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Eagle Telecom Report

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Eagle Telecom Report
14.07.2020
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Executive Summary

This paper is about Eagle Telecom Company which specializes in making telephone handsets. The main market areas of the company are countries such as the USA, Europe, and Asia. The production unit has been founded in Atlanta, but there are plans to open a new unit in Asia. The efforts to open a manufacturing firm in Europe turned out to be fruitless due to the high cost of labor. The management of the company has recently changed due to cartels associated with it. The senior employees are chief executive officers, chief operating officers, and chief financial officers respectively. There is high competition in the current hardest market. Customers are more interested in new technology and innovations. Eagle Company has devoted 10% of its total sales to research and development aimed to meet the customers’ needs. There are predictions in regard to the growth of demand in the coming two years, which will give the company an opportunity to increase its sales. The Asian market has the largest growth rate of 25-30%. The innovations are more appreciated in Europe and the USA than in Asia.

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The company aims to reduce its production cost by placing its manufacturing units in countries where the cost of production is low. It uses a low-cost strategy where they sell the products at a reduced cost compared to other companies. This helps to market the handset, especially in the areas where the cost is a determining factor, like in Asian region. The objectives of the economic field are to increase the number of private investors and to always have a minimum balance of 100000 at the end of every month. The production goals are to reduce the cost and to meet the market demands in time, as well as to meet the consumers’ needs. The goals of the marketing department are differentiated according to the region. However, they are all aiming at increasing the sales, and reach out to more customers by opening new shops. The primary goal of Asia market is to reduce the cost of gadgets, while Europe’s objective is to increase the sales of new technology and innovative phones. The USA mainly concentrates on reaching out to more customers.

Recommendations

It is therefore highly recommended that:

a. The company should use the low-cost model to win the customers.

b. There must be a reduction of cost of production to enable the success of the low-cost model.

c. The company should reach out to more customers by opening more shops in the three regions of such countries as the USA, Europe, and Asia.

Introduction

Eagle Telecom Company specializes in the manufacturing of mobile handsets. This report provides a description of job positions and the expectations attached to the titles. It further explains the duties and responsibilities that determine what people have a higher rank. It also gives both the expected qualifications and the needed academic qualifications for each position. It further analyses the company and provides a short description of how it was created. The paper then provides the analyses of the past and current market conditions of the telecom handset industry. There is also a prediction of expected growth of the market in different regions, which include the USA, Asia, and Europe. The SWOT analysis assesses the business strength, weaknesses, available opportunities, and threats. The analysis also helps the business to be prepared for any shortcomings and to use the opportunities to their benefit. Finally, it gives an overview of the company’s strategic plan, explaining the steps that it takes in order to achieve its goals. The statement is made regarding the objectives and mission of the enterprise. The company has broken down its strategic plans at a departmental level. Every area has its goals which are expected to achieve the overall benefits for the enterprise. The different departments have different policies which they follow to the dot.

Findings

The report results indicate that there is a high growth of the market in Asia region. The customers in the area are more appreciative of the little cost of the hardest. It also indicates that the innovations are more appreciated in USA and Europe. A major area of weakness that requires investigation and corresponding remedial actions by management is the human resource, as there are a lot of complaints from the employees about their working conditions. There needs to be a survey to determine whether the claims are genuine (Mostaghim et al., 2013). The company self-assessment specifies that it should minimize the outsourcing as it is revenue foregone. It should increase its production capacity to ensure it meets the market demands by itself.

Organization Chart

NameJob titleReports to the following.In charge of the following sectors
James AndrewCEOBoard of directors.Overseeing all the activities of the company
Mary JanisCFOCEOFinances

Risk management

David LutherCOOBoard of Directors and CEOCompany management

CEO Job Description

Name: James Andrew

Base Salary: $ 75000

The Chief executive officer’s primary role is to oversee the activities of the enterprise. The qualifications for a CEO in the business are as follows: the master’s degree in management, three years experience in a senior management position at a sizable firm, and a high level of commitment. Though CEO is the senior person in the company, he has to report to the board of directors. Andrew is responsible for setting the company’s strategies and giving direction to the ways of their implementation. He is also responsible for making decisions of whether or not it is beneficial to give a new face to the business. The CEO also builds a culture in the enterprise — they have the mandate to ensure that the employees are working in the right conditions. A business may lose good performers due to harsh working conditions.

