A ne new w da dawn wn in th thee sm ar artph tph on onee wo world rld One Plus – A Introduction:
Like a large portion of the new businesses incubate in cafe, this bundle of individuals (One Plus founders) were sitting in a bistro discussing cell phones and encounters. Although they were taking a shot at android, most of them were using an iPhone. When they began examining on why they didn't decide on an Android Phone, the reasons were numerous – Bad form quality, Software not natural and a great deal of bloatware which tags along. That is the point at which they saw a chance to make a gadget with a decent form quality, meticulousness and a delightful outline which was absent in the market. Cost was never a state of concentrate then. They simply needed to fabricate an incredible android gadget which they themselves would utilize. They announced the company, and then started to work on their first product and that’s OnePlus One. While getting to the prototype, they realized, they can create a flagship killer device at a much affordable price. That started the journey for them. Smartphone Industry :
The principal half of the year has proceeded with a year ago's pattern of abating development. Gartner predicts that with 1.5 billion units sent in 2016, worldwide development in cell phone deals will ease back this year to 7% subsequent to growing 14.4% a year ago. This stoppage is being brought about by a mix of immersion in major created markets, monetary shortcoming in China, and extending update cycles. Gartner, IDC and different examiners consider India, Indonesia and Sub-Saharan Africa to be the significant development markets going ahead. Given the lower value focuses in these busin bu siness ess se secto ctors rs – half of all cell phones sold in India are under $120 – these business sectors will support esteem driven Android merchants like the rising players in China over premi pr emium um pl playe ayers rs lik likee Ap Appl plee and Sam sun sung. g. i Per a different source (IDC), The smartphone market has gone flat. Around the world, cell phon ph onee pro produ duce cers rs de deli live vered red 33 334. 4.9 9 mil milli lion on ha hand ndset setss in th thee pri prin n cip cipal al qu quart arter er of 201 6, as pe perr statistical surveying firm IDC. That denote a measly 0.2 percent expansion over a similar perio pe riod d a yea yearr ag ago, o, th thee lit little tlest st yea yearr -ov er- yea yearr de deve velo lopme pme nt ev ever er re reco corde rded. d. Thi s im impli plies es th thee perio pe riod d of cr craz azy y ce cell ll ph phon onee de deve velo lopm pmen entt is ev evee ryt rythi hing ng ex exce cept pt ove r. App Apple le,, whi which ch dependably appeared to be relentless, saw iPhone deals drop 16 percent year ove r year last
quarter. That is the first run through since the iPhone's presentation in 2007 that is happened. In truth, the iPhone accounted for $32 billion in income last quarter, however even Apple is feeling the new ordinary. ii The top of the line cell phone market in India keeps on developing, says another report by research firm Cyber - Media Research (CMR), with shipments in the value band achieving 7 percent. While Samsung and Apple keep on dominating the value band, OnePlus is the main developing brand to make it to the main 5 with a 6 percent in 2015. CMR's information demonstrated that Samsung and Apple expanded their piece of the pie in the above Rs 20,000 value section. Samsung leads with 44 for each penny share, while Apple has a 27.3 for every penny share. The report notes Sony, HTC and LG have all lost piece of the pie amid the period. iii Competitive analysis: SWOT Analysis
Strengths 1. 2. 3. 4.
Low cost smart phones with high specs One plus is rising as one of the fastest growing companies Exclusive partnership with major e tailing site Amazon Special android platform Oxygen OS is a big strength since it sets them apart from other android users
Weakness 1. 2. 3. 4.
Limited Production Capacity New entrant Highly competitive industry Online sales may eliminate offline audience
Opportunities 1. Broaden the geographical market base 2. Resort to mainstream product advertising Threats 1. New entrant selling equally competitive phones at lower prices 2. Inability to keep up with the huge capital involvement in the industry trend .
