Shangzai Cell Phone Case

Shangzai cell phone case

陈豪

15210690166

IMBA 2

[pic 1]        ANSWER SHEET           Page 1 / 2 [pic 2]

Class :    IMBA 2         Name :    陈豪               Student ID :    15210690166               [pic 3]

The last case of management strategy: Shanzhai cell phone

1.What are the environmental factors that help drive the Shanzhai phenomenon?

  For the environmental there are 6 factors:

1). Political factor, developing the telecommunications industry was a long-stated goal of the Chinese government. Authorities at all level used policies to encourage this industry.

   2). Economic factor, China is a developing country, the economy from 1998-2007 grew fast and mass people from inland had purchasing power to buy their first cellphone in their life.

 3）. Social factor, China is uneven in development whose eastern part develops modern than western part. A lot of western people find a job in eastern cities so they need to buy a cheap cell phone to communicate with their families.

4). Technological factor, china is world ‘s factory, many big foreign cell phone brands cooperate with Chinese small companies, and Chinese companies learn rapidly from them. After 2003, MediaTek provided a turnkey solution for mobile handset, which allowed a few people to easily design a new handset model and purchase the remaining components to manufacture a handset.

5). Environmental factor: the product of Shanzhai companies is fast react to the change of the market.

6). Legal factor: The standard of illegal or legal in China is blur.

 2.what characteristics are critical to success of Shanzhai handset companies?

A. How have these characteristics been used by leading edge mainstream companies?

The common characteristics of Shanzhai companies : 1）. Focus on the domestic market (at least initially):at the beginning, China had a large user base and untapped market. Shanzhai companies focused on the rural areas which mainstream companies did not pay attention.2). Target mostly mass customers.  The target customers of Shanzhai companies is low-end, which fitted with their channels and marketing, while mainstream companies focused on mid-end and low-end, their targetingwas not clear like shanzhai companies. 3). Strive for very short cycle time on product introduction: shanzhai companies’ business model run fast than mainstream 4). Focus on cost: offered lower price for customers than mainstream companies did and shanzhai companies shifted their inventory to their wholesalers. 5). Tailor product features and functions to local requirements, which functions mainstream companies did not have.