...1. Problem Even though Nokia’s strategy in emerging markets has been successful –making the company the market leader in India and China with market shares of 60% and 40% respectively– the company’s position in the developed markets has been deteriorating. Nokia used to lead the mobile phone market in North America and Europe in the 90s and early 2000’s and now the company is losing share mainly to Apple, Samsung and RIM. At the end of 2009 market share in the US dropped from 33% in 2002 to 10%; in Europe revenue declined by 15% in 4Q2009 and it was pulled out of Japan. The question that rises is if Nokia should continue to operate in both developing and developed markets or select one over the other and what strategies the company should pursue for those alternatives. This report will analyze Nokia’s environment and its current internal situation and will provide an actionable recommendation plan to address this problem. 2. The External Environment Industry Analysis-Porter’s Model of Five Competitive Forces The mobile phone industry is a fast changing industry due to technological advancements and fierce competition. The first generation of mobile phones appeared in the 80’s, the second generation in the 90’s with the introduction of digital technologies and cheaper phones and lastly the third generation emerged in 2000’s with the introduction of 3G networks. a) Intensity of Rivalry Among Competitors This competitive force is high. There is an intense competition: 1)...
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...Nokia was once the pioneer in the development of mobile phones and became in 1998 the leader in the manufacturing and sales of mobile phones (McCray et al, 2010). Nokia kept its leading position for several years and at the turn of the century Nokia’s products were revolutionary and transformed the entire industry until Nokia was overtaken by Apple with the introduction of its iPhone in 2007. The introduction of the iPhone made Apple the market leader in smart phones and Nokia’s market share started to dwindle. Nokia fell far behind in the smart phone market. What are the main causes of Nokia’s decline, a company that had once been the pioneer in the market? Nokia has been very successful and enjoyed the leading position in the mobile phone market for many years. The huge success was the pride of Finland. This leading position in the market led Nokia to develop a culture of complacency. Complacency in a market leader can lead the organisation into a position which is known as the Icarus Paradox. Overconfidence, complacency and carelessness are key symptoms of this paradox. Nokia’s culture of complacency, arrogance and close mindedness coupled with its market dominance led directly to its failure in the smart phone market. An example of this complacency and closed mindedness was given by a former manager of Nokia, Dave Grannan, who explained the reaction at Nokia when Apple released the iPhone: ‘We have tried touch screens before and people did not like them’ (Burrows, 2011)...
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...Born of Finnish ingenuity, The Nokia Corporation is a multinational communications and information technology corporation. From this corporate giant’s headquarters, which are located in Espoo, Finland, they press tirelessly toward a 4 point strategy: build a new winning mobile ecosystem in partnership with Microsoft, bring the next billion online in developing growth markets, invest in next-generation disruptive technologies and increase focus on speed, results and accountability. Primarily Nokia is known for mobile telephones and portable IT devices. However, it has branched into Internet services realizing that on trend phenomenon such as games, applications, media and messaging and music are now a part of global cultural permanently. By utilizing subsidiaries such as Navteq, Nokia is able to offer free digital global mapping information. Siemens Networks is also a Nokia ally in services and telecommunications network equipment. All this being said, the brainchild founded in 1865 has expanded to a telecommunications icon and connected to important links to ensure forward thinking, thus remaining in the top ten of the world producers in this area. In this case study we will review the process necessary to save one of the most precious commodities that a technologies company has: time. Time is the enemy to a technology corporation as the first to debut a new concept or improve upon an existing one is the company to receive the bulk of the market’s trust and repeat patronage...
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...1. Trends within the handset industry with companies such as Nokia, produce low-cost cellphones which reduce the average selling price of these handsets. The case states, “ international mobile phone prices fell 35% in recent years. In the price conscious emerging markets, the basic phones were sold below $50 and there was a growing market for $25, and even $10.” Nokia captured this trend of low cost mobile phones that are cheap and disposable for consumers. The demand for low cost manufacturing has become a necessity for Nokia to survey in this thriving market. They had tremendous pressure from costs that lead to weak profitability and other companies consolidating. This introduces the second trend within the mobile handset industry to move production to Central and Eastern Europe because their labor cost were lower. This allows Nokia to sell the mobile handsets for a lower price. Nokia’s strategy is to shift production to low cost locations because their high productivity and simple taxes. They wanted to set new standards for wages, training, workplace safety, and technology transfer that was valued within society. 2. Dependent upon Nokia's image and cultural beliefs, the backlash in Germany was justifiable. Nokia was praised for keeping their company within their own country whereas other companies had offshore production. Bochum was profitable, and it was only beneficial for Nokia to close the plant to reduce the employee expense. They did not go public before their...
