Introduction
Oppo Mobile Telecommunications Corp., Ltd is a Chinese company dealing with consumer electronics and mobile phone communication. It has its main operation center at Dongguan in Guangdong. Oppo is a subsidiary of BBK Electronics, which operates other companies such as Vivo, OnePlus and Realme. The Launch of Oppo Reno in 2019 resulted in the changing of the organization’s logo. Oppo mainly manufactures electronic products such as smartphones, audio devices, power banks, Blu-ray players, among other electronic devices.
Since Oppo electronic products, the two closest rivals are Xiaomi and Vivo. These are the two organizations within China that pose a significant threat to Oppo in the industry’s market share.
This paper purposes to develop External Factors Evaluation of Oppo Mobile Telecommunications and assess its performance by taking benefits coming from opportunities and evading threats within the industry and competitors.
External Factors
The Oppo’s PESTLE Analysis examines various external factors such as political, economic, social and technological (PEST) factors, which impact the organization’s operations and the other forces that emanate from considering legal and environmental factors. Other external factors that can affect the operation of the business include trends in the industry, social, cultural, demographic and government-related factors. Each of these factors is analyzed below.
PESTLE Analysis
Political Factors
As a Chinese company, Oppo should understand the political aspects of every country before entering the region. The business can perform best when the new market’s political situation is stable or friendly to investors. The secure political environment is essential for realizing an effective supply chain.
Economic Factors
Since Oppo is a for-profit organization, it must consider factors that promote its profitability. Economic indicators such as the rate of inflation, interest, unemployment and the growth of the country’s GDP should be critical determinants of the market’s viability. Moreover, the company must consider the cost of labor in the new market, as labor plays a crucial role in supply chain effectiveness.
Social Factors
Smartphones are more luxury goods than necessities these days because of the extensive disposable income of people. Oppo’s advertisement is relatively low, but it makes smartphones with an exemplary configuration at cheaper rates. This strategy works for Asia, but in America, the scenario is entirely different. Therefore, the economic class of the target audience is an important parameter to be considered.
Technological Factors
Technology is ever-evolving, and such advancements have been seen more in mobile phones. The need for internet speed, camera functionality, storage capacity, and processor functionality are some of the main competition areas, which put one phone company over the rest. Oppo must look for technological advancements to remain competitive in the market. For instance, it can enhance its manufacturing and the main user requirements to surpass its competitors.
Legal Factors
The laws and regulations that govern a company’s operation are diverse and can vary depending on the region of operation. Various guidelines control the business of Oppo Manufacturing Company. Some are internal but are affected by the externally-defined rules based on the jurisdiction where the company operates. Labor laws ensure the minimum wage that any worker should receive. Environmental laws monitor the amount of waste generated and its disposal efficiently. Other laws also dictate how the company must operate with respect to the country’s existing technological companies and tax regulations, which the business must adhere to for it to operate within the specified region.
Environmental Factors
Oppo is a manufacturer of electronic goods. Smartphones manufactured are non-biodegradable. Oppo should make their devices in sustainable and reusable ways to lower its costs and adhere to the environmental concerns and regulations.
Government-Related Factors
There are diverse factors related to the government, such as laws, policies, and political barriers or enablers. The government defines the guidelines that govern the operation of foreign companies. The government can stop using some technologies within its territory, such as when the United States of America stopped Tik-Tok because it posed a national security issue. Thus, Oppo should enter regions that relate well with China or those that are on the verge of forming a sustainable relationship.
Business Trends
Business trends are critical indicators of the direction a business needs to take. In most cases, Oppo should expect the trend to be defined by its competitors or consumers. In the smartphone industry, in particular, notable organizations are Apple and Samsung. These two companies tend to create high-end quality mobile phones that meet their customers’ expectations, hence defining their high prices. At the same time, Oppo’s closest rivals, Xiaomi and Vivo, also try to provide products that tend to meet the needs of the users at a cheaper price. Oppo should compete along the same line and offer its product at a lower cost for the organization to impact new markets.
Cultural Factors
Most organizations have associated cultural factors relating to consumables and fashion. In the smartphone industry, culture is diverse, and since it is a market that has not stayed for several decades, new and emerging cultures are on the rise. However, some of the most outstanding relate mainly to people’s inclination towards buying internal products. This is most rampant in the United States, where people mostly buy mobile phones produced by Apple. Other mobile phones are considered inferior to those manufactured by US companies. Moreover, another common and upcoming culture that has affected most organizations is that people tend to demean Chinese companies. Thus, to overcome this challenge, Oppo must be distinguished, and if possible, outperform the giant companies such as Apple and Samsung.
Demographic Factors
Understanding the dynamics of the market is crucial before getting into a new market. Most smartphone users are youthful, which is vital for the company to consider. However, Oppo must also ensure that the targeted youth have enough resources to buy from the company.
SWOT analysis
Oppo SWOT analysis explores the company’s strengths and weaknesses, which are forces affecting the firm’s operation from within, and opportunities and threats, which are its external factors. Through SWOT Analysis, Oppo can benchmark its performance against its competitors and according to the industry standard.
Strengths
- Provides multiple models having innovative design and features
- Offers high-end specifications at prices which are affordable
- Signed up with celebrities like Hrithik Roshan and Yuvraj Singh and marketed the brand well
Weaknesses
- Intense competition from mobile companies like Xiaomi, Samsung, Vivo
- Does not differentiate itself clearly from other smartphone brands in its segment
Opportunities
- Growth opportunity by associating more with events and sports
- Bring in a flagship phone to compete with Samsung and Apple which can establish its brand image more strongly
Threats
- Price competition is intense in the mobile market
- The smartphone market highly prices sensitive; therefore, brand loyalty is relatively low.
External Factors Evaluation Matrix
The EFE Matrix above reveals a total weight score of 2.9, which is crucial as it shows that the business is slightly above the average operating point in its response to the external factors. The company should analyze its external factors by grouping the various elements under social, economic and political factors, which are the broader categories of external forces affecting the business.
Competitive Profile Matrix
Oppo outperforms its two competitors in the terms of total score. However, the company should focus more on its customer relations and product quality to remain at the top of the market.