Student ID- 18443839

Eco-Fone Smartphones.

MODULE: Business Data Analysis.

BUS020C408S

MODULE CONVENER: SOUAD SLYMAN

WORD COUNT: 1960

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Introduction:
Eco-Fone Smartphones is a company that first started in 2014, that currently only focuses on selling
phones and phone accessories. Having only two stores open at the moment, it is located in South-
West London’s Richmond and Putney. During the past five years Eco-Fone Smartphones has been a
success, having a steady increase in net profits year by year. Recently Eco-Fone Smartphones has
noticed a variety of trends among their customers. Taking a look at various factors about the
company, there will be an analysis done on different factors throughout the report to decide
whether or not Eco-Fone should expand or not.

1. Analysis of Issues for Eco-Fone Smartphones:

An Overview of the Mobile Phone Market in the UK.

Do you use your smartphone for any of the following

activities?
Percentage of people who use it.

60%
50%
50% 41% 44%
37%
40% 33% 32%
30%
20%
8% 6%
10%
0%
Email Making standard Managing my None of these
calls time/workload

Activity people use their smartphones for

Figure 1.
2016 2017

Smartphones are a major use in the UK, and are used by many people for many different reasons on
a daily basis. In 2017, there were 32 million people working in the UK, and over half of them used
their smartphones for work related activities (State of the smart- Consumer and business usage patterns,
2017). The most common used applications used were: email-44%, voice calls- 34%, calendar- 23%;
the most common social media platform used by UK workers is Whatsapp (an instant messaging
application), having over 43% of the UK workers using it at least once a day (State of the smart-
Consumer and business usage patterns, 2017). It is estimated that soon, PC’s will become less used while
smartphones become more commonly used as they are the ‘’ideal information device’’ (State of the
smart- Consumer and business usage patterns, 2017). Another reason why the smartphone is becoming
more commonly used amongst UK workers is due to many workers having jobs that require them to
be mobile, so using technology such as computers or laptops is inconvenient for them.

Based on a ‘Global Mobile Consumer Survey’ in 2017, where people were asked ‘’Do you use your
smartphone for any of the following activities?’’; it is noticed that many people use their phones for
work related activities, for example in figure 1 we can see that the ‘email’ application is used the
most having 41% of the people asked using it in 2016, however is has decreased to 37% in 2017; as
well as the usage of other work related activities decreasing between 2016 and 2017. Adding on, the
survey’s results implied that compared to 2016, people are mostly using non-work related
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applications in 2017, this is because the ‘none of these’ category had increased from 44% to 50% in
2017, compared to being 44% in 2016 (State of the smart- Consumer and business usage patterns, 2017);
this suggests that people are gradually starting to use their smartphones for other reasons and not
just for work related purposes.

Forecasting the UK Adult Smartphone use.

Percentage of UK adults who use smartphones

100%
85%
90% 81%
76%
80% 70%
70% 62%
Percentage

60% 52%
50%
40%
30%
20%
10%
0%
2012 2013 2014 2015 2016 2017 2018 2019
Figure 2.
Year

Based on figure 2 we can see that between the years of 2012 and 2017 the percentage of UK adults
who use smartphones has increased by 33%, suggesting that year by year it is becoming more
common within adults to use smartphones. Based on the forecast shown in figure 2, it is also
suggested that this trend will likely continue and carry on increasing, resulting to roughly 90% of UK
adults using a smartphone in 2019.

The forecast in the line graph in figure two is a ‘logarithmic forecast’ rather than a ‘linear forecast’,
due to a logarithmic forecast being more appropriate compared to the linear forecast. This is
because a linear line forecast is used for data that increases or decreases at a steady rate, and the
line on the graph is close to straight (Using a Spreadsheet to Add a Trendline, 2010). However, the data
used in this figure increases quite quickly, therefore using a logarithmic forecast is appropriate for
this data, since logarithmic forecasts are used for data that increase and decrease quickly (Using a
Spreadsheet to Add a Trendline, 2010).

Smartphones – A potential market for older customers.

