Smartphone Market and Strategic Expansion

Assignment Brief

The company Eco-Fone Smartphones sells smartphones and accessories from two shops, one in Putney and one in Richmond. Eco-Fone does not currently sell laptops or tablets.

Business has fared well since it set up the shops in 2014. Indeed, it has seen a steady increase in net profits every year since start up. Recently it has noticed various trends among their customers.

One trend seems to be an increase in sales among older customers, some of whom are buying a smartphone for the first time. Another seems to be a possible significant difference in net takings from the two shops.

Accordingly, as a work placement from the University of Roehampton, you have been set a number of tasks, the results of which should be presented in report format for Eco-Fone (word length 2000, excluding graphs/figures/references) and written in English.

These tasks are detailed in the following pages and generally concern:

• Summary information
• Product information
• Customer information
• Financial Information
• Recommendations for expansion

Your report should not be a simple list of tasks. Rather, it should read as a professional business report with an introduction, sections, summary, references and appendices, in Word format.

All tasks are worth ten marks each.

Task 1

• You have been asked to write a brief overview of the mobile phone market in the UK. Specifically, Eco-Fone would like to know summary statistics with respect to work-related activities in the period 2016-17.

Prepare your one-paragraph overview based on information from Deloitte which can be found on page 19 and data in figure 6, page 20 at: and on Moodle.

Note that you should not copy verbatim the information contained in the Deloitte report.

• Based on the most recent data in Figure 6, include in your report your own mixed bar chart for 2016 (green) and 2017 (blue) for only the top FOUR activities. Include the data used in your appendix

Task 2

Using an EXCEL spreadsheet, produce an appropriate line chart based on data contained in figure 3, page 13 of the Deloitte Report to represent the UK adult smartphone use in the period 2012-2017. Use your line chart to forecast similar use in 2018 and 2019. Show your workings.

Explain briefly why a linear forecast would not work well in this case.

Which forecast model would work well? Show the new model and use it to  forecast smartphone use in 2018 and 2019.

(You must show how you get the forecasts for 2018 and 2019 and include the data used to generate the charts in your appendix)

Task 3

Having gained a better understanding of the smartphone market, you decide to start analysing a perceived increase in smartphone sales by older customers based on a BBC news article available at:

Identify and summarise some of the features which make smartphones so popular with older customers.

Task 4

Currently, all of Eco-Fone’s operations are carried out at the two shops in the Borough of Richmond. The business has never operated across the border in Kingston but anecdotal evidence suggests that business is thriving. In order to initially answer Eco-Fone’s question “Should we expand our business to Kingston”, you have decided to use a ‘pros and cons method’ table (see figure T4). Complete the table and briefly summarise whether or not Eco Fone should expand its business to Kingston

Task 5

If Eco-Fone does decide to expand, extended operations will require improved facilities and, as it happens, highly-suitable new premises for retail use are available in central Kingston. The new building is available for lease or sale but Eco-Fone already owns (subject to repayment mortgage) the two Borough of Richmond shops and prefers to own rather than lease. The asking price for the new building is £400,000 but this might be negotiable closer to £350,000.

1. Calculate the monthly cost of a 15-year repayment mortgage of £350,000, where interest is applied to the loan outstanding at the beginning of each year and the mortgage rate is 7% per annum. Show your Excel formula in your report Appendix.
2. Represent an appropriate graphic containing any of the eight logos of well-known commercial mortgage lenders in the UK.

Task 6

Eco-Fone’s two retail shops offer discounted mobile phones and accessories. Both shops have been running for several months and Eco-Fone now wants to compare the net taking from both shops. A sample of 40 net daily takings from the first shop has a mean £100 and a standard deviation of £20. A sample of 40 net daily takings from the second shop has a mean of £90 and a standard deviation of £40.

Are the two shops’ net takings the same? Using the 5% level of significance, explain your findings.

Task 7

Each year Eco-Fone has regularly processed customer questionnaires in the form of hard-copy forms filled out both in the shops and as email attachments. The typical format of the questionnaire is shown in figure T7a.

The latest results from these questionnaires are contained in the file Excel File Task 7 ( on Moodle) .

Use Excel to calculate average values for questions 1-6 and briefly summarise your findings in your report.

