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The only deficiency with his model lies that the same analysis often applies equally well to more than one company (hence, the notion of “strategic groups”). And Porter’s emphasis on the importance of external context is balanced by Barney’s insistence that sustainable advantage depends as much or more on the internal resources of the firm. As Jay Barney argued that sustainable competitive advantage is not the product of correct position in the external environment but is derived from the firm’s internal resources. More specifically, resources must meet four criteria to confer sustainable competitive advantage. They must be valuable, inimitable, rare and nonsubstitutable.30

2. Brief on Mobile Handset Industry in China

According to the statistics from the reports of Ministry of Information Industry of the People’s Republic China (Abbr. MIIC hereinafter), the mobile user in China has experienced a continuous rising up from year 2001 to 2005: the units number of mobile user every year is 144.8m、207m、268.69m、334.82m、 and 393.43m, with an annual increasing rate of 69.85 %、42.96%、29.80%、24.61% and 17.50 % respectively.

Up to Mar. 2006, the mobile handset output arrived at 103.39m units, with an annual increase of 106.66% compared with 24.11m at Feb.2003.

Moreover, it was optimistic that the Chinese mobile market will further boom up based on the current number of 30.3 units per hundred people (MIIC 2005 communique), which is about 29% converted by penetration rate, less than 80% in western developed countries. Reportedly, Merrill Lynch's recent Global Handset Industry Update reports that the analysts expect China's penetration rate should reach just over 50% in 2010, up from 29% in 2005. This results in approximately 682 million Chinese mobile subscribers by 2010, up from 374 million in 2005, a 30 Henry Mintzberg, Joseph Lampel, James Brian Quinn, Sumantra Ghoshal, (2002) THE STRATEGY PROCESS Concepts, Contexts, Cases FOURTH EDITH Prentice Hall, Upper Saddle River, New Jersey 07458, pp102-105. growth CAGR (abbr. of compound annual growth rate) of 13%.31

However, under the tremendous attraction of developing space on Chinese mobile handset market in the near future, more and more manufacturers join the industry and competition among contenders becomes much fiercer. The licensed handset manufacturers have increased to 65 units in Nov.2005 from 37 units in the end of 2004.32 Apparently, it’s impossible for a company to win without taking exact competitive strategy.

Section 1. The threat of entry

New entrants to an industry bring new capacity, the desire to gain market share, and often substantial resources. The seriousness of the threat of entry depends on the barriers present and on the reaction from existing competitors that the entrant can expect. If barriers to entry are high and a new comer can expect sharp retaliation from the entrenched competitors, obviously he will not pose a serious threat of entering. There are six major sources of barriers 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。