NOKIA“CONNECTING PEOPLE”Competitive Strategy Case 22/OCT/2012 By Sadat Faruque
• Nokias history started in 1865 when mining engineer Fredrik Idestam established a ground wood pulp mill on the banks of the Tammerkoski rapids in the town of Tampere, in southwestern Finland in the Russian Empire and started manufacturing paper.• In 1868, Idestam built a second mill near the town of Nokia.• In 1871, Idestam, with the help of his close friend Statesman Leo Mechelin, founded Nokia Company.• In 1902, Nokia added electricity generation to its business activities.• In 1960, First electronics department started, sowing the seeds of Nokia’s future in telecommunications.
The Move To Mobiles : (1968 – 1991)As European telecommunications markets were deregulated, Mobilenetworks became globe. Nokia led the way with someiconic products.....The Mobile era begins : 1981Nordic Mobile Telephone (NMT), the first international mobile phonenetwork is build.GSM – a new mobile standard opens up : 1991Nokia equipment is used to make the World’s first GSM call. Thus theRevolution of Mobile started …..
SWOT Analysis - Nokia :STRENGTH•Brand name Nokia•Leader in Manufacturing Mobile•Market Leader•Presence WorldwideWEAKNESS•Not good at software•Performance of Symbian OS is poor•Increasing dissatisfaction level with its higher end sets.
SWOT Analysis - Nokia :OPPORTUNITIES•Huge loyal customer base•Huge presence in developing countries•Can use its infrastructure business (Nokia Siemens network) to reduce bargaining power of mobile operatorsTHREATS•Rapidly changing industry•Threat of entry from new players•Strong Competitions
• Till 2005, Nokia enjoyed almost 60% of the handset market and became the market leader due to … 1) Innovation 2) Customization 3) Product Quality 4) Extensive Distribution• But after 2005, New competitors like Sony Ericson, Blackberry, Samsung, HTC, Spice, Micromax were forcing Nokia to head downwards. Nokia’s low end segments were facing tough competition from homegrown players like Micromax, Spice, Karbonn, etc. Whereas, high end segments were facing tough competition from Samsung, Blackberry, Sony Ericson, etc.
HANDSET MARKET IN INDIAIn Indian mobile handsets market i.e. smartphones or featured phones was expected to growall over 30% during 2012.According research of Cyber Media (CMR) 2011 itwas found that mobile phones production wasfound to be the highest i.e. 26.2%.
Nokia in India• Nokia was ranked as the ‘Most Trusted Brands’ in 2010.• Nokia established itself brand leader in the mobile devices market in India.• Nokia has a wide range of mobile phones ranging from Rs 1,499 to Rs 45,000.• In 2003, Nokia launched the Nokia 1100, a first Made for India phone.• Nokia’s ‘Made for India’ phones introduced the Nokia 3210 with a Hindi menu. Market Share of Nokia • 2008: 56.2% • 2009: 54.1% • 2010: 49.3% • 2011(January-July): 39%
Samsung emerged as the biggest competitor to Nokia in thehandset market.• It sell a large variety of mobile phone almost 50 handsets models of various price Worldwide.• Invests heavily in R&D, Marketing, portfolio and people.• Focuses on launching products matching India ‘taste and preferences’.• Has tie-up with Hungama that gives customers access to over 150,000 songs.
• BlackBerry better known as a Corporate phone.• It has increasingly targeting the young generation.• It’s introducing lower range phone like Blackberry Curve
• HTC one of the largest manufacturers of devices based on Googles Android operating system.• Its introduces innovative phones.• It has a distinctive large clock numerals.•Focuses emerging markets like India and China.• HTC instead of competing continue with its strategy of producing high quality, high-end devices.
• The company makes its presence felt in the music, imaging, and Smartphone categories.• It also focused on providing emotive series that catered to individuals who love indulgence and pampering.• Sony Ericsson’s main flagship brand phones were its Android-based Xperia smartphones.• It not only has high segment phones but also low segment phones.
• Micromax has become India’s third-largest GSM mobile phone vendor.• It brings in low-cost smart phone’s category.• Understands the changing priorities of the consumers.• Provides unique facilities like dual sim, wireless FM, QWERTY phones at a reasonable price.• Company’s ideology was reflected in its rooted belief in ‘Innovation’ and delivering ‘nothing short of the best.’• Provides wide range of phones at affordable prices.
• GFive, is a Chinese Brand.• Focuses on mid end segment to tap the Growth in replacement market.
•Chinese vendors are focusing on the replacement market by launching costlier but feature rich phones.
FUTURE OUTLOOK• Physical product with an emotional plane.• 17 million people – Life Tools (2009).• No.1 app store – Ovi store.• Music store – largest online movie seller.• Collaboration with Microsoft