Nokia revolutionized the mobile phone market in the 1990s but then lost significant market share to Apple and Android manufacturers in the late 2000s/early 2010s as their Symbian OS fell behind and they failed to adopt Android. In 2011, Nokia partnered with Microsoft to use Windows Phone, but by then their market position had severely declined. The document discusses Nokia's history, mistakes like sticking with Symbian for too long, and potential strategies like focusing on innovation, selling patents/businesses, relocating, and bringing Windows Phone to more price points.
emerging nokia - should they focus on developed or emerging marketsSaurabh Arora
Should Nokia’s growth strategy be to focus on the developed markets, emerging markets or both?
Case Analysis
Handset manufacturer worldwide market share of 38% in 2009
Market leader in emerging markets like India(60%) and China(40%)
Financial performance pre-2008 was exceptional
Known for innovation
Offers products at all price points
Post-2008 started losing ground in developed markets
European market revenue declined by 15% in 2009
Exited the Japanese market after 20 years of operations
Nokia was fifth most valuable brand globally in 2000
Analysis of Emerging Market
Employed the cost leadership strategy: Purchasing power low in emerging markets hence Nokia provided cost effective products successfully.
First time purchasers: Only 20% of the emerging market were not first time purchasers
Services as the key selling point: People of emerging markets wanted value added services bundled with the phone
Analysis of Developed markets
Consumers not very price sensitive
Delivering innovative products more important
57% of the market goes for a second phone, most of the time for an upgrade
Emergence of i-phone, considered as replacement for normal handsets with users looking for upgradation
Growing competition from companies like Samsung, LG, Motorola and Sony Ericson was also making things worse for Nokia.
New Operating System – e.g. – Emergence of OSs like Google’s Android and Microsoft’s Windows mobile further bothered Nokia.
Inability to understand demand – Nokia failed to understand growing demand for touch phones
Why focus on Emerging Markets?
As Nokia has already gained the following benefits by being the first mover, it should strive hard to maintain it’s market share in developing economies. Advantages it has –
Earlier entry, early start of the learning curve. Its crucial and experience is tough to imitate.
Nokia can develop enhanced reputation by being pioneer and using its already established brand image
Absolute cost advantage can be gained by early commitments to supplies of materials and distribution channels….
Recommendations- Emerging Market
Nokia should concentrate on Improved as well as Basic phones as the market is still evolving
Tie up with Telecom players and bring dual sim phones to increase the switching cost
It should follow innovations in developed countries and adapt them to emerging markets in order to stand against competition.
One general strategy should be to outsource the services part as it is not Nokia’s competency and customers are giving more regard to services (Exhibit 6)
Instead of charging customers for Life tools, revenues should be earned from advertisers.
Reason for Success and Failure
Trade Cycle of Nokia
Comeback of Nokia
SWOT Analysis
Marketing Mix
Porter's Five Force Model
Comeback Strategies
Recommendations
emerging nokia - should they focus on developed or emerging marketsSaurabh Arora
Should Nokia’s growth strategy be to focus on the developed markets, emerging markets or both?
Case Analysis
Handset manufacturer worldwide market share of 38% in 2009
Market leader in emerging markets like India(60%) and China(40%)
Financial performance pre-2008 was exceptional
Known for innovation
Offers products at all price points
Post-2008 started losing ground in developed markets
European market revenue declined by 15% in 2009
Exited the Japanese market after 20 years of operations
Nokia was fifth most valuable brand globally in 2000
Analysis of Emerging Market
Employed the cost leadership strategy: Purchasing power low in emerging markets hence Nokia provided cost effective products successfully.
First time purchasers: Only 20% of the emerging market were not first time purchasers
Services as the key selling point: People of emerging markets wanted value added services bundled with the phone
Analysis of Developed markets
Consumers not very price sensitive
Delivering innovative products more important
57% of the market goes for a second phone, most of the time for an upgrade
Emergence of i-phone, considered as replacement for normal handsets with users looking for upgradation
Growing competition from companies like Samsung, LG, Motorola and Sony Ericson was also making things worse for Nokia.
