...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) In the high-end market we can see...
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...Porter’s Five Forces Analysis | Developed | Emerging | Rivalry within an industry | High- Apple, Samsung, RIM- well positioned competitors | Low in the remote areas specially India, High in urban areas in other emerging countries due to influx of Chinese and Korean manufacturers. | Bargaining Power of customers | High due to switching costs being low, existence of variety of phones. | Low in rural areas and high in urban areas due to the price sensitivity. | Bargaining power of suppliers | Low- Nokia manufactures the phones themselves and controls the distribution | Low in urban areas and medium in rural areas due to dependence on local distributers | Threat of new entrants | Low- existing brand royalty and high paced innovation required. | Low in rural areas – inaccessible due to location and low marginMedium to high in urban areas due to low barriers of entry. | Threat of substitutes | High- low switching costs and not much product differentiation. | Low in remote areas as limited options availableHigh in urban areas- low switching costs and limited product differentiation | Based on this analysis, we believe that emerging markets are more attractive than developed markets mainly because of lower threat of entrants and substitutes and lower bargaining power of suppliers and customers. Analysis of Nokia’s strategy using functional approach | Emerging | R&D | * GSM/3G expertise * Limited range (e.g. 50 new models v 120 for Samsung)...
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...niche market player in the consumer electronics has a US centered market strategy. Its current strategy on products concentrates mostly on developed markets such as US and European countries rather than emerging global markets. Being a global leader in consumer electronics, it needs to have a separate strategy for developing global markets. So as to say it can have a dual strategy, one for developed markets such as US and the other for developing markets such as India and China. Evidence The total worldwide mobile device volume is 1.2 billion [1] in 2009 out of which apple accounted for 20 million units. When comparing it to Nokia which has sold 432 million units [2], Apple still has a very great market potential with respect to volume. When compared to Nokia, Apple accounts for just 5% of its total volume; most of it comes from the domestic US market. Importance When Apple launched its iPhone in India in 2008, it was huge flop. With prices as high as $665 for 8 GB and $775 for 16GB and even Apple and Airtel had a price of $700 in India (vs. $199 with a two year AT&T contract in US). After India the iPhone flopped in china, where it had a price tag of $1000 without a contract. By the end of 2009, one million iPhones had been sold in the market place of 724 million mobile users [3]. In the long term, India and China are future markets of smartphones. Though Apple has a major market share of smart phones in US compared to Nokia which has a lesser one, the sales of Nokia globally...
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...operation? Where is the market for mobile handsets? In the developed markets? In the emerging economies? What is the nature of demand in these markets? What kinds of handsets do people want? What are the costs of manufacturing? How can these costs be reduced? Has globalisation shifted economic activity between and within regions? In what way? Look up a concept called "value chain". Is it relevant here? Nokia opened its factory in Germany in 1987, why do you think it made that decision then and what about the costs that it must have incurred till now? Is Nokia's decision to relocate its factory is legitimate? Why or why not? Could Nokia have made the Bochum plant more competitive? How? 2. Was the German backlash against Nokia justified? How can nations make themselves more competitive? What are the factors that make a country competitive? Evaluate these factors for Germany. On what factor(s) was Germany competitive or uncompetitive? How will Nokia's exit affect Germany's reputation? How will it affect other companies wanting to move to Germany? What should Germany do to make itself more competitive? 3. What, if any, were the flaws in Nokia's approach to announce and handle its plant closure? What can the company do now for damage control? What are the problems that can arise in closing a plant? What measures should a company take to manage a successful exit? What did Nokia not do well? What did it do well? Should Nokia have followed the "The...
