emerging nokia

Topics: Developed country, Mobile phone, Nokia Pages: 5 (1419 words) Published: August 10, 2014


1. What strategy would you recommend for Nokia going forward? Please develop a complete strategy that addresses the following issues: Choice of scope: does it make sense for Nokia to be in both emerging and developed markets, or should they choose not to play in certain markets? How integrated should it be into manufacturing, services (apps), software development, sales, etc? Answer1: Choice of scope: With dwindling sales in developed countries like USA, UK, Germany, Russia and Italy and even in emerging markets like India, Indonesia and Brazil (as per Exhibit 1) despite previously having a stronghold, Nokia now had to decide if it should continue its focus on emerging markets or attempt to salvage the sales even in the developed markets. Status in developed markets:

1. The operators usually have more power but this was changing since the emergence of iPhone. It is a replacement market with users looking for up gradation 2. Competition- Growing competition from companies like Motorola, Samsung, LG and Sony Ericsson. The RIM‘s launch of Blackberry(2002) and Apple’s iPhone (2007) was a further set back 3. New Operating System- Emergence of new user friendly operating systems such as Google‘s Android and Microsoft’s Windows mobile further put Nokia on the back foot 4. Inability to understand demand- Nokia failed to identify the growing consumer need for touch screen phones 5. Target - Nokia operated at all price points where as competitors like Apple (high-end segment) and Samsung( mid and high end segment) had a clearly drawn up strategy Slowdown in some emerging markets:

1. Reverse bundling allows the manufacturer to wield more power than the operator 2. There is lower cost of production which helps produce inspirational products at low rates 3. The growing competition from companies like Samsung that were offering the latest technology at competitive prices 4. Therefore, Nokia lost out on the middle and high segment but continued to grow in the low-end mobile segment as it had identified the gaps in emerging markets and customized services to suit the local consumers Nokia must recognize the difference in the different market segments and take the challenges head on to be able to operate in both markets. It must clearly identify the segments it wants to operate in and also change its positioning based on the data below. Data from Exhibit 11:

Percentage of phone sales by segment
Emerging Markets
Developed Countries

Mid East
AP w/o Japan
Latin America
E. Europe
Japan
W. Europe
North America
Basic
41%
43%
20%
34%
0%
4%
8%
Enhanced
40%
44%
58%
45%
32%
29%
43%
Smart Phones- E. level
10%
7%
12%
10%
6%
34%
8%
Smart phone- Feature
10%
6%
9%
11%
62%
33%
41%
Penetration
58%
45.50%
80.30%
127.50%
86.60%
122.90%
84.90%
Nokia Market Share
61.40%
42.30%
32.80%
48%
0.30%
39.40%
7.20%

In emerging markets, Nokia must focus on Basic and Enhanced phones, as that is the largest segment as the market is still evolving and low cost handsets coupled with customized services will help further grow its footprint. In developed countries, Nokia should look at development of high end- high technology driven models in the Smart Phones Entry Level and Feature segment. At the same time when it comes to Japan, Nokia should look to divest as it is largely smartphone driven market and Nokia has very little market share and does not have the requisite technology to successfully compete in that segment yet. It is essential for Nokia to follow the innovations in developed countries especially USA and adapt them to developing markets if it wants to stand up against competition in both the markets. Mobile phone industry has followed the International Product Life Cycle but now they have reached a stage where different approach is required for innovation to take place in developed and developing markets to meet their specific needs. Another key thing that Nokia must do is...
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