PORTER 5 FORCES :
Porter’s five forces analysis is done to understand the industry attractiveness of the smart phone industry. This five forces analysis is just one part of the complete Porter strategic models
1) Threat of new entrants- low The mobile phone industry is already a well established market and the threat of a new entrant is quite low because
i) Capital requirement is very high to compete in the market like huge manufacturing costs, high Research and development costs etc. ii) Barriers like patents make it difficult for new competitors, because the best methods are patented. iii) Costumers loyalty towards existing brands. iv) Advanced technologies make it difficult for new competitors to enter the market because they have to develop those technologies before effectively competing. v) All leading companies are fighting a fierce battle to gain more market share, so there will be heavy retaliation towards any new entry. vi) There is a constant push to innovate and launch new products. There are always possible threats of new entrants in the Phone industry, not necessarily a threat of a new phone company but of new products from established companies. So the company has less danger of further new entrants but it has to be focused on the existing enemies. 2) Threat of substitute products or services-moderate
Presence and availability of substituted products is a great threat for the successful survival of the organization since it can enforce the organization to cut the price of its product. i) The power of substitute products is moderate and it depends on the impact of the substitute products. ii) Smart phones have two primary functions: first to keep people connected through communication. Second is the ability to access and distribute information instantaneously. The substitutes that can perform one or more of these functions include social networking, landlines, newspapers, magazines, e-mails, internet services etc. Many of the smart phones that are available on the market today are already available with a variety of substitutes like social networking, email, internet etc. iii) Smart phones do wide variety of functions so any product that specializes in one of those individual functions can be termed as a substitute. There are many substitutes if the buyer focuses on one of the functions, e.g. digital camera can take better photos then smart phones, notebooks can surf the web just as effectively and PDAs can plan a day the same way a smart phone can. iv) Regarding os, major threat is from substitutes like apple’s iphone and other android devices.
v) When the economy is low the substitute for the smart phone is what we call the dumb phone which is very cheap and can only be used for calling and messaging. In conclusion, the threat of a substitute product is moderate due to the fact a smart phone is no longer just for making calls but for all the other function as well are expected on all smart phones. So, the only real substitute is to buy all the functions of a mobile phone in the individual products which would not be plausible to carry all around on a person at the same time. 3) Bargaining power of customers (buyers)-high Bargaining power of buyer is high so product differentiation is an ideal way to add value to the buyer.
i) The power that customers have is rising because of the increasing number of choices in the mobile telecommunication industry and very little differentiation of products. ii) Less asymmetric information which means buyers have all the required information so they can bargain effectively. iii) With a lot of the One Plus competitors all offering similar packages the industry is very price sensitive with customers seeking out the best value for mone y. iv) Low switching costs make it easy for customers to change the produ cts they normally purchase. v) Demand is highly sensitive to economy, buyers can delay buying new models until the prices come down favorable to them. As One Plus do not have a direct store to sell to their consumers, intermediate stores also have other handsets readily available for the consumers, which makes it difficult for One Plus to have a direct impact on the selling of their handsets. As a result this has created a very price sensitive market because consumers will always be on the lookout for the best deals. In conclusion, the buyers have a high amount of power because of the other handsets they can purchase instead of One Plus.
4) Bargaining power of suppliers-moderate There are two main suppliers in this industry: the hard ware manufacturers and the software developers
i) Although One Plus rely on its suppliers to supply equipment for their advanced mobile phones there are actually a number of large equipment makers, which One Plus could switch to. iii) One Plus is in the position where they can bargain and negotiate with any mobile phone hardware maker because there is a high number of equipment suppliers that are readily available to them . v) Regarding software suppliers there are so many open source mobile operating system providers, options are plenty and hence the bargaining power of software provider is low.
