G. H.

PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

BRIEF ANALYSIS OF

“VIVO MOBILES”

Subject: Business Policy and Strategic Management

Submitted to: Dr. K. S. Prasad

Submitted By: Palak Makadia

(17M21)
 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

1. Introduction about product/ organization with relevance to value

chain analysis.
 Vivo Communication Technology Co. Ltd., known as Vivo, is
a Chinese technology company owned by BBK Electronics that designs and
manufactures smart-phones, smart-phone accessories, software, and online
services, which are then sold in India. The company develops software for its
phones, distributed through its Vivo App Store, with iManager included in
their proprietary, Android-based operating system, Funtouch OS.
Vivo was founded in 2009, in Dongguan, China, and was named for
the Esperanto word for life.
 Vivo value chain analysis is an analytical framework that assists in identifying
business activities that can create value and competitive advantage to the
mobile internet company. Figure below illustrates the essence of Vivo value
chain analysis.

 Vivo Primary Activities

 Vivo inbound logistics involves the delivery and storage activities of
raw materials by the company. Vivo has a team of experts who designs
and engineers each of the models. The parts of the smart-phone are
brought in from various suppliers. Also Vivo procures various
electronic components from nearby countries.
 Vivo has already established its presence in India, Thailand,
Philippines, Myanmar, Malaysia, Indonesia, Pakistan, Cambodia and
Bangladesh. The company has announced that it will establish its
presence in around six new regions in the coming months. It will soon
launch in Taiwan, Singapore and Hong Kong. It also has plans to enter
the Russian market. For establishing its presence in the African market,
G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

the company will start with Morocco and Kenya. Later, the company is
expected to spread out to European countries as well.
 Initially, Vivo outbound logistics practices were limited to the
shipment of products directly to end-users via couriers. At that stage
the company was using only online sales channels in order to save
costs and maintain its cost leadership position in the global
marketplace. However, due to increasing demand for Vivo products
and intensifying competition in the market, the electronics and
software company had to open company-operated stores as well. Vivo
has set-up its manufacturing plant in India now.
 Vivo marketing and sales practices are based on its cost leadership
business strategy. The mobile company sells its products using both
online sales channels and traditional offline sales channels as well. The
company uses hunger marketing strategy and flash sales frequently.
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 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

2. Draw a PESTEL model along-with SWOT analysis.

 SWOT Analysis

VIVO SWOT ANALYSIS

1. Vivo has established itself well in South
Asian markets
2. Vivo offers various models in different
price ranges but still keeping its affordable
image intact
3. Vivo has entered Indian market with good
success with sponsorship and visibility
4. It comes from the stable of BBK
electronics, its parent company which also
STRENGTHS owns brands like Oppo
5. Vivo has been associating with big
sporting events like the Indian premier league
6. Vivo is seen as an innovating brand
7. It was the first to launch a phone with HiFi
Chip
8. Vivo has stores in more than 350 cities
9. It is present in 7 overseas market
10. Vivo focuses a lot on R&D
11. Vivo has product facilities in China,
Indonesia and India
1. It still does not have high brand awareness;
WEAKNESSES its main differentiator is cost.
2. Vivo is seen similar to other brands like
Oppo, OnePlus, etc.
1. Vivo can come up with high end smart-
phones which compete directly with Apple
and Samsung.
2. Vivo should work on tweaking its image
OPPORTUNITIES and targeting to more customers who does
not focus only on cost.
3. It has huge untapped market in US and
Europe.
1. Price sensitive competition in mobile
THREATS segment.
2. Local government regulations.
 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