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...| UNIVERSITY OF DAR ES SALAAMBUSINESS SCHOOLDepartment of Marketing | | | | | | | | | | | | | MASTER OF INTERNATIONAL BUSINESS (MIB) INVESTMENTS IN EMERGING MARKET Question : Critically describe corporate social responsibility in the context of emerging economies INTRODUTION Definition of the Key Terms Emerging economy: These are rapidly growing and volatile economies of certain Asian and Latin American countries. They promise huge potential for growth but also pose significant political, monetary, and social risks. There are varying ways to define an emerging economy and are fairly standard definition is a country with income per head of population of $ 9,265 or less. Countries big and small can fall within this definition. For example, China, Mexico, Egypt and India is regarded as an economic power house, yet income per head of population is still low, so as an emerging economy it sits alongside much smaller economies such as Tunisia. These are typically economies in transition, moving from a closed to an open economy, as they seek to integrate into the world economy. But this wont necessary be a one way journey, and political or economic turmoil can send them back into their shells, possibly resulting in Sbigger the risk the greater the potential. Corporate Social Responsibility: Is the continuing commitment by business to behave ethically and contribute to economic development...
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...experts Emerging Consumer Survey 2015 EMERGING CONSUMER SURVEY 2015_2 Contents 03 Editorial 04 The emerging consumer in 2015 12 A sum of different parts 20 e-Commerce and the emerging consumer 30 Focus on travel 36 Focus on autos 40 Focus on healthcare 46 Brands and the emerging consumer in 2015 62 Brazil: Steady decline continues 64 China: A life online 66 India: New government, strong consumer 68 Indonesia: An under-penetrated market 70 Mexico: Structural potential, cyclical hurdles 72 Russia: Dark clouds gather 74 Saudi Arabia: The petro-dollar 76 South Africa: Reduced optimism 81 About the survey 83 Imprint / Disclaimer For more information, please contact: Richard Kersley, Head of Global Securities Products and Themes, Credit Suisse Investment Banking, richard.kersley@credit-suisse.com Michael O’Sullivan, Chief Investment Officer UK & EMEA, Credit Suisse Private Banking & Wealth Management, michael.o’sullivan@credit-suisse.com COVERPHOTO: ISTOCKPHOTO.COM/XAVIERARNAU, PHOTO: ISTOCKPHOTO.COM/ALIJA 78 Turkey: Subdued but stable EMERGING CONSUMER SURVEY 2015_3 Editorial We are delighted to publish the fifth edition of the Credit Suisse Research Institute’s “Emerging Consumer Survey.” To undertake the project, we have again partnered with global market research firm Nielsen, which has conducted on our behalf nearly 16,000 face-to-face interviews with consumers across nine key emerging economies –...
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... EXECUTIVE SUMMARY In 2010, as the recession begins to lift in earnest, telecom operators in the Middle East will face a very different world. New business models, new strategies, new technologies, stronger competitors, more demanding customers—all will pose real challenges. The winners will be those with the vision and agility to respond quickly and flexibly to rapidly changing market conditions, developing the capabilities needed to respond to four strategic imperatives: 1. The Middle East and surrounding emerging markets are continuing to grow, and the region’s operators must reestablish the momentum they had before the recession if they are to capture their fair share of that growth. In developed markets, they must develop new value-added services that can differentiate them from competitors. In emerging markets, they must continue to gain share as quickly as possible. 2. As large sections of the telecom value chain become commoditized, operators must work to derive value through innovation. Simply copying competitors’ services and pricing plans will not work. Instead, operators must look outside their markets—and even their industries—for ideas, and create the means and the culture to promote internal innovation. 3. Demand for high-speed broadband is increasing all over the world, and the Middle East is no exception. Customers are looking both to improve their Internet experience and to make effective use of a wide...
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...July-December, 2013 Business Perspectives and Research Reverse Innovation: A Gift from Developing Economy to Developed Economy Ritu Sinha 1 Abstract In the era of globalization, emerging market economies are surfacing into centers of innovation. These innovations associate with low-cost products like healthcare devices, wind power, micro finance, electric cars and many more. The success of these frugal innovated products enable developed countries to adopt well. Hence, reverse innovation refers to those innovations which are adopted by developing countries first and then by developed countries. These innovative products are a result of cutting edge technology, common sense and ingenious use of local commodities with the price range that is affordable to a huge mass of consumers like Tata's one lakh ($ 1677) car Nano, Nokia's sturdy mobile phones, the Chottu Cool' refrigerator and many more. These products might be conceptualized for the customers at the bottom of the pyramid still not limited by scaled down versions meant for the lower end. This paper is an attempt to evaluate how reverse innovations are possible in emerging markets and how it can unlock business opportunities at a global scale. Keywords Emerging market, frugal, innovation, product reverse, technology 1. Introduction In today's changing and competitive environment, innovation is must for the survival of any kind of business in the marketplace. The primary objective of any business firm is to understand...