vi) The other important factor is low bargaining power of supplier is that there is intense competition among supplier’s acts to reduce prices to producers. 5) Intensity of Existing Rivalry-high
Competition is intense among existing companies. Although there is no much difference in their products, companies try to differentiate their products in terms of applications and services offered. i) The competitive environment of the One Plus is intense due to the launch of new products from already well-known and established brands. For example Samsung galaxy S6, Iphone 6s and 7. iii) The primary competitors of One plus are smart phones running on Android or Apple OS. v) Competitors like Samsung and have smart phones price starts from as low as 10k where as One Plus initial price starts from 29k so the common people show interest towards them than One plus , making the competition more intense. In conclusion, competitive rivalry is very high and One Plus must be aware of the threat that competitors have on their business especially with the growing popularity of the Apple iphone and Samsung galaxy. One Plus
OnePlus was established on 16 December 2013 by previous Oppo VP Pete Lau and Carl Pei . According to the Chinese government's documentation, the main institutional stockholder in OnePlus is Oppo. Although Lau at first denied that OnePlus was an entirely possessed auxiliary of, end less supply of the administrative filings they conceded that they are claimed by Oppo and are "in converses with different financial specialists" (albeit nothing has been reported to date).The organization's principle objective was to outline a cell phone that would adjust top of the line quality with a lower cost than different telephones in its class, trusting that clients would " Never Settle" for the lower-quality gadgets delivered by different org anizations. Lau clarified that ‘ we will never be distinctive only for being distinctive. Everything done needs to enhance the real clie nt involvement in everyday use.’ He likewise indicated yearnings of being the "Muji of the tech business", stressing its concentrate on great items with oversimplified, easy to understand designs. Continuing Lau's relationship with the stage from the Oppo N1,OnePlus went into a selective authorizing concurrence with Cyanogen Inc. to construct its items' Android dissemination in light of a variation of the prevalent custom ROM Cyanogen Mod and utilize its trademarks outside of China The organization disclosed its first gadget, the OnePlus One, on 23 April 2014.In December 2014, close by the arrival of the OnePlus One in India only through Amazon, OnePlus additionally reported arrangements to build up a nearness in the nation, with arrangements to open 25 official walk in centers in administration focuses crosswise over India . iv Going with the available annual report of one plus (2014) it was pretty evident that their major business is concentrated on Asian markets (with 7 % alone of the global sales in
India alone). The revenue in their first year of operation crossed 300 million. The very number show the tremendous growth being clocked by One Plus shows their passion as well as strategy to be always on their best game v While the percentage contribution of greater than 20k segment declines YoY and may continue to so for a couple of more years, OnePlus is steadily increasing its market share. In its year of launch in 2014, it garnered just 0.7% which jumped to 6.1% in 201 5 and we expect this to reach 6.4% by the end of year 2016. This growth of OnePlus will essentially be based on two pivots of the success of OnePlus 3 and the offline expansion it has just begun.vi Competitive Strategy : OnePlus has asserted its plan of action is more proficient than traditional premium cell phone cre ato rs ; helping the organization offer premium items at lower costs. OnePlus, in
a blogpost, said the brand is more straightforward as they offer their items specifically to customers without mark ups and don't burn through cash on marketing, distribution etc.vii So the basic question that arises is how One plus is able to pull of this worldwide phenomenon in smartphone industry in global scale? there has to some sense of strategy being crafted so as to deliv er the optimum results with bare minimu m use of resources. To understand this we have to understand what went different this time and what are its shortcomings that they have to work upon so that they remain in this highly competitive market of smartphones According to the Karan Sarin, Head of marketing – India, One plus the company adopted lean startup methodology Lean marketing is essentially a non-linear, versatile marketing approach, which includes beginning with a little procedure, actualizing it rapidly, analyzing comes about on the fly, changing and keeping on learning . The above strategy of marketing helped one plus big time as in they had already having the strategic advantage over their competitors in launching and improving their company position in the segment of affordable high end smartphones. viiiix Lean Thinking is fundamentally changing the way supply chains and creation frameworks are running. Among its fundamentals are drawing on the learning and inventiveness of individual specialists, the contracting of cluster sizes, in the nick of time creation and stock control, and a speeding up of process durations. It educated the world the difference between esteem makin g exercises and squander and appeared instructions to incorporate quality with items from the back to front. The Lean Startup adjusts these thoughts to the setting of business, recommending that business people judge their advance differently from the way different sorts of endeavors do. Advance in differently from the way different sorts of endeavors do. Advance in assembling is measured by the creation of high caliber physical products. x