New Operating System – e.g. – Emergence of OSs like Google’s Android and Microsoft’s Windows mobile further bothered Nokia.
Inability to understand demand – Nokia failed to understand growing demand for touch phones
Why focus on Emerging Markets?
As Nokia has already gained the following benefits by being the first mover, it should strive hard to maintain it’s market share in developing economies. Advantages it has –
Earlier entry, early start of the learning curve. Its crucial and experience is tough to imitate.
Nokia can develop enhanced reputation by being pioneer and using its already established brand image
Absolute cost advantage can be gained by early commitments to supplies of materials and distribution channels….
Recommendations- Emerging Market
Nokia should concentrate on Improved as well as Basic phones as the market is still evolving
Tie up with Telecom players and bring dual sim phones to increase the switching cost
It should follow innovations in developed countries and adapt them to emerging markets in order to stand against competition.
One general strategy should be to outsource the services part as it is not Nokia’s competency and customers are giving more regard to services (Exhibit 6)
Instead of charging customers for Life tools, revenues should be earned from advertisers.
Reason for Success and Failure
Trade Cycle of Nokia
Comeback of Nokia
SWOT Analysis
Marketing Mix
Porter's Five Force Model
Comeback Strategies
Recommendations
Nokia claims that it is profitable since June 2020, thanks to the lowest operating loss since 2018. ... However, revenue for the brand declined to EUR 1.2 billion in 2020 from EUR 1.7 billion the previous year, i.e. 2019. The brand still managed to be profitable thanks to the significant decline in the operating loss.
https://ukcustompapers.com/
2. *
* Revolutionized the market: The Nokia Mobile Phone revolutionized the mobile
phone when it began 1992 and continued its experiments for seven years. In the
Millennium Nokia introduced the 3G and multiplayer gaming for the mobile along
with strategies for MMS. 2005 Nokia sold one billion of its phones
* The Goal: Nokia's chief goal is to provide quality to the people who buy their
mobile products. Every Nokia mobile phone is etched with quality - in the
instrument, in its myriad features and in the services provided to the holders and
new buyers of the Nokia Mobile Phone.
* Collaboration and effective Distribution: Collaborating with leading networks
in various countries around the world, the Nokia Mobile Phone can provide its
customers with amazing offers and deals that carries the most attractive feature -
that of being economical. The Internet hundred of mobile dealers who can offer
some of Nokia's best deals if you so choose to purchase a mobile phone or use a
leading network that advertises free Nokia Phones. Top networks such as Vodafone,
Orange, 3G, Hutch, Airtel, and O2 among others.
* New Business Models and Customer Delight: The amazing deals also include
a one year rental of an exciting model of the Nokia Mobile Phone for free along with
a connection that is also free and it gets better when headsets and other mobile
accessories are also given - for free! All this awaits the customer who goes in for a
Nokia Mobile Phone. Another time to get the best of the bargains is during clearing
stock time when current stock needs to make way for the new. This only requires
patience and the customer wins the race - just like the tortoise! A great model at
half its original price! Gifts are also part of the mobile scheme that Nokia promises
its customers. Remember Nokia is synonymous with quality.
3. *
* Decline in Sales and Market share: Owing to tough competition from Samsung and
Apple, Nokia was not able to effectively grab the market of Smartphone generation which
has high revenue and can results in bottom line growth. From once a 70% market share
holders its total market share declines to less than 30%.