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...Emerging Markets Perspectives - CEO Insights Emerging Markets Perspectives - CEO Insights 1 Convergence & Differentiation What is success in a connected world?* Methodology This report was developed to provide a unique perspective from which to view the successes of companies based in emerging markets. While there are many reports providing valuable insights on how multinationals can expand into emerging markets, very few take a systematic approach towards looking at how emerging-market companies have not only fended off developed-world multinationals, but also found their own ways to expand into foreign markets. In addition to drawing on the insights of PricewaterhouseCoopers partners and associates from every market, we relied on two additional sources: 1. The 11th Annual PwC Global CEO Survey: The authoritative analysis of CEO views on business opportunities and risks of operating in an increasingly connected world. PricewaterhouseCoopers has published the survey for more than a decade, reaching out to more than 1,100 chief executive officers worldwide. The 11th Annual Global CEO Survey was launched in January 2008 at the World Economic Forum’s annual meeting in Davos. The survey data were re-analysed for this report at the country level as well as by contrasting insights from developed versus emerging markets. For the purposes of this report, we define “developed nations” to include 19 economies, including the United States and Canada, 15 in Western Europe, Japan...
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...University with support from the National Science Foundation Table of Contents Executive Summary: Globalizing Indian Manufacturing .......... 1 Competing in Global Manufacturing and Service Networks ..... 5 The path to becoming competitive ............................................... 5 Cracking the code for success in emerging markets...................... 5 Overcoming the size barrier.......................................................... 6 Growth strategies for Indian manufacturing ................................ 7 Indian Manufacturing and Global Competitiveness .................. 8 Scale and innovation ................................................................... 8 Reverse currents: Going overseas for growth ............................... 9 Going global with pharmaceuticals .............................................. 9 The opportunity in the food chain ............................................. 10 Becoming suppliers of choice ..................................................... 10 Simplifying India for global retailers ........................................... 11 Multinational Companies Entering Indian Markets ................. 12 From India to the world.............................................................. 12 Beyond borders .......................................................................... 12 Operational Excellence in Indian Manufacturing ..................... 14 The importance of going lean ........................
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...U N I T E D N AT I O N S C O N F E R E N C E O N T R A D E A N D D E V E L O P M E N T WORLD INVESTMENT REPORT 2011 NON-EQUITY MODES OF INTERNATIONAL PRODUCTION AND DEVELOPMENT U N I T E D N AT I O N S C O N F E R E N C E O N T R A D E A N D D E V E L O P M E N T WORLD INVESTMENT REPORT 2011 NON-EQUITY MODES OF INTERNATIONAL PRODUCTION AND DEVELOPMENT New York and Geneva, 2011 ii World Investment Report 2011: Non-Equity Modes of International Production and Development NOTE The Division on Investment and Enterprise of UNCTAD is a global centre of excellence, dealing with issues related to investment and enterprise development in the United Nations System. It builds on three and a half decades of experience and international expertise in research and policy analysis, intergovernmental consensus-building, and provides technical assistance to developing countries. The terms country/economy as used in this Report also refer, as appropriate, to territories or areas; the designations employed and the presentation of the material do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. In addition, the designations of country groups are intended solely for statistical or analytical convenience and do not necessarily express a judgment about the stage...