OnePlus' most striking promoting strategy was to start by just offering its phones to customers who got an invite from the organization, conceding them consent to purchase. Welcomes are given out through different advancements and rivalries, while OnePlus customers can likewise impart invites to their friends. The brand has achieved a business volume where it can eliminate the invite model, however this verbal methodology has earned OnePlus a cachet among tech lovers, empowering it to assemble a group of conferred clients that create online fervor about the brand and its items. OnePlus sold 1.5 million telephones all-inclusive in its first year of exchanging – an outcome that, while minor in industry terms, extraordinarily surpassed the desires of Pei and the kindred Chinese tech laborers with whom he established the business. The company especially its founders believes a few bu ying patterns are combining to pull in more customers to OnePlus, for example, the ascent of online -business and the longing among youngsters 'to show they are nov el and discover brands that they relate to '. OnePlus' biggest nation market is India at pre sent, however Europe likewise re presents a no teworthy part of its deals, trailed by the US and C hina. xi OnePlus is tapping into this behavior in several w ays, including a recent decision to o ffer free shipping on all online purchases over £60. In January, the company likewise cooperated with delivery application Henchman for an advancement in focal London where clients had the opportunity to get a free phone if their request was not conveyed to them inside an hour of procurement. ‘Everyone got their order on time – the fastest delivery was about 17 minutes.’ , says Pei . There was also another digital media marketing campaign ‘Smash the past’ where the company encouraged the users to upload videos of them smashing their old smartphones to earn an invite. This marketing gimmick and first mover advantage was a new experience to build a community and loyalists for the company
according to the One plus founder Carl Pei and to gauge the success of the initiative for 100 one plus invites there was a total submission of more than 140000 videos around the globe This utilization of digital channels to drive awareness and sales is normal of OnePlus' showcasing up until now, however the organization has encountered criticism feedback for its utilization of web-based social networking advancements – eminently following after its 'Women First' campaign in August 2014. With an end goal to pull in more female clients
to the brand, the advancement solicited ladies to transfer photographs from themselves for an opportunity to get an invite to buy. The crusade incited outcry among some web-based social networking clients, who called it debasing towards ladies, and it was instantly brought down followin g a couple of hours.xii Another problem that one plu s encounter ed was t o mai nta in their supply chain operati ons to the optimum . OnePlus' high-spec mid-range phones have turned out to be a hit, however production network issues have restricted the organization's capacit y to take a greater share of one of the world's quickest developing cell phone markets To smooth supply channels and cut generation costs, OnePlus went into a concurren ce with Foxconn Technology Co. Ltd in October to make telephones in India, joining any semblance of Gionee and Xiaomi. The Foxconn agreement takes into account a optimum generation limit of 500,000 phones for every month.xiii A great digital marketing strategy should include plans for the good, the bad and the ugly, with a PR crisis management strategy in place, planning for the unexpected. It turned out that OnePlus’ wasn’t watertight. OnePlus trusts its gadgets offer the best strategic offer to its focused-on user groups: flagships for tech savvy clients and the X series for plan and style-cognizant users. India is among the main three markets for OnePlus, the others being the US and Europe. When it propelled OnePlus 2 a year ago in August, it got more than five million enlistments for welcomes inside the initial three weeks of dispatch. As of now, the brand is at a phase where it is crossing the chasm between early adopters and the earl y majority. Early majority users are more worried with the notoriety of the organization — trust, dependability and usability. Henceforth, this year its concentration is twofold — one, to assemble more noteworthy brand mindfulness and two, to reinforce its administration foundation and give world-class after-deals involvement to Indian clients. As indicated by Pei, the brand is 'self-delivering a slower rate of development', a shrewd strategy for an organization that is still in beta. He goes ahead to state that one plus has an 'under 1%' piece of the overall industry of worldwide cell phones, and should change thoughtfulness in the coming years. For instance, OnePlus is presently opening its online store for general deal for one hour for each week. While this is a little stride and still summons that FOMO in conceivable buyers, it is a more extensive chance to p urchase than by means of the 'welcome just' framework. However, absolutely, the faithful fan base that the brand as of n ow has will help them hold development against greater rivalry. xiv
Thus it is safe to say that one plus will try to mark a dent on the market shares of many brand s as per one of the interview with the found er of the company, Carl Pei, he clearly stated one of the incidents that are the strong indicator that in the southern Asia pacific region they are having an uncanny success like others where people are ready to switch from their previous phones of apple and Samsung. One of the incidents that Pei specifically shared in the interview was that even the team of once plus was skeptical for the launch in India as the market survey and research being conducted by the company showed that Indians were very price sensitive country with preference being inclined towards Rs. 600010000 so they were in talks with Amazon for the global sales but the company was adamant of releasing just 5000 handsets but Amazon insisted on 20000 phones sets and after several meetings it was decided that amazon will buy those 20000 at full price thus avoiding any risk associated with the phone will be Bourne by Amazon and not one plus .TO their amazement one plus sold 200,000 handsets to India alone thus making its market share to 7%. Thus, one plus paid special attention to the Indian sentiment while doing any promotional a ctivity as well as they also find that the m ost distinguishin g feat ure for them would be providing a different service experience so they started with mobile door to door service so that their customers would never feel that they were at some stuck position.