 PESTEL ANALYSIS
This is an important step for eventually devising a strategy that can effectively
manoeuvre the competition to maximize a firm's chances of sustainability and
profitability. An understanding of the overall competitive landscape will
prevent investors and entrepreneurs from partaking in any risky ventures if the
risk arises out of, say, an unstable political regime or a sudden economic
recession.
 Political Factors
The political factors that may impact the profitability or chances of
survival of the company are quite diverse. The political risks vary from
sudden changes in existing political regimes to civil unrest to major
decisions taken by the government. In cases of possible multinationals,
one may also include political factors that take place/ affect not only
the host country but also all countries that contain business operations,
or that may engage in trade with Vivo. To properly appraise the extent
of the overall systematic political risk that Vivo may be exposed to, the
following factors should be considered before taking part in any
investments:
- The level of political stability that the country has in recent years.
- The integrity of the politicians and their likelihood to take part in
acts of corruption, as the resulting repercussions may lead to
possible impeachments or resignations of high level government
employees.
- The laws that the country enforces, especially with regards to
business, such as contract law, as they dictate what Vivo is and is
not allowed to do. Some countries, for example, prohibit alcohol or
have certain conditions that must be fulfilled, while some
government systems have inefficient amounts of red tape that
discourage business.
- Whether or not a company’s intellectual property (IP) is protected.
For example, a country that has no policies for IP protection would
mean that entrepreneurs may find it too risky to invest in Vivo
- The trade barriers that the host country has would protect Vivo;
however, trade barriers that countries with potential trade partners
would harm companies by preventing potential exports.
- A high level of taxation would demotivate companies like Vivo
from maximizing their profits.
- The risk of military invasion by hostile countries may cause
divestment from ventures.
- A low minimum wage would mean higher profits and, thus, higher
chances of survival for Vivo.
 Economic Factors
Economic factors are all those that pertain to the economy of the
country that Vivo operates in, such as changes in the inflation rate, the
 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

foreign exchange rate, the interest rate, the gross domestic product, and
the current stage of the economic cycle. These factors, and their
resulting impact on aggregate demand, aggregate investment and the
business climate, in general, have the potential to make a company
highly profitable, or extremely likely to incur a loss. The economic
factors in the PESTEL analysis are macroeconomic. The economic
factors that Vivo may be sensitive to, and in turn should consider
before investing may include the following:
- The economic system that is currently operational in the sector in
question- whether it is a monopoly, an oligopoly, or something
similar to a perfect competition economic system.
- The rate of GDP growth in the country will affect how fast Vivo is
expected to grow in the near future.
- The interest rates in the country would affect how much individuals
are willing to borrow and invest. Higher rates would result in
greater investments that would mean more growth for Vivo.
- However efficiently the financial markets operate also impact how
well Vivo can raise capital at a fair price, keeping in mind the
demand and supply.
- The exchange rate of the country Vivo operates in would impact
the profitability of Vivo, particularly if Vivo engages in
international trade. The stability of the currency is also important-
an unstable currency discourages international investors.
- A high level of unemployment in the country would mean there is a
greater supply of jobs than demand, meaning people would be
willing to work for a lower wage, which would lower the costs of
Vivo.
 Social Factors
The social factors that impact Vivo are a direct reflection of the society
that Vivo operates in, and encompasses culture, belief, attitudes and
values that the majority of the population may hold as a community.
The impact of social factors is not only important for the operational
aspect of Vivo, but also on the marketing aspect of the organization. A
thorough understanding of the customers, their lifestyle, level of
education and beliefs in a society, or segment of society, would help
design both the products and marketing messages that would lead to a
venture becoming a success. The social factors that affect Vivo and
should be included in the social aspect of the PESTEL analysis include
the following:
- The demographics of the population, meaning their respective ages
and genders, vastly impact whether or not a certain product may be
marketed to them. Smart-phones is mostly catered to teen, so
targeting a majority old and aging population would be less
 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

population than targeting a population that is mostly teen and

working.
- The class distribution among the population is of paramount
importance. Vivo would be unable to promote a premium product
to the general public if the majority of the population was a lower
class; rather, they would have to rely on very niche marketing.
- To some extent, the differences in educational background between
the marketers and the target market may make it difficult to relate
to and draw in the target market effectively. Vivo should be very
careful not to lose the connection to the target market's interests
and priorities.
- Vivo needs to be fully aware of what level of health standards,
reactions to harassment claims and importance of environmental
protection prevail in the industry as a whole, and thus are expected
from any company as they are seen as the norm.
 Technological Factors
Technology can rapidly dismantle the price structure and competitive
landscape of an industry in a very short amount of time. It thus
becomes extremely important to constantly and consistently innovate,
not only for the sake of maximizing possible profits and becoming a
market leader, but also to prevent obsolescence in the near future.
There are multiple instances of innovative products completely
redesigning the norm for an entire industry: Uber and Lyft dominate
the taxi cab industry; smart-phones have left other phones an unviable
option for most et cetera. The technological factors that may influence
Vivo may include the following:
- If Vivo encounters a new technology that is gaining popularity in
the industry in question, it is important to monitor the level of
popularity and how quickly it is growing and disrupting its
competitors’ revenues. This would translate to the level of urgency
required to adequately respond to the innovation, either by
matching the technology or finding an innovative alternative.
- How much an improvement of technology would improve/
transform what the product initially offers. If this improvement is
drastic, then other firms in the industry suffer more heavily.
- The impact of the technology on the costs that most companies in
the industry are subject to have the potential to increase or reduce
the resulting profits greatly. If these profits are great in number,
they may be reinvested into the research and development
department, where future technological innovations would further
raise the level of profits, and so on, ensuring sustainable profits
over a long period of time.
 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