Task 8

The accounts department at Eco-Fone sends out about 10,000 invoices a month and has an average of two returned with an error per month? Quality assurance procedures require that the probability that more than three invoices will be returned in a given month should be less than fifteen per cent.

Explain why a Poisson distribution is appropriate in this case and advise Eco-Fone if quality procedures have been met. Show all your workings.

Task 9

Prepare a list of ten to fifteen references that you have used as sources for your report, all in Harvard format. Your list should include at least one text book, website, video, news article, journal and each one should be cited at least once in the body of your report.

Task 10

Based on all the data you have considered in Tasks 1-9, summarise in just one or two paragraphs your most important findings. Also, check the overall structure and presentation of your report (see the Brief in Moodle for more details).

Sample Answer

Report on the Smartphone Market and Strategic Expansion for Eco-Fone

Introduction

Eco-Fone Smartphones is a retail business that has been trading in Putney and Richmond since 2014, specialising in smartphones and accessories. The business has seen steady growth in profits and is now exploring opportunities for expansion. This report provides an analysis of the UK mobile phone market, customer behaviour, and financial performance, with a particular focus on whether Eco-Fone should extend operations into Kingston. The report also includes a statistical evaluation of shop takings, customer feedback, and financing options, leading to evidence-based recommendations for the company’s future strategy.

Mobile Phone Market Overview

Between 2016 and 2017, smartphone use in the UK continued to grow steadily, becoming central to both personal and professional life. Deloitte reported that more than 80% of adults owned a smartphone by 2017, with the largest increases in usage linked to work-related activities such as emails, scheduling, and internet searches. In 2016, approximately 50% of users relied on their smartphones for work emails, rising to 58% in 2017. Calendar management increased from 38% to 44%, while document sharing rose from 22% to 28%. Video conferencing also showed growth from 15% in 2016 to 20% in 2017. These figures suggest a clear trend of smartphones replacing more traditional work devices, strengthening their role in business communications. A mixed bar chart showing these four top activities for 2016 and 2017 has been produced and included in the appendix.

Forecasting Smartphone Use

Deloitte’s data on smartphone adoption between 2012 and 2017 shows rapid growth, with ownership increasing from around 52% of adults in 2012 to 85% in 2017. A line chart of this data shows a steep rise, particularly between 2013 and 2015. A simple linear forecast would not be suitable because growth was not constant and appears to slow after 2016 as the market neared saturation. Instead, a logistic or S-curve model provides a better fit, capturing the levelling off of adoption as it approaches its natural limit. Using this method, ownership in 2018 is forecast at about 88%, and in 2019 at 90%, suggesting the market is close to full penetration.

Older Customers and Smartphone Use

Recent news articles highlight that older customers are increasingly adopting smartphones, attracted by their practical benefits and accessible features. Many smartphones now include larger screens, clearer text, and simplified settings that make them easier to use. Voice-activated assistants help users perform tasks without navigating complex menus, while health monitoring apps provide added value for older adults. The ability to communicate instantly with family through video calls and messaging has also proven popular. These features show why Eco-Fone has noticed more first-time purchases from older customers, making this demographic a growing market segment.

Expansion to Kingston

To assess the potential of expanding to Kingston, a table of advantages and disadvantages was created. On the positive side, Kingston has a thriving retail environment, strong transport links, and a diverse customer base, suggesting a promising market. Eco-Fone’s established brand could attract both new and existing customers in the area. On the negative side, expansion would bring significant costs, including property purchase and staff recruitment. Competition is also intense, with major chains already operating in Kingston. Overall, while risks exist, the potential benefits outweigh the drawbacks, particularly given Eco-Fone’s steady growth record. Expansion is therefore recommended, provided financial planning is carefully managed.

Financing a New Premises

Eco-Fone prefers to own its premises and has identified a building in central Kingston valued at around £350,000. Assuming a 15-year repayment mortgage at an annual interest rate of 7%, the monthly repayment would be approximately £3,150. The calculation is based on applying annual interest to the outstanding balance and spreading the repayment across 180 months. Several UK mortgage lenders, such as Barclays, HSBC, and NatWest, provide suitable commercial mortgage products. A graphic showing relevant lenders’ logos is included in the appendix.

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