Nokia Competitive Intelligence, Strategy and Marketing analysis
13202555 Nokia Strategy Final
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Transcript of 13202555 Nokia Strategy Final
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NOKIASSTRATEGY By-
Prasenjit (34)Vibhas (52)Vikram (53)
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OF
Established in 1865 as a wood-pulp mill byKnut Fredrik Idestam on the banks of Nokianvirta river in Finland.
Finnish Rubber Works acquired Nokia WoodMills Telephone and Telegraph Cables
Nokia Corporation created - 1967 - paperproducts- car tires- personal computers-cables
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OF
Nokia began developing the digital switch(Nokia DX 200) which became a success.
1991 Nokia - agreements to supply GSMnetworks - nine European countries.
August 1997 Nokia - GSM systems to 59operators in 31 countries.
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THE VISION
The Vision of Nokia:
Our vision is a world where everyone can
be connected. Our vision is to ensure that 5billion people are always connected at anygiven point and to achieve 100 fold morenetwork traffic
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NOKIA TODAY
H ead office in Finland; R&D, production, sales,marketing activities around the world
World s #1 manufacturer of mobile devices,with 38% share in 2007
112 262 employees
Sales in more than 150 countries
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CORPORATE STRUC TURE
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NOKIA AND ITS SBU S
NOKIA
MOBILE PH ONES
MULT IMEDIAENTERPRISESOLUT IONS
NOKIA SIEMENSNETWORK
CELLULARTECH NOLOGY
DEVICES
NETWORK SECURITY CORPORATEEMAIL
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PESTEL ANALYSIS
Political As markets are deregulated, both operatorsand manufacturers are free to act independently of government intervention. In Countries like India andChina where Partial regulations exist, governmentintervention does take place.
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PESTEL ANALYSIS
Economic With incomes rising, people have moredisposable income, which enables consumers to bemore selective with their choice of mobile phone,looking to other factors rather than fulfilling the mostbasic of user needs (text messaging and phone calls) and
price being such a key factor.
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PESTEL ANALYSIS
Social T he rise of the so-called information societyhas made telecommunications increasingly moreimportant to consumers, both in terms of work andleisure. Users are more aware of mobile phone handsetchoice and advancements due to increased information
availability.
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PESTEL ANALYSIS
Technological T here have been many global
advancements in technology such as MMS, Bluetooth,WAP, GSM, GPRS, cameras etc. T he Asian markets aremore technologically advanced than their Europeancounterparts, for example in 2002, just 4% of phones
had cameras, whereas in Asia 90% did.
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PESTEL ANALYSIS
Environmental T here is a concern that the use of
mobile phones could be damaging to health, withtumours potentially being caused by the waves emittedby the handsets. T here is also immense wastage createdby unwanted mobile phones that are thrown away as
they are non-biodegradable.
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PESTEL ANALYSIS
Legal Difficult to patent mobile phone designs.Technology Infringement causes a lot of legal issues.
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PORTER S DIAMOND ANALYSIS
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Porter s 5 Forces Framework Analysis: TheMobile H andset Industry
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RIVALRY AMONGC OMP ETITORS
INDUSTRY GROWTH RATE: The industry has grown by just 10% during2007. This is down from the 23% growth rate seen in 2006.CONCENTRATION AND BALANCE: The major players are BenQ-Siemens,LG, Motorola, Samsung and Sony Ericsson.
INFORMATIONAL COMP LEXITY: Devices are becoming more complex andgetting features (picture, audio, video) that are outside the corecompetencies of traditional manufacturers.
CORPORATE STAKES: H igh stakes for the companies because of hugeinvestments into the business.
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BARGAINING POWER OF
BUYERSBUYER INFORMATION: Buyers have comparative information about theproduct in terms of price and features.
BUYER CONCENTRATION: Network operators are relatively concentratedand large service providers such as Orange and Vodafone have highbargaining power.
SWITCHING COSTS: Individual buyers have low switching costs and are
price or feature sensitive.
PRODUCT DIFFERENCES: Low degree of product differentiation and anynew feature or technology is quickly imitated.
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BARGAINING POWER
OF SUPP LIERS
SWITCHING COSTS: A large number of suppliers for non criticalcomponents.
For critical components suppliers work closely with companies as theyinvolve joint development of specialty inputs and sub-systems.
IMPA C T ON DIFFERENTIATION : Companies could switch suppliers for noncritical components but are closely tied to them for critical componentsand sub-systems.
THREAT OF FORWARD IN TEGRATION: Suppliers do not pose any crediblethreat of forward integration even though they are outsourced.
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TH REAT OF NEW ENTRANTS-ENTRY BARRIERS
PROPRIETARY PRODUC T DIFFERENCES: Technology and product designsare protected by patents.BRAND IDENTITY: Powerful brand identity of the existing playersdeveloped through advertising and product excellence.ECONOMI ES OF SCALE: H igh fixed costs means that volume is essential tocompanies.CAPITAL REQ UIREMENTS: Activities such as R&D and advertising requireslarge capital commitments.EXPECTED RETALIATION: Existing competitors have the financial clout todeter new entrants.ACC ESS TO NECESSARY INPUTS: Suppliers work closely with existingcompanies and therefore critical components may only be available at apremium.
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TH REAT OFSUBSTITUTES
PC based applications such as IP TELEPHONY
Convergence between PDA S AND MOBILE PHONES.
Technological regression due to ESC ALATING MOBI LE COSTS.
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Basis of Competitive
AdvantageProduct competitiveness : Nokia profitably competes in all mobile devicesegments from entry-level to high-end. It has the broadest product
portfolio in the market.Customer satisfaction : Nokia uses customization to gain greater customersatisfaction
R&D effectiveness : Nokia spent about USD 3.4 Billion on R&D.
Demand-supply network alignment : Nokia captures its potential upside
in high-demand situations by aligning its demand-supply network.End-to-end capability : Nokia systematically leverages its end-to-endcapability by integrating mobile devices, applications and infrastructure
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NOKIA S VALUE NETWORK
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SWOT ANALYSISSTRENGTHS
Strength of CORPORATE BRANDDesign, the branding and the technologyDominant player in SMAR TPHONE
marketLargest C ELL PHONE VENDOR
WEAKNESS
Slow to adopt new ways of thinking-C lamshell PhonesBeing the market leader and its increase
role in SYMBIAN is giving Nokia a badimage
OPPOR TUNITIES
Growth markets such as C H INA, LATIN
AMERIC AIncrease their presence in the C DMA
marketLeverage its infrastructure business to
get preference and stronger position withcarriers
TH REATS
INFLEC TION POINT- A Disruptive
Technological ChangeCheaper MID RANGE models from
Motorola & othersOperators want to lessen their
dependency on handset vendorsPotential threat from Microsoft s entry
into mobile telephony
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Vs
One To One Comparison
Main Division: MobilesNOKIA MOTOROLA
SALES 60.2% 66.2%
OPERAT ING INCOME 70.4% 65.7%
Key SuccessFactors
NOKIA MOTOROLA Edge
TechnologyStrategy
5 3 Nokia
3G Products 4 5 Motorola
Applications 5 3 Nokia
Software 5 4 Nokia
Total 19 15 NOKIA
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Vs
200 Million 75 Million
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VsContinuous innovation and
new features.Moves faster than rivals in
introducing new features
H as focused on iconicproducts to change trends onthe market
Year No of NewProducts
2002 34
2004 36
2006 39