Emerging Nokia Essay

1. What scheme would you recommend for Nokia going for fightd? Please pause a complete strategy that addresses the following issues Choice of scope does it make sense for Nokia to be in both emerge and developed foodstuffs, or should they exact not to play in certain markets? How integrated should it be into manufacturing, run (apps), software development, sales, etc? Answer1 Choice of scope With dwindling sales in developed countries like USA, UK, Germany, Russia and Italy and even in rising markets like India, Indonesia and Brazil (as per Exhibit 1) despite previously having a stronghold, Nokia at one time had to decide if it should continue its focus on emerging markets or attempt to salvage the sales even in the developed markets. Status in developed markets1. The operators usually have more power merely this was changing since the emergence of iPhone. It is a replacement market with users looking for up gradation 2. Competition- Growing competition from companies like Motorola, Samsung, LG and Sony Ericsson. The RIMs launch of Blackberry(2002) and apples iPhone (2007) was a further set back 3. New Operating System- Emergence of new user friendly operating systems such as Googles Android and Microsofts Windows mobile further put Nokia on the back foot 4. Inability to understand demand- Nokia failed to identify the growth consumer conduct for touch sort unwrap phones 5. Target Nokia operated at all price points where as competitors like Apple (high-end segment) and Samsung( mid and high end segment) had a clearly drawn up strategySlowdown in some emerging markets1. Reverse bundling allows the manufacturer to wield more power than the operator 2. There is lower cost of mathematical product which helps produce inspirational products at low rates 3. The growing competition from companies like Samsung that were caning the latest technology at competitive prices 4. Therefore, Nokia lost out on the middle and high segment but continued to grow i n the low-end mobile segment as it had identified the gaps in emerging markets and customized services to suit the local consumers Nokia must recognize the difference in the different marketsegments and take the challenges head on to be able to operate in both markets. It must clearly identify the segments it wants to operate in and withal change its positioning based on the data below. Data from Exhibit 11Percentage of phone sales by segmentEmerging MarketsDeveloped CountriesMid EastAP w/o JapanLatin AmericaE. atomic number 63JapanW. EuropeNorth AmericaBasic41%43%20%34%0%4%8%Enhanced40%44%58%45%32%29%43% skilful Phones- E. level10%7%12%10%6%34%8%Smart phone- Feature10%6%9%11%62%33%41%Penetration58%45.50%80.30%127.50%86.60%122.90%84.90%Nokia Market Share61.40%42.30%32.80%48%0.30%39.40%7.20%In emerging markets, Nokia must focus on Basic and Enhanced phones, as that is the largest segment as the market is still evolving and low cost handsets coupled with customized services impart h elp further grow its footprint. In developed countries, Nokia should look at development of high end- high technology driven models in the Smart Phones origination Level and Feature segment. At the same time when it comes to Japan, Nokia should look todivest as it is largely smartphone driven market and Nokia has truly little market care and does not have the requisite technology to successfully compete in that segment yet. It is essential for Nokia to follow the innovations in developed countries especially USA and conform them to developing markets if it wants to stand up against competition in both the markets.Mobile phone industry has followed the International Product Life Cycle but now they have reached a stage where different approach is required for innovation to take place in developed and developing markets to meet their unique(predicate) take aim. other key thing that Nokia must do is to reconsider its Transnational Strategy and adopt a Multi-Domestic Strategy to be able to cater to the hard-hittingive needs of both the developed and emerging markets and to be more locally responsive.Level of IntegrationManufacturing- It should continue to be highly integrated as that is its incumbrance energy and contributed to operating profits with a CAGR of 13%. It helps in cost control especially in price-sensitive emerging markets. Operating System- Low integration. The future of Symbian isnt very bright as competitors like Android of Google and Apple already have a lot of applications to offer on their OS. hence, it must look to finding a partner for a better OS as has been shown by its adoption of windows OS. Service (Apps) Low integration. This can also be outsourced since it is not a core competency of Nokia and customer Value given to third party applications is on the rise (as per Exhibit 6) Sales and Distribution- Should be highly integrated as it has already developed a vast distribution and achieved great penetration in emerging markets wh ich has been a source of higher margins by direct selling to consumers and is also a core competency.2. What products should it offer smart phones, low end phones, etc? Source of advantage what give be the distinctive competitive advantage that Nokia will offer? Choice of activities what choices should Nokia make in all its key activities, and where will it locate those activities for eg., HR policies, manufacturing, R&D, software development, sales and marketing, etc. What is the justification for your strategy passport?Answer2Addressing the consumer needs should be the strategy for Nokia in both emerging and developed market. In the emerging markets where Nokia is already a leader, it should focus on catering to the growing bottom of the pyramid consumer. The biggest advantage that Nokia offers is its reach. It should focus on its complimentary telecom industry trend, specifically in India, telecom players are involved into price war and which gave customer a higher bargaining power to switch. In such case coming up with dual sim phone would cater to the primary need of market. The applications in the phone should be in sync with local leisure such as music, newspaper and such more. Instead charging user for Life tools, revenue generation should be from advertisers. Provide time bound high end test features in low end phone during successive OS updates this will generate user awareness and need for high end smart phone.On the other hand, in developed markets, Nokia has lost its share to other players. node demands smartphones with high quality user interface experience and applications and data security (RIMs competency), Nokia need to target it. Nokias target should be the esteem need of user. Developing an OVI ecosystem with third party app developers, advertisers through more free and few paid applications for users. This will give Nokia a distinct advantage in the market if acted as 1st mover. More investment and development for user data security w ill generate trust among the users. In the mobile phone industry, the product life cycle is very short. Every year a new product is available on the shelf. Hence responsiveness to the consumers need is a must. Nokia failed to do that this with the clamshell model in China. By the time it came out with the product, the trend for clamshell models had faded and Nokia lost out to competition.Key advantages of Nokiaa. 3 distinct operating system platforms that can offer the base for wide range of products catering to all user segments. b. Longest and complex supply chain in the world. It has the most efficient sourcing, logistics, manufacturing, and distribution of any company in the world. c. Nokia offers the OVI Store the second largest app store in the world which is growing 70% per month as per Tero Ojanpera, Nokias EVP for the Services. d. With the acquisition of Navteq Corporation, it has a strong presence in the GPSworld and provides a wide range of geographic image support coveri ng closely more than 180+ countries. e. In India. Nokia has a strong hold of rural market with their distribution system handles by HCL Info systems. In Latin America, it has a dedicated team to manage the relationship with America Movil and Telefonica and to co-ordinate sales and services across the region.Choice of activitiesa. HR policies should be locally controlled by subsidiaries to withhold local culture intact. b. Manufacturing should be done on a global scale to utilize cost and resource arbitrage. Core product R&D should be centralized with satellite R&D in each market to add local flavor to the product. c. Software development centers have to be installed in countries like India or Philippines to utilize local talent and expertise in software development. d. Sales and marketing should be again localized. Country specific distribution channel should be adopted.