CFO Job Description

Name: Mary Janis

Base Salary: $70000

The primary qualification for a chief financial officer is at least a Masters’ degree in accounting or financial management. They will be required to have a minimum of three years experience as an accountant in a larger enterprise. Janis is responsible for administrative actions, risk management, and financial operations. She develops the financial and operational strategies, monitors and controls the activities aimed at preserving the company assets, and gives a report on the financial position of the enterprise. She is also responsible for creating business links with investors and clients. She represents the company in conferences and investment forums. She reports to the CEO and the board of directors.

COO Job Description

Name: David Luther

Base Salary: $73000

Chief operation officer is the second in command after the chief executive officer. The required qualifications are the Master’s degree in business administration or relevant field and five years of working in the experience in a senior manager position. The ability to lead and convince people and the general qualities of a good leader are essential, along with the ability to understand the objectives and goals of the company well. Luther works hand in hand with CEO to oversee the specific activities. He is responsible for setting achievable goals that will lead to the growth of the company. He monitors employees and encourages them to perform better.

Industry and Company Background

The portable mobile phones, introduced to the market in 1981, were huge and cumbersome. It led to the investment that allowed a Second generation phones to appear in 1990s, smaller in size and with more features (Cesim, 2016). Since then, there has been a remarkable development in this area of business.

Current Global Market Analysis

There is high competition in the current handset market. Research and development aim at the production of customer based designs. The biggest market of the company is in the USA, where it was founded. Sales network has later extended to Asia and Europe. The company uses marketing strategies to reach out to the customers. The marketing helps to inform people of the new products in the market and the location of the shops where they can be found. It also gives customers other options, like buying online and then getting the bought products delivered. 3-5% of sales revenue goes to marketing (Cesim, 2016).

Demand for the hardest is expected to grow in the following years. The growth is explained by the increase in competition leading to the reduction of the handset cost. The demand will increase the rates of sales in all markets. Statistics indicate that Asia has the highest growth rate between twenty-five to thirty percent, although it is not easy to predict the rates of increase after two years. In this region, customers are less concerned with the new features and new technology. Their biggest concern is about the price. This price factor gives the company an advantage of selling their types of phones for a long time to come. The USA market is expected to grow at the rate between five to fifteen percent in the next three years. The introduction of new technology and features is expected to lead to the further growth of demand, around 15-20% (Cesim, 2016). Even though the USA has a well-developed technology, it stays behind in regard to the mobile phone technology and network. It is always several years behind Asia and Europe. This fact makes the customers more appreciative of the new features and technology in the mobile industry. Europe growth is expected to be around 10% (Cesim, 2016). The increase in demand will continue as long as there will be the introduction of new technology in the market. The customers in the region are also more appreciative of new features.

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The company has been making good money despite the cartels associated with it. Research and development require around 10% of the total sales revenue. It is also the leading cause of the market growth, as customers always demand new features. There has been little depreciation of the fixed assets, which is an advantage to the company as it does not spend a lot of money on their maintenance. The company is also careful in allowing people to buy goods on credit, as it seeks to avoid the situation of debts. It also avoids taking short term loans as they are associated with high-interest rates, and only opts for them as the last result. It gets its money from sales and investors.

Pest Analysis

Political Factors

In Europe, there are strict policies about labor. Its minimum wages are rather high, thus making the production cost high. As a result, the organization opts not to have a production unit in Europe. Phones sold most are from either USA or Asia. In the USA, strict rules prohibit the use of different companies’ innovations without license. The company caught while violating this policy receives a high penalty and is likely to lose its working license. This policy is beneficial to the businesses which have their roots in the USA. They receive a lot of money for selling innovations to other firms, which they do after having already established their new products in the market. This facts gives the company additional competition benefits.

Economic Factors

Per capita income in Europe is higher than in any other region. This high income makes it easy to sell expensive hardest. USA economic growth rate is high and supports innovation. There is also a wide range of marketability. Sales of expensive handsets are relatively equal to that of the relatively cheap ones. This data makes the company balance its production and supply to meet the needs of the people in the area. Though the Asian economic growth is high, the customers do not spend a lot on buying new technology. Therefore, the company considers the price of the gadgets before moving them to Asia.

