Assingment International Business

8/10/2019 Assingment International Business

1/26

OPEN UNIVERSITY MALAYSIA

FACULTY OF BUSINESS AND MANAGEMENT

BBNG 3103

INTERNATIONAL BUSINESS

Name: MOHD ARIFF BIN MISNAN

Matric No: 86088888888NRIC No.: 868888888888

Telephone No.: 013-3888888

Email Address:[email protected]

[email protected]

Tutor: ZURITA MOHD SALLEH

Pusat Pembelajaran: SHAH ALAM SEKSYEN 13

SEMESTER MEI 2010
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


2/26


3/26

2

ASSIGNMENT QUESTION

PURPOSE:

This assignment is to give learners the opportunity to apply the principles of Porters Diamond

Model of Competitive Advantage.

CASE:

The Nokia Corporation (Nokia), based in Finland, is currently the biggest cellular phone

manufacturer in the world. Nokia started in 1871, when Fredrik Idestam and Leo Mechelin, set

up a company named after the town of Nokia.

By the end of World War I, Nokia faced difficulties and was bought by a galoshes manufacturer,

Finnish Rubber Works. A few years later, the company bought Finnish Cable Works, who made

telecommunications and electricity cables. The three firms merged in 1967 to form the Nokia

Corporation. Over the years, Nokia has been involved in making a large variety of rubber and

paper products, aluminum, electricity generators, electronic components, cables, consumer

electronics etc.

The first electronic device to be manufactured by Nokia was a pulse analyzer used in the nuclear

power plants. Along with a firm called Salora Oy, they pioneered VHF radio in the mid-60s, and

later introduced an in-car radio telephone network, called ARP, using this technology. This

network was the first of its kind in Finland and certainly the most successful of its type in the

world at that time.

In the late 70s, Nokia pioneered the worlds first digital telecommunications switch, the DX200.

In 1984, it bought over Salora Oy and formed a new mobile telecoms company, called Nokia-


4/26

3

Mobira Oy. It released its first product that same year, the Mobira Talkman, which was a

transportable phone with a size of a briefcase that could be charged from a car cigarette lighter

socket. It also introduced one of the worlds first hand-held phones, the Mobira Cityman 900.

Despite costing more than a family saloon car, Cityman sold like hot cakes, paving Nokias way

for its current dominance of the cellular phone industry. The company changed its name to Nokia

Mobile Phones in 1989, and soon became the sole focus of the entire corporation. Today, they

make and sell more mobile phones every year than any other manufacturer.

REQUIREMENTS:

Analyze the success of Nokia using the principles of Michael Porters Diamond Model of

National Competitive Advantage.


5/26

4

INTRODUCTION

Like each organization, each country is known in terms of its competitive advantage, for

example, USA for computers, credit cards, and movies: .Japan for consumer electronics and

automobiles; India for software professionals. Porter hascategorized various national attributes

in four groups that contribute to, or detract from, the creation of competitive advantage for the

firms of that nation.These attributes form what is known as the national diamond. Like others

country, the Nokia company was set up in 1865, when a Finnish mining engineer, Fredrik

Idestam established a wood pulp mill on the banks of the Nokia river in southern Finland to

manufacture paper. In 1967, three companies, the Nokia Forest Products Company, Finnish

Cable Works and Finnish Rubber Works merged. As Cable Works had expertise in power

transmission cables and phone lines, Nokia decided to start an electronics division to diversify

into telecom products in 1960.

Now, Nokia is a world leader in mobile communications, driving the growth and

sustainability of the broader mobility industry. Nokia connects people to each other and the

information that matters to them with easy-to-use and innovative products like mobile phones,

devices and solutions for imaging, games, media and businesses. Nokia provides equipment,

solutions and services for network operators and corporations. Nokia is a broadly held company

with listings on four major exchanges.

Nokia is engaged in the manufacturing of mobile devices and in converging Internet and

communications industries, with 128,445 employees in 120 countries, sales in more than 150

countries and global annual revenue of EUR 50.7 billion and operating profit of 5.0 billion as of

2008. Nokia produces mobile devices for every major market segment and protocol,

including, CDMA, and W-CDMA (UMTS). Nokia offers Internet services that enable people toexperience music, maps, media, messaging and games. Nokia's subsidiary Nokia Siemens

Networks produces telecommunications network equipment, solutions and services. The

company is also engaged in providing digital map information through its wholly-owned

subsidiary Navteq.