 Environmental Factors
Different industries hold different standards of environmental
protection in their head as the norm. This norm then dictates what
every company should aim for, in the least, to prevent becoming the
target of pressure groups and boycotts due to a lack of environmental
conscientiousness. The environmental factors that may significantly
impact Vivo include:
- The current weather conditions may significantly impact the ability
of Vivo to manage the transportation of both the resources and the
finished product. This, in turn, would affect the delivery dates of
the final product in the case of, say, an unexpected monsoon.
- Those companies that produce extremely large amounts of waste
may be required by law to manage their environmental habits. This
may include pollution fines and quotas, which may place a
financial strain on Vivo
- If Vivo should (knowingly or unknowingly) contribute to the
further endangerment of an already endangered species may face
not only the consequences from the law but also face a backlash
from the general public who may then boycott Vivo in retaliation.
- While relying, in any percentage, on renewable energy may be
expensive, it often receives support not only from the government
but also from its customer base, who may be willing to pay a
premium price for the products that Vivo may produce.
 Legal Factors
The government institutions and frameworks in a country while
technically also political and thus subject to whichever political party
holds the majority in a government body, are also legal and thus should
be considered in a PESTEL analysis. Often Vivo policies on their own
are not enough to efficiently protect Vivo and its workers, making
Vivo appear an undesirable place of employment that may repel
skilled, talented workers. The legal factors that deserve consideration
include the following:
- Intellectual property laws and other data protection laws are, as
mentioned earlier, in place to protect the ideas and patents of
companies who are only profiting because of that information. If
there is likelihood that the data is stolen, then Vivo will lose its
competitive edge and have a high chance of failure.
- Discrimination laws are placed by the government to protect the
employees and ensure that everyone in Vivo is treated fairly and
given the same opportunities, regardless of gender, age, disability,
ethnicity, religion or sexual orientation.
- Health and safety laws were created after witnessing the horrible
conditions that employees were forced to work in during and
directly after the industrial revolution. Implementing the proper
 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

regulations may be expensive, but Vivo has to engage in it, not

only due to the law but also out of Vivo's personal feeling of ethical
and social responsibility to other human beings.
- Laws are also placed to ensure a certain level of quality or
reasonable price for certain products to keep the customer safe and
prevent them for being provided. The industries this applies to find
often their costs elevated.

3. Explain the industry’s dominant economic traits.

 The following are the details of mobile phone industry’s dominant economic
characteristics.
 Market Size:
The smart phone industry is one of the fastest growths besides the
Internet. Smart phones have gone through a huge change and its
market has expanded globally. Since 1994, the smart phone industry
has increased from 24 million to about 182 million in wireless phone
and related devices operating in the United States with some 162-
million mobile-phone users in the United States alone.
The smart phone market is increasing very fast with today’s ever-
emerging technology and innovation in improving smart phones.
Today, society is living with advance technology and everyone wants
to keep pace with the new technologies. Smart phone industry is
growing larger because it has become a necessity. Parents are getting
mobile phones for their teens because they want to communicate in
case of an emergency and the wireless carriers have made it easy to
add users to their existing plans. And carriers are becoming successful
in getting parents to expand their plans to include their teens. This
increases buyers and increases market size worldwide.
 Scope of Competitive Rivalry:
The smart phone industry has become increasingly larger within the
last three years as a result of more affordable smart phones as well as
lower service costs. Companies are competing in an advance
technology and communication sector in which success attracts
customers to buy their products and services. The market is very
competitive because they offer the same products and services, but has
different physical attributes to the phones and different costs, which
buyers have choices to choose from. Companies want to provide the
best products and services to attract buyers by lowering cost and
improving products, which makes the smart phone industry very
competitive. Here are the main factors of competitive rivalry:
- Smart phone cost: Customers wants better services and products at
a lower cost.
- Bundle functions into just one smart phone: For example E-mail,
text messaging, internet
 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

