Analysis of Sprint PCS Essay Example | Topics and Well Written Essays - 750 words

Analysis of Sprint PCS - Essay ExampleWhile in services important costs argon connected to equipment maintaining those services and have little impact on prices (which ar mainly formed by customers demands), mobile phones have a lot of issues on manufacturing and especially testing product costs. One hundred percent of mobile phones are tested to ensure regulatory and standard compliance, where many other consumer electronic products are merely sample tested. (Strickler, 2004). Additionally, mobile phones have ultra-short life cycles comparing to other consumer electronics, which is followed with more funds spent on designing new models. As most of the manufacturing of Sprint is outsourced to China manufacturing labor costs are con arrayred to be low. Still in the context of aggressive rival in the wireless manufacture they must be taken into account.Recent years have been regarded as productiveness increasing due to technological innovations in manufacturing. Raw materials neede d for labor of cellular phones are the industry without a clear cut leader, which along with decreasing overall waging costs and at the same time slight growth in average wages had a positive influence on productivity and average total costs of cellular phones as labor productivity growth settles in near its longer-run trend of 2 to 2-1/2 percent, increases in unit labor costs may begin to put some upward(a) pressure on prices, offsetting possible moderation in nonwage costs (Bernanke 2005).As iMarket StructureAs it was stated earlier cellular phone industry is precise dense leaving no free space to possible new contenders. Market structure in mobile services is an oligopoly, when power is concentrated in the hands of several key players, that is Cingular, Sprint, T-Mobile, Verizon etc. Position of Sprint in mobile phones industry is comparatively weaker, major players are Nokia, Motorola, Siemens, Alcatel and Sony Ericsson.Such heavy competition along with the wide choice of ven dors available to customers creates implications on pricing. Simply there is very little space for adjusting prices because a company has to stay close to its main pricing curve. Cellular phones have evolved from a hi-tech gadget to an everyday life commodity negatively affecting prices, which continue to decrease. On the other side extremely wide audience of consumers and further shortening life-cycle increases amounts of cell phones sold.Recent performance of Sprint shows that while the customer base of the company continues to increase its revenues are the same as two years ago. Sprints subscriber base grew 110% but its market share has barely changed since June 2002. Price erosion and competition has cut back Services revenue by 19% (Alexander Resources, 2005) Moreover the company experiences low customer satisfaction recently found by Strategy Analytics Sprint PCS posts under average ratings on many measures, though the carrier does redeem itself somewhat with a well-received product and service range (Wi-fitechnology.com 2004).Therefore Sprint PCS needs changes in its strategy for further development. First of all, if bigger is not better Sprint needs to reduce the distance between the company and a certain customers group. second it should pay more attention to the quality of its products to increase customer satisfaction with more added value.Economic ForecastBasing on the macroeconomic forecast presented by the acquire team (Hahn et al 2005) I have selected the following factors that will affect the demand of