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...inconveniences, that is connected with the internal atmosphere. The bright example of such organization is Nokia Company. Nokia was formed as a result of the merger of 3 companies that face people from different cultural and national backgrounds. The management policy of the company had an aim to introduce business procedures that will overcome certain difficulties. Implementation of HR practices reflected in amazing financial results and expanded their market share worldwide. The perfect balance of unique ideas along with information technology development were extremely beneficial for the all members of corporative hierarchy. However, a number of obstacles arose and led to the damaged corporate image. How do reorganizations and massive layoffs, for example in the spring of 2003, affect Nokia’s employees in terms of their attitude and behaviour? Layoffs and reorganizations itself are the actions directed to terminate or replace a unit of workforce, in order to reach the highest possible effectiveness or stay efficient in hard conditions. Declining of the entire technological industry and bankruptcies among high-tech start-ups caused mistrust from investors’ perspective that resulted in one-year stagnation of the whole sector in 2001. When Nokia, one of the major growing company, declared that it still has overestimated its revenues, financial specialists had had enough. Nokia has begun aggressive layoff policy that regarded as a visible way of pleasing shareholders and...
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...Executive Summary Nokia initially had major focus on rubber and in 1967 they shifted to electronics industry.Nokia organization was divided in three groups:Devices & Services, Mobile Phones andMarkets.Nokia Denmark has the question of defining the future strategic directions for product development activities which is there main concern. It use to develop about 10 mobile phones a year. Nokia Denmark had three strategic operations: Nokia could scale up JRD with Foxconn to suspend in-house development. Second, Nokia phase out with Foxconn and pursue fully in-house product development.Third would to continue parallel organization structure. The primary function of the Danish site was the development of mobile phones, including every aspect from R&D to sourcing and logistics to marketing and market segmentation.For them challenge was to ensure that interfaces between hardware and software are flawless.In Danish unit the product development had three phases:concept mapping,product development and product maintenance. In 2007, Nokia had joint R&D(JRD) setup with Foxconn for developing and testing mobile phones.It was bottom-up approach to ease capacity burden.The reasons to chose Foxconn were it was cost saving, they had relevant knowledge and expertise in this field.Even after handing over complete Nokia Denmark was still involved in the process and they needed frequent meeting so distance was becoming concern.Foxconn was really fast and had good decision making.Secondly...
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...Nokia Case Study Introduction: The fundamental question in the field of strategic management is how organisations achieve and sustain competitive advantage (Teece, et al, 1997) and therefore attain above industry-average profit. However, since both the business environment and individual firms are dynamic systems, continuously in flux, it is a big challenge to achieve a fit between these two systems (de Wit B and Meyer R., 2004) and therefore get the competitive advantage. This essay will firstly assess and consider the balance of marketled and resource-based approaches from the academic point of view. These two approaches should be viewed as complementary (Prahalad and Hamel, 1990; Mintzberg et al, 1995; Greenley and Oktemgil, 1996). Following the discussion, the essay just analyzes Nokia’s strategies and empirically justified the reciprocal and complementary relationship between these two approaches. On the process of Nokia’s development, the company achieved success because it could balance these two approaches well. Once it failed to do so, the company immediately suffered the fall in 2004, lost market share and decreased the revenue. However, the company quickly recovered because it followed the market trends, and simultaneously its strong internal strengths neutralised the external threats. In addition, I will argue that Nokia can maintain its market share and its market leader position in the following years based on the good market opportunities in mobile phone industry...
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...forward for Nokia Denmark Harvard Case Solution & Analysis The case describes and discusses the organizational and strategic challenges of outsourcing research and development (R & D) activities from Denmark to China. Nokia Denmark was founded in 1996 as a subsidiary of Nokia and contained the largest Nokia R & D division, focusing on the development of mobile phones outside of Finland. In 2007, Nokia Denmark received instructions from corporate headquarters to dramatically increase the number of mobile phone. Guided by the need to release the pressure on its internal capacity, Nokia Denmark decided to outsource certain projects of product development Taiwanese company Foxconn in joint R & D (USC) plant. Foxconn, one of the world’s largest electronics manufacturers, who are also developing products for many of the competitors Nokia, was responsible for the development and testing of selected standardized and less sophisticated mobile phones, while the more complex and sophisticated technological projects were kept in the house . However, by 2010, Foxconn has become a central figure in Denmark Nokia product development with responsibility for more complex projects. Given the growing importance of Foxconn for Nokia Denmark, growing pressure from corporate headquarters and the competitive environment of the market for the products and costs, Nokia Demark way to the central question of how to proceed with the USC. Three alternatives have been identified for the future JRD Nokia Denmark...
