BACHELOR IN MANAGEMENT

BBNG 2103
INTERNATIONAL BUSINESS

ASSIGNMENT

Name :
IC No/Matrix No :
E-mail Add :
Mobile Phone No :

MAY 2010 SEMESTER

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 TABLE OF CONTENTS
PAGE

Porter's Five Forces Model 3-5

Analysis for Nokia based on Porter’s Diamond Model
of Competitive Advantage 5-6
Conclusion 7
Bibliography 8

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INTRODUCTION

Porter's Five Forces Model

American Michael Porter was born in 1947. After initially graduating in aeronautical
engineering, Porter achieved an economics doctorate at Harvard, where he was subsequently
awarded university professorship, a position he continues to fulfil at Harvard Business School.
His research group is based at the Harvard Business School, and separately he co-founded with
Mark Kramer the Foundation Strategy Group, 'a mission-driven social enterprise, dedicated to
advancing the practice of philanthropy and corporate social investment, through consulting to
foundations and corporations'. A prime example of someone operating at a self-actualization
level if ever there was one.

After his earlier work on corporate strategy Porter extended the application of his ideas and
theories to international economies and the competitive positioning of nations, as featured in his
later books. In fact in 1985 Porter was appointed to President Ronald Reagan's Commission on
Industrial Competitiveness, which marked the widening of his perspective to national economies.
By the 1990's Porter had established a reputation as a strategy guru on the international speaking
circuit second only to Tom Peters, and was among the world's highest earning academics.

Porter's first book Competitive Strategy (1980), which he wrote in his thirties, became an
international best seller, and is considered by many to be a seminal and definitive work on
corporate strategy. The book, which has been published in nineteen languages and re-printed
approaching sixty times, changed the way business leaders thought and remains a guide of
choice for strategic managers the world over.

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Aside from his innovative thinking, Porter has a special ability to represent complex concepts in
relatively easily accessible formats, notably his Five Forces model, in which market factors can
be analysed so as to make a strategic assessment of the competitive position of a given supplier
in a given market. The five forces that Porter suggests drive competition are:

1. Existing competitive rivalry between suppliers

2. Threat of new market entrants
3. Bargaining power of buyers
4. Power of suppliers
5. Threat of substitute products (including technology change)

Porter's Five Forces model can be used to good analytical effect alongside other models such as
the SWOT and PEST analysis tools.

Porter's Five Forces model provides suggested points under each main heading, by which you
can develop a broad and sophisticated analysis of competitive position, as might be used when
creating strategy, plans, or making investment decisions about a business or organization.

Porter is also known for his simple identification of five generic descriptions of industries:

1. Fragmented (eg, shoe repairs, gift shops)

2. Emerging (eg, space travel)
3. Mature (eg, automotive)
4. Declining (eg, solid fuels)
5. Global (eg, micro-processors)

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And Porter is also particularly recognised for his competitive 'diamond' model, used for
assessing relative competitive strength of nations, and by implication their industries:

1. Factor Conditions: production factors required for a given industry, eg., skilled labour,
logistics and infrastructure.
2. Demand Conditions: extent and nature of demand within the nation concerned for the
product or service.
3. Related Industries: the existence, extent and international competitive strength of other
industries in the nation concerned that support or assist the industry in question.
4. Corporate Strategy, Structure and Rivalry: the conditions in the home market that
affect how corporations are created, managed and grown; the idea being that firms that
have to fight hard in their home market are more likely to be able to succeed in
international markets

A graphical representation of Porter's National Diamond

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Analysis for Nokia based on Porter’s Diamond Model of Competitive Advantage

The state that undergone Nokia in few years after the end of world war I was the situation which
showed how this company start developing after faced a crisis and difficulties. This state in
Porter’s Diamond is Corporate Strategy, Structure and Rivalry where Nokia was bought by
Finnish Rubber Workers and then the company had bought Finnish Cable Works which made a
cable for telecommunication and electricity. The merged of this three companies making this
company growth and produced various of products. This situation was the situation where this
develop the company strategy, improve company structure and more further can compete with
any competitor exists during that time.

During that time when the three companies merged with and this resulted the growth of existence
production and various of product that produce by Nokia. The need of skilled labour for the
company increased in other to help the company development. Because of that situation Nokia
certainly improve the infrastructural facility and also the company logistics. This is the Factor
Conditions for Nokia.

In middle of 60s middle Nokia in the state of Related and Supporting Industries after
produced first electronic device called pulse analyzer that expended at a nuclear power plant,
Nokia had also become a pioneer in issuing VHF radio with Salora Oy company cooperation and
later by using this technology they have inaugurated in-car telephone network radio ARP and
this was the first of it kind in Finland and were great triumph for Nokia.

The Demand Conditions for Nokia when they produce a product name Mobira Cityman 900,
even though the product very expensive during that time but the product sold like a hot cakes.
The reason of this situation because of at that time mobile phone was a new technology and only
have fix phone as an alternative. The exist of Mobira Cityman 900 as the latest and easiest way
to communicate makes the high demand for the product.

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Conclusion

As the objective of this paper is to introduce some of the key aspects and serve as a reference for
discussions and further research, the following conclusions are tentative.

1. National competitiveness reports measure areas that have not been very important for the
mobile industry specific competitiveness.
2. Porter's diamond model for national competitiveness is a good starting point for the national
success factor framework for mobile industry sector. Adding certain emphasis areas improves
the explanatory power of the framework.
3. An evolution can be identified in the Nokia mobile industry success factors. The framework
categories most crucial for the success has changed and will probably continue changing.
4. The national role for the mobile industry success is diminishing. The mobile industry success
factor evolution analysis summary based on the synthesized framework and key changes in the
environment.
Nokia is absolute world leader in mobility with an impressing 40 percent global market share
and huge global customer base that now numbers more than two billions of Nokia users.

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 BIBLIOGRAPHY

• http://press.nokia.com/PR/200502/980488_5.html.
• http://www.cellularnews.com/search/index.php?
term=finland.
• http://www.finnishmobiletv.com/default.aspx?f=25&d=38.

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