Strategic Marketing

1. Your assessment of the long-term attractiveness of the industries represented in

MalFone’s business portfolio

Competitive strengths of Malfone are its different business units compared to other companies in its market. The strengths involve a strong product portfolio of the company, its brand reputation built along the years, experience in achievements the company has made and diversification in the business conducted in the market. Malfone has continually advanced over its competitors by targeting their weaknesses and making them their strengths. By using their corporate strategy, having a business development advance over the industry has created separation.

Malfone’s strategy to open a retail shops division has increases their sales in the early years. This approach has allowed the customers to go and handle the products and discuss mobile phone options with trained sales people. Malfone also sold products and services from all the four major network providers licensed by the government to provide telecommunications services to the country, where customers can choose product and services across the range of the four providers and ensuring purchasing freedom. Having a continuum on MLDirect and MLInsure has boosted the sales of the company for the next following years. Because of these 2 new divisions created, Malfone has created differentiation and allows them to be one of the strongest competitors in its industry.

        However over the recent years, profitability has been declining for retail shops division. More customers are proceeding to purchase mobile phone on the Internet to achieve lower prices, including MLDirect. Staffs have lost their morality to have customers only come to the retail shop to get information of the mobile phone and later purchase them on the Internet. Having MLDirect’s customers to pick their phone through Malfone’s retail shop also has been a problem to them as this is not recognized as shop employee’s reward package. The CEO of the company also opposed to the suggestion given by the strategic planning committee to sold off the retail shop due to his emotional attachment to the division and cloud his decision to consider ‘economically justifiable exit from the retail business’.

1. Your analysis on Competitive Environment of Malfone’s retail shops division, using Michael Porter’s Five Forces Model of Competition

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Malfone’s retail shops division has bring upon two significant trends, where licensed network providers to open their own retail stores, and the mobile phone market has become more sophisticated, where they offer the products in both its shops and internet operation. This has increase the competitiveness of the market between Malfone and the others, especially the licensed network providers.

Bargaining power of suppliers: this is to assess how easy the suppliers can drive up prices. This is driven by various reasons. For Malfone, the production has a very large number of suppliers for each items of electronics, and for each parts, there are numbers of suppliers that are offering at a competitive price. Therefore, Malfone is the one to drive the price and has a higher power than the suppliers.