* Incapable Operating System and underestimating Apple: With apple coming up
with their IOS and better user experience and Samsung and other mobile companies on
Android Platfrom, Nokia till 2011 stuck with their Symbian’s mobile OS which felt woefully
short of the iPhone in terms of user experience which was the need of Smart phone market
* Missing Android Bandwagon: When other companies like Samsung, HTC were evolving
their operating system to Android, Nokia’s obsession for Symbian made them miss out on
the Android bandwagon that had taken on a lot of polish and evolved into an Apple beating
OS. In many ways, Android was even successful in redefining the future of Samsung and
HTC. Even Sony had joined the pack by this time
* Birth and death of Meego Harmattan, beginning of a partnership with
Microsoft: By 2010, realization dawned on Nokia than Symbian was not scalable enough to
become a modern and powerful touch screen OS. Realizing their folly, they quickly started
work on taking the Linux Meego Harmattan framework and building it into a mobile OS. But
by the time the device launched one year later, Nokia had brought in a host of leadership
changes with Stephen Elop at its helm and with the leadership came the announcement
that Nokia had struck a partnership with Microsoft. That meant that most future Nokia
phones will boast Microsoft’s Windows Phone OS as opposed to Meego.
4. *
* Plans for a broad strategic partnership with Microsoft to build a new global
mobile ecosystem: The Nokia-Microsoft ecosystem targets to deliver differentiated and
innovative products and have unrivalled scale, product breadth, geographical reach, and
brand identity. With Windows Phone as its primary smartphone platform, Nokia would help
drive the future of the platform by leveraging its expertise on hardware
optimization, software customization, language support and scale.
* Renewed approach to capture volume, value growth and to focus
investments in next-generation disruptive technologies: With Windows Phone as
its primary smartphone platform, Symbian becomes a franchise platform, leveraging
previous investments to harvest additional value. This strategy recognizes the opportunity
to retain and transition the installed base of 200 million Symbian owners. Under the new
strategy, MeeGo becomes an open-source, mobile operating system project. MeeGo will
place increased emphasis on longer-term market exploration of next-generation
devices, platforms and user experiences. In feature phones, Nokia unveiled a renewed
strategy to leverage its innovation and strength in growth markets to connect the next
billion people to their first Internet and application experience
* New leadership team and organizational structure with a clear focus on
speed, results and accountability : This new strategy is supported by significant
changes in Nokia's leadership, operational structure and approach. The renewed
governance will expedite decision-making and improve time-to-market of
products and innovations, placing a heavy focus on results, speed and
accountability. The new strategy and operational structure are expected to have
significant impact to Nokia operations and personnel.
5. *
* Market and Innovate: Really they need to build faster and show everybody that even though their
old ship is sinking, this new one is much better than everything else. They need to build something
world-changing, really… and market it extremely successfully. Nokia has some incredibly advanced
hardware technology that they’ve been working on. Their 808 Pureview camera leapfrogs everything
else on the market, including some dedicated point-and-shoot cameras, by a large margin. Lately
Microsoft has been pumping out some highly innovative software as well.
* Sell off patents: Nokia could generate significant revenue if it were willing to part with some of its
patent portfolio, and there would likely be no shortage of suitors: companies like Microsoft, Apple,
Google, Samsung, Qualcomm, and more would probably push and shove to be first through the door.
* Sell off the low-cost handset business: Although low-cost handsets sold into developing and
emerging markets currently represent the bulk of Nokia’s device sales, smartphones and smart devices
are Nokia’s future. it would also enable Nokia to jettison much of its Symbian legacy in one swift move,
reducing the company’s operating costs (and, of course, headcount) while bolstering its accounts with a
significant cash infusion.
* Relocate: Nokia has always been identified as a staunchly Finnish company, but Finland isn’t the
cheapest place in the world to operate a mobile technology company. There’s been some speculation
that maintaining its corporate headquarters in Finland has isolated Nokia to changes in the fast-moving
mobile industry.
* Get that PureView act together on Windows Phone ASAP: Brilliant technology by Nokia - its
PureView imaging technology. It’s the new standard for phone photography and if Nokia brings a
contemporary phone with a camera like the one on the 808 PureView, it’s a guaranteed success.
* Bring Cheap windows phone faster to market: Android devices are now selling for $100, and
Chinese phone makers will sell phones for $50 this or next year. That’s where Nokia should be with
Windows Phone soon. The Lumia 610 and 710 are already a huge leap forward, but still they don’t
really go to the low of the low-end where Android is still unbothered.
6. *
* Nokia Website and Annual Reports
* Phonearena.com
* Techcrunch.com