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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
Rubber
Founded in 1865 Electronic Mobile
production
with paper mills products phones
(boots)
Growth of Nokia

Monopolistic markets led to inefficient fixed- Most efficient supply chain


lines
Ovi stores which offered music,
Low average disposable incomes
location etc.

Limited access to computers led to mobile phone Acquisition of Navteq Corp. for navigation
growth purposes

Bidding models followed by the government First smartphone introduced by Nokia

Pre-paid model more prevalent because of no credit 3 distinct platforms for different price
requirement points
Concept of reverse bundling in emerging
markets 55% revenue from low-end markets

Patterns in emerging Nokias response to change


economies
Industry Trends
Developed Emerging
Markets Markets
Apple, India
North Palm, RIM, Nokia,
China
America HTC, LG,
Africa
Motorola, Samsun
Europe Sony Latin
g
Ericsson America

Market Market
Markets Markets
Leaders Leaders
Criteria Developed Markets Emerging Market
Disposable Income High Low
Mobile Penetration High Low
Tie ups with service Forward Bundling Reverse Bundling
providers
Payment Plans Mostly Post-paid Mostly Pre-paid
Buying Pattern Mostly replacement Mostly new handsets
Nokias Market Share Low High
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 Low Priced Phones
local conditions Redesigned logistics
NOKIA 1616 & production process
New Product Service for price reduction
relevant to the Very less price as
market compared to
Life tools developed markets
Nokia Money

Manufacturing Focused on making


facility at each of the product relevant to
major markets the customer
Extensive Made for India
distribution system Campaign
Extensive network of Hindi Language SMS
customer service campaign
centers Van Operations
requirements
Focus on specific requirements for emerging
technology
understanding
No functional changes in software Failure in
Unable to tap the market by enhancing their
players
smart phone capabilities
existing and new
Motorola, Samsung, LG & Sony Ericson emerged competition from
strong
Blackberry with and Apple with iPhone
Increasing
Apple has come with OS to integrate data, audio, operating systems
music and Internet in one device Emergence of new
Android from Google
No specific segment try to offer at all price
points
focus
Apple catering to needs of high end market
Lack of market
Samsung middle to high end
developed markets
Reasons for Nokias loss in the
I-R Grid

Global Standardization Transnational Strategy


Pressure for cost reductions

Strategy

International Strategy Localization Strategy

Pressures for Local Responsiveness


Pressure for cost reductions I-R Grid

Global Standardization Transnational Strategy


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

Pressures for Local Responsiveness


I-R Grid

Transnational
Pressure for cost reductions

Offer localized Strategy


products worldwide
Move from low-end
market to high-end
market completely
because pressure for
cost reduction is low
Localization Strategy

Pressures for Local Responsiveness


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

Emerging markets Emerged markets


Meet the need of low- Cater to the need of
end markets high-end market
Choice of Market
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 2nd
position by the same year
16000
Operating Profits Year Operating
14000 Profits
12000 2004 8374
10000
2005 9237
8000
2006 11130
6000
2007 14554
4000
2008 5362
2000
2009 1331
0
2004 2005 2006 2007 2008 2009
Choice of Market
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 Projection of sales in different regions
result of which Nokia has to
follow different strategy
Market Approaches

Enhanced and smart phones


should be focussed
Developed Since it is a replacement market
Will help them to understand
markets latest technologies
Focus on services & 3rd party
applications

Basic and enhanced phones


should be focussed
Developing Price should be reduced based on
the reduced supply chain cost
markets Offer enhanced phones at the
price of basic phones
Core Competencies
Scope of Activities
One of the sustainable core competencies for
Nokia
Manufacturing Nokia should retain the manufacturing capabilities
in order to maintain cost leadership in the
emerging markets

Focus on market research


Focus on making the phones more user- friendly
R&D R&D for basic phones & enhanced phones to
capture the emerging markets

Tie ups with application developers


Software Third party application accessibility
Development Focus on developing more applications providing
value added services
Distribution network is one of the sustainable core
competencies for Nokia by providing extensive
network
Sales & Direct sale to the end consumers hence higher
Marketing profit margins
Sales should be retained by the company
Marketing of product & additional services as a
complete package is important
THANK YOU!