While regardless it stays to be seen whether OnePlus will ever achieve the notoriety of any of the greater brands out there, it is verifiable that they began solid from an (digital) marketing perspective. With their vital organization of a coordinated promoting technique, they might not have disrupted the market but rather they have for sure become famous inside the android group. However, crisis management systems must be greatly polished if they want to do anything more than making a ripple on the market surface. The takeaway from OnePlus' marketing strategy: Plan ahead and arrange astutely , don't over-guarantee and, at long last, n ever attempt to hush the popular assessment since it will turn out to be unimaginable and it could undermine your notoriety significantly. The world is feeling the heat being created by the likes of One Plus as they know what it takes to be in the game. With careful planning and speedy operations, they will sure be going to the revolutionize the smartphone market with some success has already being achieved by the disruption in the product life cycle by killing its already stablished flagship One plus 3 by launching One plus 3t. Future course of action:
For any company to sustain in future against so intensive rivalry amongst them that the only logical solution that can help them to be i n this business for a long run are • • • • •
Create a compelling product for tech enthusiasts Sell it direct as a loss leader Limit production to create scarcity Build awareness and demand Sell profitable related products and services
•
Scale production once component costs drop
References i
http://www.forbes.com/sites/eladnatanson/2016/09/12/2016-a-pivotal-year-for-the-smartphone-
industry/#4e0d3cf02f3c ii
https://www.wired.com/2016/04/official-smartphone-market-gone-flat/ http://indianexpress.com/article/technology/mobile-tabs/premium-smartphone-segment-grows-oneplusemerges-as-big-winner-cmr/ iv https://en.wikipedia.org/wiki/OnePlus v https://oneplus.net/global/annual-report-2014 iii
vi
http://cmrindia.com/oneplus-a-case-study-for-emerging-brands-to-imitate/ http://indianexpress.com/article/technology/tech-news-technology/oneplus-business-model-cheaper-premiumproducts-oneplus-3-review-price-specifications-features-2921066/ viii http://www.financialexpress.com/industry/how-to-market-differently-a-lesson-or-two-from-oneplus/235217/ ix http://theleanstartup.com/principles vii
x
https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwj20a6n7qHSAhWKo48KH Xm5BFQQFggZMAA&url=http%3A%2F%2Fwww.stpia.ir%2Ffiles%2FThe%2520Lean%2520Startup%2520.pdf&usg= AFQjCNGF0XwRLHvBQ_Xq2e8Kr2CxFnNT9w&sig2=bcn1utSGG2R1YmdK0PdTzg&bvm=bv.147448319,d.c2I&cad=rja
xi
https://www.marketingweek.com/2016/03/02/how-oneplus-is-taking-on-the-mobilegiants/?ct_58a60d2b2e99d=58a60d2b2ea4e xii http://www.mediavisioninteractive.com/blog/social-media/oneplus-disrupting-mobile-market/ xiii http://www.livemint.com/Consumer/8xHso3lYLETCMHAjvVhSUI/OnePlus-to-narrowly-miss-India-smartphonesales-target.html xiv https://www.marketingweek.com/2016/03/02/how-oneplus-is-taking-on-the-mobilegiants/?ct_58a60d2b2e99d=58a60d2b2ea4e