- New technology improvement: For example camera phones

- Better landline services
 Stage in Life Cycle:
The smart phone industry is in the Mature Life Cycle Stage, where
nearly all-potential customers are already users of the industry’s
product. The smart phone industry’s growth and profitability depends
entirely on its ability to attract new customers. By increasing and
improving the smart phones and services, it will attract more potential
buyers, because technology alone will not attract buyers, instead
companies want value-added services for mobile-phone securities.
Smart Phone companies attract buyers in two ways during the Mature
Life Cycle State:
- Service: Making smart phone more affordable will attract buyers
to buy more smart phones and increase competition between
companies to lower service fee.
- Innovative Phone Style: The new designs and improvement in the
physical appearance of the smart phones, and more add-on features
attracts customers to buy it at a higher rate.
 Numbers of Companies in the Industry:
There are over 50 companies with only five top companies in the smart
phone industry that controls 80 percent of the market. Even though
there are emerging new companies into the market, they are relatively
small. The five top companies are rank as follow as the largest to the
smallest smart phone company:
1. Samsung
2. Apple
3. Xiaomi
4. Lenovo
5. LG
Vivo has a market share around 7% in 2018 making it one of the
leading brands in India.
 Customers:
Smart phones are attractive targets that are small, expensive, and
useful. Today there are approximately 162 million mobile-phone users
in United States alone. With the list of features and data applications
available on mobile phones, which is continuing to grow and emerge;
smart phones are not only a luxury but also necessity. Smart phone
users use smart phones for more than just talking; the mobile services
consumer wireless usage study found that 56 percent of customers used
their smart phones as cameras, clocks, calendars, music players, and
other non-talk functions. Also, most smart phone owners are between
the ages of 18 to 34.
 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

 Technology/Innovation:
Technology and innovation are advanced every year making the
industry even more competitive. Smart phone companies that design
and make evolutionary upgrades are emerging into the market to be
more competitive. Here are some new technology and innovations on
smart phones:
- Unlicensed Mobile Access (UMA) will help those who have high-
speed Wi-Fi routers overcome poor reception coverage in their
houses or apartments. This is also a way for mobile carriers to
expand without spending a lot of money on new infrastructure. It
enables lots of users who use handsets to wirelessly download
content at broadband speeds while travelling.
- Smart phone tour guides: Provides buyers with guides of places
they want to see. For example. Weaver’s and Stiller’s voices are
used as narrators in Talking Street that shows a series of smart-
phone tours from Manhattan to the World Trade Centre. The
technology is meant to be more vivid and more exciting than books
or live tours. Some in the industry believe that this new technology
saves time and money. Also, not all mobile-phone tour services
charge a fee for using the service.
- VOIP on mobile phones will help cut smart-phone bills most of all for
international users based on the assumption that if consumers are
already paying for a data plan, will route international calls over their
phone’s data connection using VOIP and can save considerable money.
 Product Characteristics:
In the smart phone industry, the products and services are highly
standardized. In the past, the products differentiated in smart phones
and services. Today, with more technology enhancement, the products
in different companies are essentially similar. Since this is a smart
phone industry, there is a maximum amount of products and services
that consumers can choose from.
Vivo phones come with some special features like:
- Smart Touch
- Air Operations
- Smart Motion
- Flashlight on shake
- Rear Fingerprint Sensor
- Face Unlock
 Scale Economies:
There are two types of economies of scale pertaining to the smart
phone industry. They are the internal and external economies.
1. Internal: Internal economies of scale are economies made within a
company as a result of mass production. So as a company
 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