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...1.0 History of international trade International trade has been and is today an economic force that has spurred commerce, promoted technology and growth, spread cultural patterns, stimulate exploration and colonization, and frequent fanned the flames of war. The history of international trade has gone hand in hand with the development of civilizations. From very ancient times, international trade brought about the exchange of products and raw materials between one land or nation and another. Although such trade was often conducted in barter form and was of small volume by today’s standard, this interchange of products was important in economic and historic development. International trade in its early beginnings was necessary, not just because it provided one society with products such as cowries from west Africa to other areas, international trade also formed the as is for cultural interchange, thus trading not only on product, but also on lifestyles, customs and technology. 1.1 International trade – Defined In the simplest form, international trade means exchange of goods and services across international boarders. In other to know what is happening in the course of international trade, governments keep track of the transactions among nations. The records of such transactions are made in the balance of payment accounts. International trade and balance of payment are therefore two important aspects in the relationship between nations. 2.0 Importance...
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...The BRICs markets are both the fastest growing and largest emerging market economies. The countries of Brazil, Russia, India and China are becoming ever larger forces in the world economy. They account for almost three billion people, or just under half of the total population of the world. In recent times, they have also contributed to the majority of the world GDP growth. For some time their growth rates have been faster than those experienced in the western economies, and they have been able to withstand the recent economic crisis with greater resilience (Geoff, 2010). According to various economists’ projections, it is only a matter of time before China becomes the biggest economy in the world. China is expanding its reach all over the world. For instance, they are making in-road into most African countries which use to be a reserve place for the west, thereby stopping the monopoly that the western economies had in this part of the world. Most African nations with their leaders prefer to do business with China because of their poor ethical standard and the wiliness to do anything just to win the hearts of these leaders who are less concerned about the well-being of their people. In fact, Goldman Sachs believes that by 2050 these BRICs countries will be the most important economies in the world thereby relegating the US to fifth place (EconomyWatch, 2010). By 2020, economists’ project that all of the BRIC countries should be in the top 10 largest economies of the world. Manufacturers...
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...It’s quite an interesting phenomenon that the shape of global income distribution is that of a champagne glass. The richest fifth of the world’s population, owns 82.7% of the world wealth. I don’t feel that the major international institutions are actively trying to keep the rich countries rich and the poor countries poor. There are many factors involved in holding poor countries back from economic success. These factors include lack of proper trade arrangements (China WTO example), level of education, control of resources and instability. One of the largest barriers developing nations need to overcome is increasing trade with other nation. For example, in Africa, transport and communications infrastructure and product variety are severely lacking. Without proper infrastructure, the transportation of goods becomes expensive and impractical. To put this in perspective, freight transportation in Africa amount to 13% of import costs, compared to 5% in industrialized nations. A common characteristic among developed nations is an emphasis on education. According to the German Federal Ministry for Economic Cooperation and Development, “Ninety-eight per cent of those who cannot read or write live in developing countries”. There are many reasons for the lack of education. In many 3rd world nations, women aren’t given the opportunity to attend school. Also, during times of civil war or turmoil, schools may be closed or destroyed. According to UNESCO, developing countries do not...
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...international markets – products are sold across borders; the resources used in production can come from anywhere in the world; communication is instantaneous; and financial markets are inextricably linked, as the events of 2008 demonstrate. Individual businesses operate across borders in a variety of ways – they can do this directly, through the formation of strategic alliances or through merger and takeover. It is clear then that businesses need to be aware of the global context of their markets. Having read this chapter you should be able to: G G G G Learning outcomes understand the difference between globalisation and internationalisation outline the main elements of globalisation illustrate the role of the multinational enterprise introduce the implications of globalisation for business Key terms Capital market flows Consortium Cross-subsidisation Customs union Emerging economies Foreign direct investment (FDI) Franchising Free trade area Globalisation Hyperglobalisation Internationalisation International trade Joint venture Licensing Multinational enterprise (MNE) Regionalism Regional trade agreements (RTAs) Strategic alliance Transfer pricing Transformationalism Globalisation versus internationalisation 39 Introduction Businesses operate in a global context: even if they do not trade directly with other countries, they might be affected by a domestic shortage of skilled labour or may be subject to developments on the global financial markets. There...
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