Social Cultural Factors

In all the regions, the new technology is first received by the young generation, and then it is spread to higher age groups. With high per capita income, the citizens have a habit of spending a lot of money on shopping and maintenance. They regularly dispose of their handsets after new technology has emerged. They give little attention to the price. This high per capita and buying culture make the demand of the region high, and the demographic factors increase the income of Asian and European markets. The population is large and mostly characterized by youth who happen to be major customers of the industry.

Technology

High competition regarding technology is mostly common for a mobile handset industry. The company has to spend a fortune on research and development. Furthermore, types of machinery used to produce a low quality hardest may not be useful, and the new models require regular changes. In-house construction is cheap, but it takes a lot of time. This delay makes it necessary to outsource innovations from other companies. Even the smallest slowdown in technology will reduce the sales, which may lead to the massive losses. This outsourcing helps the company’s handset to be at par with other businesses. It also sells its technology to other enterprises.

Porter’s Five Forces Model

The first factor in the model is the supplier power and how likely it is to increase the cost of the raw material. The company deals with this by conducting a regular survey in regard to the materials it outsources. The supplier with high quality at an affordable price is preferred. Most of the technology is done in-house to avoid the outsourcing cost. This in-house production does not threaten to increase the cost of supply, although the cost of its manufacture may increase depending on the quality. The second force is buyers’ ability to buy the product. One of the ways to determine it is by looking at the spending trend of people, especially in regard to technology. This survey enables the company to predict how much they are willing to spend in different regions. The supply and production are realized after people in charge receive the results of the research. For example, costly phones are suitable for the European market.

Another factor to be considered is competition. There is great competition in the handset industry market. The main competitors include Samsung and Apple whose combined global market share is 38.5 %. The two companies have already earned the trust of their customers. One of the ways that Eagle Telecom Company can avoid the risks is to avoid places where Samsung and Apple dominate. Another way to deal with this problem is through marketing aimed to convince the clients that Eagle Telecom’s handsets are better or equally good. There is little threat of substitution in the phone’s hardest market as the company’s products are the most portable technological gadgets. It is hard for a person to operate only with the help of a laptop, so they require some kind of substitution. Usually, it is something that might not be easily portable and even requires an external bag to carry, so the advantage of a phone is its ability to be carried in the pocket or in hands. The current threat is in setting up a production center in Europe, as the production cost is high. The policy of minimum wages is strict, and the cost of the raw materials is high. The high-cost solution is to export the handset from the area of low-cost production, which in this case is Asia. The only cost needed is the one for maintaining the shops, where the company employs as minimum human resources as possible.

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SWOT Analysis

Strength

The main strength of Eagle’s business is the ability to carry out in-house innovations. The cost is low, leading to the maximization of profits. These innovations have increased the competitiveness of Eagle’s handsets. Its strength is also in the fact that the production cost in Atlanta is cheap. The plan to create a manufacturing plant in Asia is also good, as the cost of production there is low. The company has already built loyalty among its customers due to the durability and the features of the gadgets. The location of Eagle’s shops, especially in the USA and Europe, are strategic, making it easy for the customers to reach them. The company also makes remarkable sales and profits — approximately $157 885(See Appendix).

Weaknesses

The main weakness of the company is that the firm is sometimes unable to meet the market demands. It is therefore forced to outsource ready-made gadgets, the revenue foregone. Another weakness is in the cartels associated with the company whose solution is to change the business management. Another flaw that needs attention is the complaints about the working conditions of the employees.

Opportunities

The available opportunity is to expand the company’s market areas in the Asian region that it has not covered and the African market. Another opportunity is to sell its innovations to different companies, although this will increase the competition. The company also has an opportunity to increase the number of investors, as it is currently doing well in the market.

Threats

The main threat is the rate at which the innovations are changing. The company has to spend a lot of its sales revenue on research and development. The high competition in the industry is also a threat. There needs to be a lot of marketing in order to reach out to customers. The marketing also needs money to operate, leading to the reduction of the profit. Another threat is the ability of the company to maintain its innovative employees. They often transfer to other firms with very high salaries and better working terms that Eagle business can not provide.

SWOT Analysis Table

Strength

In-house innovation, low production cost in Atlanta, customer loyalty, and shops locations. Increased profit and sales.

Weaknesses

Inability to meet market demand, cartels associated with it, and complaints about the working conditions.

Opportunities

Expand market, selling innovations, and increase number of private investors.