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...Grow the number of people using nokia devices.•Transform the devices people use.• Build new businesses• Our business and people’s expectations for mobile devices and services arechanging. Nokia’s promise is to help people feel close to what matters tothem. About the Company Nokia- Connecting People ! Nokia Corporation (NYSE: NOK) is one of the world's largesttelecommunications equipment manufacturers. With headquarters inKeilaniemi of Espoo, Finland, this Finnish telecommunications company is best known today for its leading range of mobile phones. Nokia also produces mobile phone infrastructure and other telecommunicationsequipment for applications such as traditional voice telephony, ISDN, broadband access, professional mobile radio, voice over IP, wireless LANand a line of satellite receivers. Nokia provides mobile communication equipment for every major marketand protocol, including GSM, CDMA, and WCDMA. Nokia was established in 1865 as a wood-pulp mill by Fredrik Idestam onthe banks of Nokia rapids. Finnish Rubber Works established its factories inthe beginning of 20th century nearby and began using Nokia as its brand.Shortly after World War I Finnish Rubber Works acquired Nokia wood millsas well as Finnish Cable Works, a producer of telephone and telegraphcables. All three companies were merged as Nokia Corporation in 1967. Thename Nokia originated from the river which flowed through the town of thesame name (Nokia).In the 1970s Nokia became more involved in the telecommunicationsindustry...
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...Nokia Warns Consumers of Fare Handsets Sold Locally 1. How will the proliferation of fake Nokia handsets affect the operations of Nokia Philippines? * I think the proliferation of fake Nokia handsets have a huge effect on the operation of Nokia Philippines. The emerged of fake Nokia handsets may destroy the Nokia’s top position in the market. Nokia may lost the overall mobile phone market share in the Philippines and may suffer from declining profit margins due to fake Nokia handsets. 2. What do you think is the main cause of such proliferation? * I think the main cause of such proliferation is that there’s an existing demand on fake Nokia product which consumers can buy in a cheaper price. Since the original Nokia handsets are expensive, buyers are drawn by the opportunity to own and display what it looks like the genuine Nokia phone at a fraction of the price of the original product. The important thing is to the consumers is to get what they believe to be the same product at a bargain price. In a country like the Philippines where greater part of the population are consider poor and low income, they are not capable of buying an original Nokia which is expensive. It is rational choice for them buying a fake Nokia which is less expensive but with inferior quality over the more expensive original. 3. What measures would you recommend to Nokia Philippines in order to alleviate, if not totally eliminate, the marketing of fake Nokia handsets? * Some measures that...
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...Unit 2 Vertu Case Study Analysis Kaplan University School of Business MT460 Management Policy and Strategy Author: Professor: Dr. Dennis Strouble Date: September 30, 2014 Vertu: Nokia’s Luxury Mobile Phone for the Urban Rich Case Study Introduction Finland-headquartered Nokia was a global telecommunications equipment manufacturer that also operated a luxury mobile phone brand called Vertu. Vertu was founded by Frank Nuovo by using precious materials, fine jewels and exotic leathers (Kwong & Wong, 2011). Vertu was unique, luxurious and one of a kind, for a moment in time. Synopsis of the Situation Nokia has been one of if not the leader in the telecommunication equipment industry for a long time. Under the new management of Stephen Elop, he allowed Nokia’s chief designer, Frank Nuovo design and run at arm’s length in England the creation of the never-seen before luxury phone called Vertu. With the birth of the Vertu phone, it showed growth in 70 countries selling mobile phones (Kwong & Wong, 2011). Things would not stay golden forever though. Key Issues After years of being that one-of-a-kind luxury mobile phone competitors began wanting in on the niche but profitable market. Technology was also growing faster than Vertu phone were keeping up with. With this revenues began to fall. Elop made the executive decision to partner with Microsoft windows to adopt their operating system since Nokia’s was OP becoming obsolete. Define the Problem ...
