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Latest posts by Mariam Peyton (see all)

    China Mobile is an investment holding company engaged in telecommunications and related businesses such as mobile businesses which offer voice, roaming and data services, wireline broadline businesses and Internet of Things. China’s telecom market is a prominent oligopoly with China Mobile accounting for over 80% of all net profit in China’s telecom market (Yoo 2017) China Mobile has over 887million customers (Statista 2018) with competitors China Unicom and China Telecom having 284.16million and 249.96million customers respectively. It accounts for 70% of China’s telecom market. Various external factors have hindered the growth of China Mobile and by using a pestle analysis, we realize how the political factors like Trump’s order to block China Mobile from operating in the US affects its profitability, the effect of unemployment on China Mobile. In addition, we look at how developments in technology and demographics like increase of consumers using smartphones can favor further growth of China Mobile. Using the swot analysis, we identify China Mobile’s major strength and weaknesses that can be improved upon.

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    China Mobile Strategy Case Study


    Key Learning Outcomes

    By the end of the case, students should be able to:
    • Understand the broad macro-environment of China Mobile and the Chinese mobile & telecommunication sector in terms of political, economic, social, technological, environmental and legal factors (PESTEL/PEST/STEEPLE).
    • Use our swot analysis example to gain an overall understanding of China Mobile's strengths and weaknesses and strategic options arising from the opportunities and threats that have been identified from the Pestle analysis example on it's business environment.
    • To apply strategy business models and frameworks such as Pestle/Pest/Steeple, Swot etc to real company cases.

     

    1.0 INTRODUCTION


    China Mobile was founded on September 3rd, 1997 in Beijing China and is the biggest telecommunications company in China accounting for over 70% of China’s telecom market ahead of major competitors China Telecom and China Unicom with 10% and 20% market shares respectively (Chepkemoi 2017). China Mobile is engaged in telecommunications and related businesses such as mobile businesses which offer voice, roaming and data services, wire line broadband and Internet of Things, China Mobile is the world’s 3rd largest telecom behind AT& T and Verizon. However, in terms of mobile subscribers, China Mobile is the biggest mobile telecom globally with over 887million customers ahead of competitors China Unicom and China Telecom with 284.16million and 249.96million customers respectively (Ponciano 2018; Statista 2018). 
    In 2017, China Mobile recorded an annual revenue of 740billion Yuan with 114.3billion Yuan in net profit, a 5.1% increase in net profits from 108.8billion yuan in 2016 due to boost from 4G subscriber growth (Si 2018).  However, China Mobile’s growth has been affected by various macro-factors such as government policy and competition from fellow telecom companies which have hindered the growth of some of its businesses. In this report, we analyze how the different macro factors from the Chinese business environment, competition, and internal weaknesses are impacting the growth prospects of China Mobile while highlighting major opportunities and threats for the company.

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