Threats

Rapid change in innovation, high competition, and losing high-performing employees to other companies.

Strategic Plans of the Company

Vision

The firm aspires to be the leading producer of quality and innovative handsets at an affordable price in the world, in line with the slogan ‘Matching price with quality”.

Mission

The Eagle Telecom has the commitment of producing changes and invests in research and development to meet customers’ needs; the hiring of highly qualified employees will develop a lasting relationship with clients and investors, thus making everyone feel like part of the company.

Aims

The purpose of the Eagle Company is to operate at low-cost leadership strategies. According to this strategy, the company first intends to reduce its production cost. The production firms will only be placed in locations where the cost of materials and labor are low, but of quality. It also aims to internally train the employees, especially in areas that do not require high qualifications. For example, those maintaining the company’s hygiene may receive training via the company, hence they will be employed at a low cost. This will enable the company to sell its handset at a lower cost while compared to other businesses. This strategy is expected to win customers, especially in areas where the competition is high. It also aims at winning Asian clients who are more concerned about the price of what they buy. Many customers who spend little money will still help the company accumulate high profits.

Company’s Objectives

a) Improve handset quality by adding at least one or two innovative features per year.

b) Meet the market demand and reduce outsourcing of commodities that can be produced internally at a low cost.

c) Increase the assets growth rate by at least 6% per year.

d) Extend to new market areas, particularly in Asia and later in Africa.

e) Increase sales revenue by at least 5% per annum and net profit by at least 3% per year.

f) Improve the working conditions and terms for the employees in order to keep them in the company for a long time.

Department Strategies

Financial Area

objectives

Pay a minimum dividend of 5.35%.

Increase the number of private investors.

Maintain a minimum balance of 100 000 every month.

strategies

Increase sales.

Increase the shares price.

policies

Minimum balance of 100 000 every month.

A minimum of 100 private investors every three months.

Production Area

objectives

Reduce the production cost by five percent.

Open a production unit in Asia by the mid of next year.

Meet the market demand internally and avoid outsourcing what can be produced by the company at a low cost.

Have at least two innovative features added to the handset per year, following the customers’ needs.

strategies

Place the production units in areas with low labor costs.

Devote resources to the opening of new shops in Asia and Africa.

Employ highly qualified employees in the sector.

Invest in research and development.

policies

A deadline of three months to meet the predicted market demand.

Ensure that production cost does not exceed one million per production firm.

Reward employees who come up with innovations through salary adjustments.

Marketing Area in the USA

objectives

Increase sales by 10% rate per year.

Advertise the handsets through the Internet and social media platforms to make them famous.

Open new shops in states and towns not covered by the Eagle company.

strategies

Devote recourses toward opening and advertisements.

Employ a highly qualified marketing manager to oversee the commercialization of the products.

Hire two people to manage the website and social media pages so that they could listen to customers’ views and demands.

policies

The minimum qualifications of marketing managers are the Master’s degree in marketing and proven success in advertising in a different company for at least three years.

Social media and websites to be operational and monitored throughout the day.

Marketing Area in Asia

objectives

Meet the customers’ needs by reducing the cost of the handsets in the region.

Reach out to places not covered by opening new shops.

Offer discounts and advertising as forms of promotion.

strategies

Open a production unit to reduce the cost of manufacturing which will make it possible to lessen the price of gadgets.

Conduct a market research to determine how much customers are willing to spend and predict the demand.

policies

Carry out a market demand survey every six months.

Set up 3% for marketing and promotions.

Marketing Area in Europe

objectives

Increase the sales of new technology phones and the overall amount of revenue earned in the region.

Open new shops.

Increase personal delivery.

strategies

Buy a company vehicle which will be doing personal delivery of orders.

Invest more in research and development.

Improve marketing in order to reach out to more customers.

policies

Set the new phones to get to the Europe market in the shortest time possible.

Start the advertising of a new product two weeks before the gadget reaches the market with the indication of “coming soon”.

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Conclusion

Despite the challenges that the company is currently facing, Eagle has a chance to perform better in the market. The ability to innovate places it in a competitive position, making the customers buy Eagle’s products. The amount aimed to provide the research and development is not spent in vain, as sales are increasing. The market is predicted to improve in the next two years, and so the company is making preparations in order to increase its production capacity. This improvement will enable it to meet the market demand.

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