Over the recent year’s smartphones have become increasingly popular within adults, this is due to a
number of different factors. Deloitte has suggested one reason why smartphones are becoming
popular within adults may be due to income being ‘’higher than average’’ (Kelion, 2017), allowing
them to be able to afford premium phones. It was also suggested that many of the adults will have
gotten hand-me-downs from their children (Kelion, 2017), which again could explain the increase of
the rates of adults using smart-phones. Deloitte’s research team also suggested that some of the
adults who were first-time buyers might have ‘’felt forced’’ into buying a smartphone, this is due to a
many daily activities now requiring the use of technology such as smartphones, for example, a
growing number of parking meters that encourage payments made by phone or via applications on
smartphones (Kelion, 2017). As well as all this, ordering things like taxis are becoming more difficult to
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hire without using smartphone applications (Kelion, 2017). Ian Fogg from the IHS Technology
consultancy explained that due to smartphones having features such as bigger screens and louder
speakers, using smartphones is appropriate for older people since they are more likely to struggle
due to their eyesight or hearing, as well as the software becoming easier to use year by year.
However, it is known that even though smartphones are increasing their popularity within the older
generation, the younger generation still use their smartphones more (Kelion, 2017).

Feasibility of Expanding business to Kingston using Pros and Cons table.

Should we expand our business to Kingston?

Pros Score/10 Cons Score/10
Reaching more customers 10 Loss of control 8
Increased sales and revenue 10 Higher costs 10
More business opportunities 8 Increased capital 8
requirements
Increase in brand awareness 9 More complex logistics 8
Economies of scale 7 Risk of losing intimate 7
relations
New employees- widening skill
6 Compromised quality 9
range
Increased market share 7 Higher staff turnover 8
Total Pros 57 Total Cons 58
Average Pros 7.1 Average Cons 7.3
Figure 3

Based only on figure 3, Eco-Fone should not expand to Kingston. This is because the average cons
are higher than the average pros, meaning that the risk of expanding is higher than the benefits.
However, the average cons are only higher by 0.2 meaning that it is not that much of a risk
compared to the benefits. If Eco-Fone does decide to expand into Kingston, it will have good benefits
such as higher revenue and economies of scale (meaning overall reduced costs as costs will be
spread out over more things) therefore resulting to higher profit levels. Also, expanding to Kingston
will allow them to widen their customer base as they can reach more customers, leading to an
increase in their brand awareness, meaning they will gain more customers and therefore make more
sales, which will help with the profit levels of the business. On the other hand, expanding to Kingston
will result to higher costs in the short-term, so if the business is short on money, the expansion will
not be very successful. As well as that, expanding the business will mean more pressure, on the
business as well as the employees, for example having more complex logistics as their customer base
will widen, which means a higher range of different demographics and consumer tastes, which may
result in a decrease of quality as well as an increase in staff turnover, since it might be harder to
keep up with demand.
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Costs of a New Building.

Figure 4.

Based on figure 4 if Eco-Fone was to take out a mortagage of £350,000 with a 15-year repayment
plan, with an interest rate of 7% per annum, Eco-Fone will have to pay £3,145.90 monthly. However,
it is best for Eco-Fone to compare its options before deciding where to take out a mortgage from.
Having done some research, here are eight different mortgage companies where Eco-Fone can take
out a mortgage of £350,000 with a 15-year repayment plan, however with different APRC’s (annual
percentage rate of charge).

1.

HSBC has an APRC of 3.6% (Money Super Market, n.d.).

2.

Royal Bank of Scotland has an APRC of 3.7% (Money Super Market, n.d.).

3.

NatWest also has an APRC of 3.7% (Money Super Market, n.d.).

4.

The Yorkshire Building Society has an APRC of 4% (Money Super Market, n.d.).
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5.

Clydesdale Bank also has an APRC of 4.4% (Money Super Market, n.d.).

6.

Yorkshire Bank has an APRC of 4.4% (Money Super Market, n.d.).

7.

The Loughborough Building Society has an APRC of 4.5% (Money Super Market, n.d.).

8.

Leeds Building Society also has an APRC of 4.5% (Money Super Market, n.d.).

Based on the above information the top three places to take out a mortgage from are: HSBC, Royal
Bank of Scotland and NatWest. This is because these three places have the lowest APRC meaning
that if Eco-Fone take out a mortgage from one of these three places they will be charged lower
rates, resulting to lower costs. This is because APRC shows you all the costs of a mortgage, allowing
you to see exactly how much you will be paying over the years of the mortgage (Wright, 2016).

Testing the Possible Difference in Net Takings in the Two Shops.

202 402
Standard error: √( )+( )= 5√2 = 7.07 (2 d.p) = 7 (1 d.p)
40 40

95% of our mean value should lie between the intervals -14 and +14.