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...A CASE ON RISE & FALL OF NOKIA (INSIGHT TO THEIR STRETEGIES) Submitted by: RAJIV KUMR ROHILA – S065 JAGDEEP SINGH - S029 TOSHIT KUMAR - N065 Case Overview NOKIA was the most successful European company of the 1990s. The Finnish mobile-phone manufacturer captured the emerging market for mobile phones and built the industry's most powerful brand. Its handsets virtually defined the industry from the time it launched its first GSM phone, the 1011, in 1992. From 1996 to 2001 its revenues increased almost fivefold, and by 1998 it was the world's biggest mobile manufacturer. In 2005, it sold its billionth handset, an 1100 to a customer in Nigeria. Despite being the market leader in the mobile phone market since 1998, the company saw a decline in its brand value since the early 2000. It was once a firm with turnover exceeding the tax revenue of the country it was based in. However, the company not only first lost its number one ranking, a position it had held for 14 years but reach to sell-off in less than 10 years. So the most valid question from all is what happened to Finland's most beloved company? This case is all about analysis of NOKIA’s strategies responsible for its market domination to sell-off . Snapshot of NOKIA’s History To understand the Rise and Fall of NOKIA, it is important to track the history of NOKIA on a single canvas. The same is attempted through following...
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...University Business School, for all their assistance. I would like to thank my parents for love and support bestowed on me. Thank you for your blessings. Also I would like to thank my friends for staying by me during the difficult parts of life. Thanks for help and love irrespective of the situations. I would also like to thank all my respondents for taking out time from their busy lives to help me with my research. Last but not the least, I would like to thank God for all. Thank You!! Nikunj Daga 3 ABSTRACT _________________________________________________________________________________________________ This research studies the marketing strategies of Nokia, a high technology company in a developing country India. The study attempts to check the role of marketing activities in success of Nokia...
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...Abstract: The roots of Nokia go back to the year 1865 with the establishment of a forestry industry enterprise in South-Western Finland by mining engineer Fredrick Idestam. While in the year 1898, witnessed the foundation of Finnish Rubber Works Ltd, and in 1912, Finnish Cable Works began operations. Gradually, the ownership of this two companies and Nokia began to shift into hands of just a few owners. Finally, these three companies were merged to form Nokia Corporation in 1967. [1] Nokia Corporation engages in the manufacture of mobile devices and mobile network equipment, as well as in the provision of related solutions and services worldwide. The company has four main business functions or segments: Mobile Phones, Multimedia, Enterprise Solutions, and Networks. The Mobile Phones segment provides various mobile voice and data devices. This segment offers mobile phones and devices based on GSM/EDGE, 3G/WCDMA, and CDMA cellular technologies. The Multimedia segment offers mobile devices and applications with multimedia connectivity over GSM, 3G/WCDMA, WLAM etc. Role of Strategy: Every company on a small level with very low risk or a multinational company with much more to lose than just money on the line have to have a strategy to make its name in the world with other companies in mind. Strategy is as important in an organisation like walking for a human. Behind every successful organisation there is a strategy. “It may be hard for an egg to turn into a bird: it would...
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...Unit 2 Vertu: Nokia’s Luxury Mobile Phone Case Study Analysis Kaplan University School of Business MT460 Management Policy and Strategy Author: Melissa Shumate Professor Dennis Strouble Date: 5/29/2015 Name of Case Study Company Name: Vertu Luxury Phone Company Topic of the Week: The Mission Statement Synopsis of the Situation: Vertu is luxury phone company that is owned by Nokia. There was a shift in operating systems for the cellphones created by Nokia by the new CEO Stephen Elop. Elop decided to create a partnership using Microsoft’s “new but unproven Windows phone as its primary smartphone operating system” (Wong, 2011). This did not go over very well as the companies share dropped by $0.14 the day that it was announced. This was just Nokia though as Vertu continued to provide the Vertu experience by not following suite with Nokia in changing operating systems. Vertu was able to stay at arm’s length from Nokia’s decisions and that is what kept them alive as a company. In all honesty, Vertu is one of the reasons that Nokia has funding. Vertu’s sales helped to support this adventure that Nokia was undertaking. Here is where the choices come into play. Vertu has markets across the world in places such as Asia and Russia which could support the much needed over haul of Nokia. This could also be the starting of letting go of Nokia as a business and focusing on Vertu. Alternative Solutions 1. Vertu has a solid market where the profits...
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