produces more and more products and services to consumers, the

average cost begins to fall so the companies should focus on the
following six factors:
- A technical economy: when the companies use its entire means to
generate revenues and increase profitability. This includes
spending a large amount of money on capital to start the company.
- Managerial economies: when the company splits up managerial
duties to meet specific company goals and values. This in turns
helps to complete specific tasks and improve the company to better
service consumers.
- Financial economies: smart phone companies borrow lots of money
to purchase capital in order to create products for consumers.
- Marketing economies: where smart phone companies spends a lot
of money to advertise their products and services on television and
in newspapers everyday to reach consumers across nations.
Companies resorts to marketing in hope of attracting more
consumers to try their products and to generate higher profits and
revenue.
- Commercial economies: smart phone companies order their
products and supplies in bulk at a lower rate rather than buying
them separately.
- Research and development economies: the smart phone companies
are continuously developing new and advance technology smart
phone to be in pace with the competitive market.
2. External: The external economies are made outside of the company
as a result of its location. Most smart phone companies have a
corporate headquarter that concentrates on the following to keep
track of the company’s progress.
- Smart phone companies have licensed franchises that operate to
sell products and services to consumers. They have a network that
connects them to manufacturers, service carriers, and main
corporate officer that is the backbone of the stores and products it
sells.
- The smart phone companies works closely with service carriers to
provide phone service such as clear phone calls, not lost calls, and
good receptions.
- The companies work and communicate directly with manufacturers
reputable for the new phones enhancement, upgrades, and features.
 Learning & Experience Effects:
The major complaint found in the smart phone industry was cost and
services. So to improve their service, the company has increased the
training for customer service employees, and introduced a new plan to
address common complaints; also tied executive compensation to
 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

customer satisfaction. There are more options that buyers can choose
from.
 Capital Requirements:
The smart phone companies require large capital to enter and remain in
the market successfully. Companies require capital to create products
that attracts consumers and for total assets and revenues to enlist other
products and services that are featured with smart phones. Smart
phone companies work with manufacturers to create new technological
and innovative smart phones in the market today to attract consumers.
A valuable capital in the smart phone industry is the consumers
because revenue and profits depends on them who buy the companies’
smart phones.
New products are introduced continually, technology evolves on a
daily basis, and customers are eager to become part of the future of a
wireless society. This makes the market very competitive and large
companies that have big economies of scale provide a highly
automated service to a large number of customers, and have the
financial resources required in building and maintaining a large
network of communications devices. Smaller companies can also
compete, but only in small markets or by provide specialty services.
 Industry Profitability:
The cell phone industry will remain a competitive market and will
increase continuously with a total of 1,200 wireless companies with
total annual revenue of $100 billion. The profitability of individual
companies is driven mainly by their ability to develop new products,
providing better service, making their products affordable for
consumers. Profitability of companies is achieved also by taking
advantage of marketing their products, have access to capital, and by
inquiring the expertise to improve the cell phones.

4. What kind of competitive forces are the industry members facing?

 Porter’s Five Forces is an analytical framework developed by Michael Porter.
Porter’s Five Forces consists of five individual forces that shape an overall
extent of competition in the industry.
G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

 Intensity of Rivalry within the existing firms

This refers to the level of completion between competitors and rivals
through advertisements, product quality, price wars, differentiation and
other strategies. Rivalry in the smart phone industry is moderate,
because customers tend to have high brand loyalty at the high end of
the market. The industry has huge customer base of over 968 Million
worldwide. The Industry is growing at rate of 28- 30% worldwide and
at 168.8% in India. Top players in smart phone market include
Samsung, Apple, Huawei, Lenovo, Xiaomi and LG. Samsung is
dominant player in the smart phone market with nearly 25% market
share in the second quarter of 2014. This share has come down from
32.2% from a year before. Apple has lost 2% from previous year to
settle down at 11% in the second quarter of 2014. On the other hand
Xiomi emerged as a new player in the smart phone market which has
seen increase in market share from 1.8% to 5.10% in just one year.
Rivalry in smart phone industry is stiff with the target being standard
phone features like the software’s used and security, cameras, screens,
touch screen quality. Vivo faces maximum rivalry from Oppo,
OnePlus and Xiaomi as they offer similar product with almost
undifferentiable features and that too for the equivalent value for
money.
 Intensity of Supplier Power
This refers to the bargaining power of suppliers which is their ability to
exert pressure and influence competitors to increase their prices
leading to their profitability and other benefits at the expense to the
supplier’s profitability and even on suppliers and their power in the
smart phone industry observed that Apple has managed a complex
chain of suppliers that are spread globally over several nations and on
the other hand Vivo uses a very simple supply chain. This huge
number of limits their bargaining power with Apple.
 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

