Nokia Case Study Analysis

Introduction1

Discussion1

Industry Identification1

Strategic Group and Map1

Nature and Analysis of Five External Forces surrounding Nokia2

Rivalry between Competitors3

Threat of new Entrant3

Threat of Substitute4

Power of Supplier4

Power of Buyers4

Stage in Life Cycle5

SWOT Analysis of Nokia5

Corporate Level Strategy6

Business Level Strategy6

Functional Level Strategy7

Financial Performance Indicators7

Problem Identification7

Decline Profits7

Decreasing Sales8

Declining Share in Smart phones Market8

Declining Brand Image in North America8

Alternative Solutions8

Implementation Plans10

Assessing the Feasibility of Alternatives12

Feasible Alternatives13

Conclusion14

Nokia Case Study Analysis

Introduction

Nokia, the leading mobile phone company of the world evolved in 1967 as a result of a merger of three companies. In early 1990's, the company decided to divest to all its functions and chose the telecommunication as its core business. After that company continue to make progress in the telecommunication market. Nokia introduced its first hand-handled phone in 1192 by using GSM technology. By 1998, Nokia became the world leader of mobile phones. Company expands its operations in 2007 when Nokia and Siemens jointly formed Nokia Siemens Corporation. It also acquired NAVTEQ, to support its navigation services. Nokia was the market leader by holding 35% share in 2010(Nokia.com).

Discussion

Industry Identification

Nokia is operating in the mobile phone industry. It is the fastest growing industry in the world. As the mobile phones are upgrading, latest trends are also emerging in the industry such as the trend of Smart phones(Nokia.com).

Strategic Group and Map

There are three strategic groups in the global mobile phone industry based on the prices of products, low end, middle end and high end. The first group which includes companies like Tracphone, LG, and Pantech are characterized by low and cheap phone prices with only basic mobile phone technologies(Conly, 2010). The second contains companies like Sony, HP and Nokia. This group is characterized by phones with slightly higher prices than the low end phones. They offer phones on prices of $100 mark and contain some multimedia capabilities along with the basic mobile technologies. Finally, the last group which includes companies like Apple, RIM and HTC, is characterized by smart phoned having high prices. This strategic group is growing fast because of the continuous rise in the demand of smart phones(Conly, 2010).

Strategic Group Map

High

Price

Low

Low Market Share (%) High



Nature and Analysis of Five External Forces surrounding Nokia

There are five external forces that surround a company. There are rivalry between competitors, threat of new entrant, threat of substitute, power of suppliers and power of buyers.

Rivalry between Competitors

The rivalry between competitors is high. The concentration in the mobile industry makes the competition tough between rivals. Low product differentiation among rival companies increased competition in terms of retaining customers. There are a huge number of rivals operating in the industry including Apple and HTC(Husso, 2011). Emerging low cost manufactures like ZTE and Huawei giving a tough competition to Nokia in the low end phones. Product innovations from leading mobile companies also place an intense competition in the high end phones market. Moreover, competitors are also going towards vertical integration that are making the competition tough such as Apple adopted a vertical model by designing the ...