We have chosen to adjust Porter’s Five Forces model to fit our specific need for this case. That means that we are not using it as a model to determine industry attractiveness, but as a model to determine the forces Nokia is up against. Not all of these forces have a negative character as we will explain in the following segment. The threat of new entrants:
The one major threat in this category comes from the company Amazon. They have recently released a tablet with a forked version of Android’s platform, and many believe that a Smartphone is the next step. Amazon has a huge costumer base with credit card information on file and they have a large amount of free capital to invest. Bargaining power of suppliers:
Only one supplier is big enough to be a threat for Nokia, and that’s Microsoft. Microsoft has allegedly said that if the goals are not reached, with this new batch of Windows Phones, (Nokia, HTC & Samsung) they will end the partnerships and produce the hardware themselves. Bargaining power of buyers:
Because there are only four major carriers, they have a huge amount of power when it comes to doing business with Nokia. But they are not exercising that power as much as could. This is because of the threats the carriers themselves are facing: The threat of suppliers. There is three major manufacturers with only two different operating systems, that means that they need another supplier to distribute the power more evenly and get better deals when dealing with them individually, right now the most likely candidate is Nokia. The threat of substitute products:
One threat in this category is the tablets, a hybrid between a laptop and a Smartphone. Some believe that the tablet will outsell the regular PC as soon as 2013, which is a very plausible assumption when we look at the growth rates in the industry. Tablets provide a lot of the same features as Smartphones, but the tablets size and inability to make phone calls minimizes the threat. A...
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