Opinion: Sadly NO phones 4U – who’s to blame?

  • 20 September, 2014
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  • News

“It is very frustrating, and indeed sad to see a large, successful, high street retailer close up shop overnight. 5,500 jobs at stake and 550 stores closed.

We hear the blame being pointed at Vodafone and EE but that is not the issue here.

Phone 4 UThe fact that O2, then Vodafone and then EE decided to pull the plug on renewing their contract with phones 4U has always been a potential risk for this business. The market has been changing and no one can tell me that Phones 4U management didn’t see this risk increasing over more recent years. They have been in this business for 15 years relying on this business model.

ALL great companies should have a clear strategy and should have a strategic process to ensure their strategy prioritises future opportunities for growth and where possible, mitigates their risks.
Great strategy should, among other things, anticipate the future and avoid such so-called surprises.

The big 3 mobile phone companies going direct to consumer, the increasing role of the internet and the recent merger of Dixons and Carphone Warehouse are at least three major signals that this market was changing. The buyer:supplier power ratio and the competitor leverage was rapidly shifting in front of their eyes.

Any business relying on a small number of third parties should beware of these risks and strategically should mitigate them through the strength of partnership (contractually and otherwise), should consider diversiification strategies to reduce their over reliance on third party suppliers and so on. There are plenty of simple business tools to help businesses to capture and structure information about their immediate market and their broader market context such that their leadership team can make informed choices around how to allocate their resources to ensure continued success as the market place evolves.

So I don’t buy the shock horror, or blame game here. I see it as the responsibility of the Phones 4U leadership to strategise and make tough choices around which opportunities for growth to pursue growth and which market risks need to be managed or mitigated. It seems that could be all too late now”

David Allmond

 

David Allmond

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