Complete the following written assignment of “Shanzhai (“Bandit”) Mobile Phone Companies”
1. What are the environmental factors that help drive the Shanzhai phenomenon?
There were indeed many environmental factors that made the Shanzhai phenomenon; for instance, political, technological, social, economic, environmental, and last but not least legal factors.
The primary effects of the government intervention in an effort to create a barrier of entry to foreign companies while encouraging local brands completely collapsed on itself. By the government creating so much bureaucracy behind the development and production of “legitimate” phones, they inflated costs that were then carried over to consumers while also increasing the time of development for legal companies. The companies competing in the Shanzhai space received additional help in Shenzhen where a number of legitimate companies were operating. By leveraging this situation while establishing relationships with wholesalers and independent manufactures the Shanzhai companies were able to create a highly profitable business model. The network of qualified suppliers and manufactures that assisted the Shanzhai …show more content…
The first step that companies should take is to highlight the differences between the two products highlighting the dangerous nature of the cheap Shanzhai phones vs. the sophisticated and high quality products of the mainstream brands. Although the mainstream companies have had quality issues in the past, the sublicensing fiasco is behind them and the advertisements produced to shape consumer opinion should highlight this fact. Additional ads could focus on the dangerous aspects of not having IMEI codes and how terrorist groups are using these phones. Such actions will create a value added consensus among consumers that spending the extra money for a “safe” mainstream phone is worth the
1. What are the environmental factors that help drive the Shanzhai phenomenon?
There were indeed many environmental factors that made the Shanzhai phenomenon; for instance, political, technological, social, economic, environmental, and last but not least legal factors.
The primary effects of the government intervention in an effort to create a barrier of entry to foreign companies while encouraging local brands completely collapsed on itself. By the government creating so much bureaucracy behind the development and production of “legitimate” phones, they inflated costs that were then carried over to consumers while also increasing the time of development for legal companies. The companies competing in the Shanzhai space received additional help in Shenzhen where a number of legitimate companies were operating. By leveraging this situation while establishing relationships with wholesalers and independent manufactures the Shanzhai companies were able to create a highly profitable business model. The network of qualified suppliers and manufactures that assisted the Shanzhai …show more content…
The first step that companies should take is to highlight the differences between the two products highlighting the dangerous nature of the cheap Shanzhai phones vs. the sophisticated and high quality products of the mainstream brands. Although the mainstream companies have had quality issues in the past, the sublicensing fiasco is behind them and the advertisements produced to shape consumer opinion should highlight this fact. Additional ads could focus on the dangerous aspects of not having IMEI codes and how terrorist groups are using these phones. Such actions will create a value added consensus among consumers that spending the extra money for a “safe” mainstream phone is worth the