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Harsh Yadav PGP/17/018

Pritam Karmakar PGP/17/031


Priyanka Chauhan PGP/17/032
Sushant Kumar PGP/17/053
Harini Kancharana PGP/17/085

Case Summary
Founded in 1865
with paper mills
Rubber
production
(boots)
Electronic
products
Mobile
phones
Monopolistic markets led to inefficient fixed-lines
Low average disposable incomes
Limited access to computers led to mobile phone growth
Bidding models followed by the government
Pre-paid model more prevalent because of no credit requirement
Concept of reverse bundling in emerging markets
Patterns in emerging economies
Most efficient supply chain
Ovi stores which offered music, location etc.
Acquisition of Navteq Corp. for navigation purposes
First smartphone introduced by Nokia
3 distinct platforms for different price points
55% revenue from low-end markets
Nokias response to change
Growth of Nokia
North
America
Europe
India
China
Africa
Latin America
Markets Markets
Apple, Palm,
RIM, HTC,
Motorola,
Sony Ericsson
Nokia, LG,
Samsung
Market Leaders Market Leaders
Criteria Developed Markets Emerging Market
Disposable Income High Low
Mobile Penetration High Low
Tie ups with service
providers
Forward Bundling Reverse Bundling
Payment Plans Mostly Post-paid Mostly Pre-paid
Buying Pattern Mostly replacement Mostly new handsets
Nokias Market Share Low High
Developed Markets Emerging Markets
Industry Trends
Strategy followed for Emerging Markets
High market share in basic
phones market hence
incremental cash flows
Low manufacturing cost due
to mass production
Standardized parts and
postponement of
customization to the later
stage
Price sensitive market
Focus on low cost &
specialized innovations like
dust resistant keypad, FM,
flashlight etc
Loyal customer base to sustain
the basic phones market
NOKIA in Emerging Market
Product tailored to local
conditions
NOKIA 1616
New Product Service
relevant to the market
Life tools
Nokia Money
Focused on making
product relevant to the
customer
Made for India
Campaign
Hindi Language SMS
campaign
Van Operations
Manufacturing facility at
each of the major
markets
Extensive distribution
system
Extensive network of
customer service centers




Low Priced Phones
Redesigned logistics &
production process for
price reduction
Very less price as
compared to developed
markets
Reasons for Nokias loss in the developed
markets
No specific segment try to offer at all price points
Apple catering to needs of high end market
Samsung middle to high end
Lack of market focus
Apple has come with OS to integrate data, audio, music
and Internet in one device
Android from Google
Emergence of new
operating systems
Unable to tap the market by enhancing their smart phone
capabilities
Motorola, Samsung, LG & Sony Ericson emerged strong
Blackberry with and Apple with iPhone
Increasing competition
from existing and new
players
Focus on specific requirements for emerging technology
No functional changes in software
Failure in
understanding
requirements
I-R Grid
Global Standardization Strategy Transnational Strategy
International Strategy Localization Strategy
Pressures for Local Responsiveness
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I-R Grid
Pressures for Local Responsiveness
P
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Global Standardization Strategy Transnational Strategy
Attempt to minimize local responsiveness
Chance for the local consumers to perceive it as a global company
Market low-end basic phones to emerging markets

I-R Grid
Pressures for Local Responsiveness
P
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Transnational Strategy
Localization Strategy
Offer localized products
worldwide
Move from low-end market
to high-end market
completely because pressure
for cost reduction is low
I-R Grid
Attempt to maximize local responsiveness
Chance for the local consumers to perceive it as a
domestic company
Market low-end basic phones to emerging markets

Emerged markets
Cater to the need of high-
end market


Emerging markets
Meet the need of low-end
markets

Choice of Market
0
2000
4000
6000
8000
10000
12000
14000
16000
2004 2005 2006 2007 2008 2009
Operating Profits
Nokia should continue to dominate in the emerging markets i.e. follow Transnational
strategy
Looking at the operating profits, we can see a decline in the operating profits from the
year 2007
iPhone was launched in the year 2007 and Samsung also acquired 2
nd
position by the
same year
Year Operating Profits
2004
8374
2005
9237
2006
11130
2007
14554
2008
5362
2009
1331
Choice of Market
Projection of sales in different regions
Looking at the projection of sales
of mobile devices in various
regions, one can observe a 45.38%
share in Asia-Pacific region
Also, almost 9.5% share is in the
Latin America region
Emerging market seems to be
playing field for device
manufacturers
But the 36% of the sales in
emerged economies cant be
ignored
Pattern of technologies in
emerged and emerging economies
varies and as a result of which
Nokia has to follow different
strategy
Market Approaches
Enhanced and smart phones should be
focussed
Since it is a replacement market
Will help them to understand latest
technologies
Focus on services & 3
rd
party applications
Developed
markets
Basic and enhanced phones should be
focussed
Price should be reduced based on the
reduced supply chain cost
Offer enhanced phones at the price of
basic phones
Developing
markets
Core Competencies
Sales & Marketing
Distribution network is one of the sustainable core
competencies for Nokia by providing extensive network
Direct sale to the end consumers hence higher profit margins
Sales should be retained by the company
Marketing of product & additional services as a complete
package is important
Software
Development
Tie ups with application developers
Third party application accessibility
Focus on developing more applications providing value added
services
Manufacturing
One of the sustainable core competencies for Nokia
Nokia should retain the manufacturing capabilities in order to
maintain cost leadership in the emerging markets
R&D
Focus on market research
Focus on making the phones more user- friendly
R&D for basic phones & enhanced phones to capture the
emerging markets
Scope of Activities
THANK YOU!