General parts and components suppliers do not have substantial

bargaining power due to the importance of Vivo’s order volume and its
ability to negotiate prices with suppliers. Therefore smart phone
manufacturers have a stronger power over suppliers for most parts but
the software’s used with Google and Microsoft having an upper hand.
This shows that not all suppliers for smart phone manufacturers have
the same influence with software suppliers having more power over the
manufacturers compared to parts manufacturers.
 Threat of Substitutes
Threat of substitutes refers to the level to which products and services
can be exchanged with other products and services in the competitive
market. Smart phones can be substituted by tablets in the market which
have similarities in terms of device interface, apps and functionality.
However, smart phones may prove quite attractive to more customers
because with similar capabilities, they come in unique shapes, sizes
and functionalities.
 Threat of New Entrants
According to Porter new entrants influence the level of profitability
and industry attractiveness and identify six barriers to new entrants.
The start-up costs for new smart phone manufacturers are extremely
high hence low threat by new entrants as this makes entry difficult.
However few entrants continue to join the industry particularly those
targeting low and middle class customers. Vivo entered the Indian
industry in 2014 and become the one of the largest smart phone
company.
 Purchasing Power of Buyers
Bargaining power of buyers refers to the ability of buyers to exert
pressure or influence competitors in an industry leading to their profit
reductions, better quality and better services at the expense of the
competitors. Smartphone manufacturers Vivo need the customers who
can easily be lured by the rivals products and prices. This ultimately
grants smart phone customers’ moderate to high bargaining power over
the smart phone manufactures. With low switching costs, their position
bargaining power is further strengthened. The customer demand is
elastic and highly price sensitive. Therefore to manage buyer power,
smart phone manufacturers should develop affordable, diverse and
easily accessible phones.

5. What factors are driving industry changes and what impacts will
they have?
 Below are listed various factors that drive the industry change:
 Changes in who buys the product and how they use it:
G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

The target market of the smart phone is young generation. There are
two parts of the young generation that are students and working class.
Students want to have smart phone, there are about 80 percent students
who own a smart phone at college in 2017, compared with 38 percent
in 2009. The 97 percent of students use messages for their primary
communication method and people who are in corporate use email to
communicate to each other. There are about 90 percent of smart phone
users that use their phone to surf the internet. About 97 percent of the
users take and upload photos and 87 percent of the owners other
applications. Vivo has taken this change in consideration and added
special features like high speed internet facility (4G), good quality
cameras, high internal and expandable memory and a long battery life.
 Increasing globalization of smart phone industry:
The demand of the smart phones is growing rapidly worldwide,
because of mobile internet becomes more popular. More and more
people start to buy a smart phone, because of the trend market. Smart
phone has replaced the otherwise traditional phone. Vivo positions its
mobiles as the medium to connect to the world. With the changed basic
needs of today, i.e. to remain in constant touch with everyone,
anywhere, the 4G, video calling and the likes are the features
incorporated in the Vivo mobiles.
 Changing societal concerns, attitudes, and lifestyles:
Smartphone has changed the way people used to be. First, the
communication between the people has changed. People use social
media to communicate to each other. “Facebook user base has risen to
430 million year-over-year, roughly the same increase as QQ in China.
Twitter, while sporting only 58 million users experienced a 1238%
year-over-year growth rate. Facebook now dominates in chat,
messaging, video sharing, games, VoIP and more. People want to
check the social media instead of text message and give a phone call.
Vivo smart phones can give people the latest news from the social
media anywhere and anytime. Second, the lifestyle has changed.
People used to go to the bank to make transaction and deposit the
check. Now with the Vivo’s “vivoCloud”, one can easily keep all their
data safe and secure without the worries of losing it in some accidental
action.
 Industry life cycle:
There are five stages of the industry life cycle. In the embryonic stage,
the industry starts to begin and develop the product to the public. In the
growth stage, the company produces more products and increases the
market share. In the shakeout stage, some of competitors start to see
the opportunities in this market. In the maturity stage, the product price
is stable and more competition comes to market. In the decline stage,
the sale of the product decreases until the product innovation or
discontinue in the market. The Vivo smart phones have reached the
G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

