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One Plus A new dawn in the smartphone world

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 gad get
which they themselves would utilize.

They announced the company, and then started to work on their first product and thats
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
business sectors 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
premium players like Apple and Samsung. i

Per a different source (IDC), The smartphone market has gone flat. Around the world, cell
phone producers delivered 334.9 million handsets in the prin cipal quarter of 2016, as per
statistical surveying firm IDC. That denote a measly 0.2 percent expansion over a similar
period a year ago, the littlest year-over-year development ever recorded. This implies the
period of crazy cell phone development is everything except over. Apple, which
dependably appeared to be relentless, saw iPhone deals drop 16 percent year over 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 A pple
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. Low cost smart phones with high specs
2. One plus is rising as one of the fastest growing companies
3. Exclusive partnership with major e tailing site Amazon
4. Special android platform Oxygen OS is a big strength since it sets them apart from other
android users
Weakness
1. Limited Production Capacity
2. New entrant
3. Highly competitive industry
4. 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 :

Porters 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, e-
mail, 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 apples 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 money.
iv) Low switching costs make it easy for customers to change the products 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 suppliers 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, endless 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 organizations. 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 it s 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 arriva l 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 creators; 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 deliver the optimum results with bare minimum 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 making 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 buying 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 novel and discover brands that they relate to'. OnePlus'
biggest nation market is India at present, however Europe likewise represents a noteworthy
part of its deals, trailed by the US and China. xi

OnePlus is tapping into this behavior in several ways, including a recent decision to offer
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 following a couple of hours. xii

Another problem that one plus encountered was to maintain their supply chain operations
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 capacity 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 wasnt 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 early 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 purchase than
by means of the 'welcome just' framework. However, absolutely, the faithful fan base that
the brand as of now 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
brands as per one of the interview with the founder 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. 6000-
10000 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 activity as well as they also find that the most distinguishing 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, never 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 in 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/
iii
http://indianexpress.com/article/technology/mobile-tabs/premium-smartphone-segment-grows-oneplus-
emerges-as-big-winner-cmr/
iv
https://en.wikipedia.org/wiki/OnePlus
v
https://oneplus.net/global/annual-report-2014
vi
http://cmrindia.com/oneplus-a-case-study-for-emerging-brands-to-imitate/
vii
http://indianexpress.com/article/technology/tech-news-technology/oneplus-business-model-cheaper-premium-
products-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
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-mobile-
giants/?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-smartphone-
sales-target.html
xiv
https://www.marketingweek.com/2016/03/02/how-oneplus-is-taking-on-the-mobile-
giants/?ct_58a60d2b2e99d=58a60d2b2ea4e