alternative products (substitutes).
So the buyers are always asking dealers to reduce prices. So they have to give
discounts when selling products if not consumers may go to competitors’
products and also they expect more features and finding and comparing a lot
with other smartphones when buying a OPPO phone also sales people who are
promoting the phone has a big role when explaining the performance and features
to their customer. So we want to mention here buyer power is high in the
smartphone industry due to heavy competition.

 

o  
Threat of Substitution

Threat
of substitution is referring to our customers are finding a way to satisfy
their need except purchasing our product this is different from competitive
rivalry because it’s talk about impact of direct competitors but here actually
talk about indirect competitors. For instance, OPPO is especially highlight the
quality of its camera but the consumers may use a Canon Camera to take photos
without using a smartphone to take photos. And also consumers may use mp4
player to watch videos instead of using a smartphone. So that indirect
competitors also affecting to the demand but anyway they are not powerful like
direct competitors in Sri Lankan smartphone industry.

o  
Threat of New Entry

New
entrants are there in Sri Lankan smartphone market it’s very difficult to enter
this market but there is a trend of global competitors are entering to the Sri
Lankan market. Those are not powerful and affecting like Samsung but they also
already captured many consumers. OPPO needs to pay attention towards the
competitive advantages and strategies of these new entrants.