Shop A mean: 100

Shop B mean: 90

Actual value= 100-90=10

Therefore shop A and B= 𝐻0 , this means that the mean takings for shop’s A and B are comparable,
however they are not the same. This is because based on the standard error equation (Verméz, 2017),
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the mean value of shop’s A and B should lie between the intervals -14 and +14, and when the
calculation was done the answer was 10 which lied between the two intervals meaning that they are
comparable. However, the two shops net takings are not the same since shop A has a mean of 100
and shop B has a mean of 90.

Customer Satisfaction:

Figure 5.

Based on figure 5 it is clear that Eco-Fone’s customers are the most satisfied with the sales staff of
the company, this is clear because it has the highest average of ‘3.3’ (1 d.p) compared to the other
categories. Figure 5 is also showing that Eco-Fone’s customers were the least satisfied with the
customer service/support area of the company, this is clear from the low average of ‘2.0’ (1 d.p) that
this category has. However, it is suggested that the sales staff category has a high average due to
three people giving a ‘5’ even though there are only options for ‘1-4’, which has likely impacted the
results of the averages.

Quality Procedures:

Figure 6.

0.18 (2 d.p) x 100 = 18%

Based on figure 6 it is clear that Eco-Fone has not met quality procedures, this is because quality
assurance procedures require that the probability of more than three invoices being returned in a
month to be less than 15%, however after using ‘Poisson Distribution’ to work out the probability of
more than three invoices being returned a month to Eco-Fone, the results were 18% meaning that it
was higher than what quality assurance procedures require.

Using Poisson distribution is appropriate in this case because it is most commonly used to describe
the distribution of rare events happening within a large population (Stephenson, 2016), just like we
had to find out the probability of 3 out of 10,000 invoices being returned a month.

Conclusions and Important Findings:

Overall, based on the data and findings in the report it is suggested that Eco-Fone should expand.
This is because based on task one it is clear that using smartphones are becoming more popular in
the UK, also in figure 2 it is shown through the forecast that the usage of smartphones amongst
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adults in the UK is likely to increase within the next few years. Task 3 shows reasons as to why the
usage of smartphones is likely to increase year by year; suggesting that if Eco-Fone does decide to
expand it will be good for the business as well as their revenue levels, since it is likely that
smartphone sales will continue to grow within the UK market.

On the contrary, based on figure 3 it is not a good idea for Eco-Fone to expand into Kingston, this is
due to the average cons being higher than the average pros. However, as already mentioned in this
report, the average cons are only higher by ‘0.2’, meaning that the risks are not that much more
than the benefits; suggesting that if Eco-Fone does decide to expand into Kingston there is a low
chance of it not failing.
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References.
Add Trendline to a Chart to Forecast Future Values. (2014). [video] Available at:
https://www.youtube.com/watch?v=l6a7y3k3Wtk [Accessed 9 Apr. 2019].

Casey, P. (2010). Excel PMT() Function Basics. [video] Available at:

https://www.youtube.com/watch?v=yoqXEkuPSAs [Accessed 12 Apr. 2019].

Kelion, L. (2017). Smartphone sales boom with over-55s. [online] BBC News. Available at:
https://www.bbc.co.uk/news/technology-41319684 [Accessed 12 Apr. 2019].

Money Super Market. (n.d.). Results. [online] Available at:

https://www.moneysupermarket.com/mortgages/results/#?goal=1&types=1&types=2&types=3&types=
4&types=5&from=first-time-buyer&to=results [Accessed 14 Apr. 2019].

State of the smart- Consumer and business usage patterns. (2017). [ebook] London: Deloitte LLP,
pp.13-20. Available at:
https://moodle.roehampton.ac.uk/pluginfile.php/898880/mod_resource/content/1/deloitte-global-
mobile-consumer-survey-2017_uk-cut.pdf [Accessed 9 Apr. 2019].

Stephenson, F. (2016). Calculations for Molecular Biology and Biotechnology. 3rd ed. Academic
Press.

Using a Spreadsheet to Add a Trendline. (2010). [ebook] Intel Coporation, pp.1-2. Available at:
https://www.intel.ru/content/dam/www/program/education/us/en/documents/project-
design/graphing/graphing-trendlines.pdf [Accessed 9 Apr. 2019].

Verméz, E. (2017). An Introduction To Analysing Business Data & Information: A Problem-Solving

Approach. London, England: Algana Publishing, pp.22-23.

Wright, M. (2016). Explaining APRC - Annual Percentage Rate of Charge. [online] Money Super
Market. Available at: https://www.moneysupermarket.com/mortgages/aprc-explained/ [Accessed 14
Apr. 2019].
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Appendices.
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