growth stage like all other members of this industry. The demand for
the smart phones has stagnated; rather the customers now want an
updated version or new features. The sale of the smart phone was 174
million units in the 2009; there were 270 million units sold in 2010.
 Internal Analysis:
Value Chain- The value chain is that an organization creates value by
performing a series of activities and it represents how each competitive
advantage created via an organization adds value to the service or
product for each customer. In the Vivo Mobiles, R&D, Production,
Marketing & Sales, Customers Service and Human Resource are
adding the value to their company.
 Research and Development:
Vivo is extremely concerned about research and development
department. Leading smart phone manufacturer Vivo has been
recognized as having the 5th-highest shipment volume among global
smart phone manufacturers per IDC's 2017 Q1 report. This recognition
comes as Vivo has been expanding its global research and
development (R&D) capabilities, with a focus on 5G technologies and
integrating them into its cutting-edge smart phones. To drive future
breakthroughs that will take their smartphones' performance and user
experience to the next level, Vivo has established seven R&D centers
worldwide, including two in Silicon Valley and San Diego, as well as
five in Shenzhen, Dongguan, Nanjing, Hangzhou and Beijing, China,
where it will continue to develop in-house smart phone technologies
including 5G, mobile camera, and Hi-Fi music technologies that appeal
to its customers. At Vivo's Beijing R&D centre the company engages
in the research of new 5G technologies. Engineers leverage their
insights into more than 100 million of Vivo's global smartphone users'
experience to develop 5G technology that offers an upgraded user
experience. The company's Hangzhou R&D centre is responsible for
photography technology research, while the institutes in Silicon Valley
and San Diego are focused on core technologies that support Vivo's
fundamental algorithm photography technology development.
 Production:
Vivo has grown very fast. Vivo has unveiled the world’s first Half-
Screen In-Display Fingerprint Scanning Technology on Vivo
APEXTM , along with Screen SoundCasting Technology and an
Elevating Front Camera. Vivo needs to make sure their suppliers to
increase productivity in order to meet the demand of the market. Vivo
needed more manufacturing plants and facilities to meet the increasing
demand of Vivo Mobiles and so it established plants at Dongguan,
Chongqing, India and Republic of Indonesia. Vivo pay attention on
their quality from each of the product that they produce.
 G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

 Marketing and Sales:

In October 2015, Vivo became the title sponsor of the Indian Premier
League under a two-year deal starting in the 2016 season. In July 2017,
the deal was extended until 2022.
In June 2017, Vivo reached a sponsorship deal with FIFA to become
the official smartphone brand of the 2018 and 2022 FIFA World Cups.
The company also became a title sponsor of India's Pro Kabaddi.
Vivo has a sponsorship deal with the U.S. National Basketball
Association in China, with Golden State Warriors player Stephen
Curry endorsing the brand in China and the Philippines.
The company contracted product placement with Marvel Studios for
Captain America: Civil War, in which Vivo phones are used by both
Captain America and Iron Man.
 Customer Service:
Vivo is one of the companies that has undoubtedly performed
exceptionally well. Company’s aim to target the financially middle
class Indians who prefer budget friendly phones that comes with
features that are as good as you can find in premium class smart
phones. The reason Vivo has managed to win millions of customers is
because of its good after sales services. For this there are many Vivo
service centres in Indian cities where customers are provided product
related services.
 Human Resources:
The most valuable asset in Vivo is employees. In recent years, Vivo
hires recruits outstanding talent to its ranks in the areas of product
design, user interface, brand promotion and sales and marketing. Vivo
also hire the professionals’ employees from across the globe that
makes Vivo increases their diversity, challenging, vital and
encouraging.

6. What are the key factors for competitive success?

 Apart from the value chain and the technology, factors that play an important
role in gaining competitive success are:
 Pricing is one important element that shall decide the fate of a mobile
phone instrument. Recent surveys suggested that Indian Mobile Phone
manufacturing Companies have gained considerable market advantage
and forayed into the MNCs (Multi National Corporations like Nokia,
Samsung, Sony Erickson, LG, etc.) markets due to the pricing
advantage. This is noticed especially under the Rs. 5000 category.
Vivo has been able to use this factor to its advantage. It manufactures
budget friendly mobiles and has a wide reach over the youngsters
specially. They provide the best value for money smart phones.
G. H. PATEL POST GRADUATE INSTITUTE OF BUSINESS MANAGEMET

 Product Differentiation (Features) plays a key role in consumer

decision making. This is clearly evident from the rise of sales of
internet mobile phones. Companies that have given access to the net
with speed and accuracy are marching ahead in this segment. Vivo
introduced the fingerprint scanner unlock, vivoCloud, Smart Motion
and Air Operations feature which set them apart from others.
 The most popular features other than calling are Music Player (MP3),
Internet, Touch Screen, and Dual Sim.
 Promotion plays a vital role in making or breaking a brand. It is not
enough to have good product and pricing strategy but it is of immense
significance to have a broad band of promotional programmes. Hence
Vivo has used various mediums for the same like sponsoring various
sports events across the world, product placement in the big banners
like Marvel Studios, etc.