International Business Strategy Essay Example | Topics and Well Written Essays - 1250 words

International Business Strategy - Essay Example While smartphone brands are differentiated to some extent, majority of other smartphones that fall in the same price range possess similar functions (Ogunsanwo, 2013: p54). This makes the threat of substitute products high. In addition, now consumers can use 3rd party applications and internet based calls. The number of substitute products makes it easier for consumers to move to another product and get similar benefits. Concentration of smartphone customers is low, ensuring that they do not have much influence over smartphone prices, which, in turn, makes the buying power of consumers low. However, some rival producers like Apple have influences that extend to their channels of distribution (Ogunsanwo, 2013: p55). This threat is reduced somewhat since consumers have the ability to buy from other smartphone manufacturers even when they do not necessarily give them better prices or incentives. The high number of substitute products gives smartphone suppliers less leverage over them be cause of substitute competition. This increased competition has a positive effect on the smartphone manufacturers (Ogunsanwo, 2013: p56). In addition, the increased competition among the suppliers leads to a reduction in price. Finally, supplier bargaining power is reduced by the similarity of input products. Finally, smartphone manufacturers are not under threat when it comes to rival entrants since the smartphone market is difficult to enter. Rival entrants require proprietary knowledge, as well as many patent requirements that continue to embroil even the established smartphone manufacturers like BlackBerry (Ogunsanwo, 2013: p56). The new entrants will also lack brand power that is essential to sales. Strategic Analysis of BlackBerry Shareholder Value: Earnings per Share Year August 2013 2013 2012 2011 2010 2009 2008 BlackBerry -0.60 -0.60 4.20 6.34 4.37 3.43 2.26 Samsung 18.85 15.79 15.02 8.07 10.99 6.89 3.68 Apple 8.26 11.13 8.75 7.03 4.64 4.10 3.60 (BarChart, 2013: p1) From th e above figures, it seems that the EPS for BlackBerry has decreased consistently from 2010 to the present, indicating that their earning power is decreasing. This has been in sharp contrast to Samsung and Apple who’s EPS is rising consistently. Samsung’s earnings per share are relatively higher than for both Apple and BlackBerry, indicating that, among the three major smartphone makers, Samsung’s earning power is increasing mostly due to manufacturing the most new models of smartphones, as well as its more diverse electronics range. Price/Earnings Year August 2013 2013 2012 2011 2010 2009 2008 BlackBerry 0.00 -17.85 7.24 9.38 15.34 26.24 0.00 Samsung 7.453 10.39 9.10 8.60 16.10 23.3 8.8 Apple 13.12 11.16 14.61 15.35 21.63 31.73 26.39 (BarChart, 2013: p1) The P/E trend for BlackBerry and other smartphone industry players has been falling since 2009 because of the financial crisis. The current P/E ration level for BlackBerry shows that it is very easy to buy at th e moment unlike Apple and BlackBerry who have relatively high P/E ratios, making them more difficult to buy. However, there is a fluctuation of the ratios for both Apple and Samsung, which still seem to be feeling the effects of the financial crisis in 2008/2009 as well. However, it seems BlackBerry was unable to turn its decline around most likely because they failed to introduce any new brands in the period immediately after the crisis. Long