6/26

5

Nokia has sites for research and development, manufacture and sales in many countries

throughout the world. As of December 2008, Nokia had R&D presence in 16 countries and

employed 39,350 people in research and development, representing approximately 31% of the

group's total workforce. The Nokia Research Center, founded in 1986, is Nokia's industrial

research unit consisting of about 500 researchers, engineers and scientists. It has sites in seven

countries: Finland, China, India, Kenya, Switzerland, the United Kingdom and the United

States. Besides its research centers, in 2001 Nokia founded (and owns) INdTNokia Institute of

Technology, a R&D institute located in Brazil. Nokia operates a total of 15 manufacturing

facilities located at Espoo, Oulu and Sal, Finland; Manaus, Brazil; Beijing, Dongguan

and Suzhou, China; Farnborough, England; Komrom, Hungary; Chennai, India; Reynosa,

Mexico; Jucu, Romania and Masan, South Korea. Nokia's Design Department remains in Salo,

Finland.

According to the Diamond Model of National Competitive Advantage model of Michael

Porter, a competitive strategy takes offensive or defensive action to create a defendable position

in an industry, in order to cope successfully with competitive forces and generate a

superiorReturn on Investment.According to Michael Porter, the basis of above-average

performance within an industry is sustainable competitive advantage.
http://www.12manage.com/methods_roi.htmlhttp://www.12manage.com/methods_roi.html


7/26

6

FACTOR CONDITION

As the most successful organizations in the history of Finland, Nokia is successful in different

markets. In 1996 it estimated 6 % of net sales and a 46 % penetration rate in the Finnish market

for cellular mobile products. In Scandinavia, the market penetration rate reached 44 % in

Norway and 29 % in Denmark. Sweden was ranked as Nokias 8 major market with sales

estimated to 8 billion FIM (Nokia 1997). As the company increased its knowledge in

telecommunications in the late eighties, it entered the European and world arena. All these

indications demonstrate the local adaptation and usage of the cultural differences Nokia adopted

in the Nordic countries during the eighties and nineties.

Today, Norway is the only Scandinavian country that not is a member of the European

Union (EU). The other Scandinavian countries, Sweden and Denmark, have been members since

1995 and 1974. Finland became a member in 1994. The importance of Finlands participation in

the EU is obvious to the global localization of the Nokia Group today. Nokia is represented with

sales offices in every European country, US and in Asia. Nokia has production facilities in

Europe, Asia and the US and R&D departments in 11 counties. The organizations economic

development resolved in heavy foreign capital investment and is today represented in European

and US stock exchanges. In some respects, Nokia as a Finnish company could be identified as a

Baltic country, rather than the belongings to the western European culture and economy.

The Core Competence

Part of Nokias core competence is the knowledge and experience in the wireless cellular and

network services industry. By focusing on superior products and services, Nokia has gained

several national and international awards. Introducing new product modifications and

technological enhancements is part of the companys product leadership. With a wide range ofproducts, Nokia has applied products independently of technical standard or geographical

location. Nokia also participates in developing new global standards for future

telecommunication needs and trends. With its leading position as mobile phone manufacturer

and supplier of digital mobile networks, Nokias participation in development of future

technologies enables them to deliver excellent products for the next decade.


8/26

7

The Nokia products are targeting to specific market segments. The Nokia design on portable

cellular phones is characterized by lifestyle, freedom, opportunities of choice, technology and

urbanization (Nokia 1997). The product design both emphasizes consumer behavior and

technical industry standards.

Nokia was the first cellular mobile manufacturer who adopted models for new ways of

thinking into their marketing operations. The general management urged marketing managers to

think of companies as repositories of skills, rather than portfolios of products. A marketing team

from Nokia went to Venice Beach in California and the Kings Road in London, to observe the

way that mobile phones were becoming fashion accessories (Economist March 1997:77).

This unusual approach resulted in a superior product design and control of consumer

segment. Nokia attached a unique value of trends, lifestyles, freedom, power, and technology

among others, into their products. This unique value perceived by the customers resulted into a

leading brand well-positioned (Keegan 1999:8-7; Quelch and Kenny 1994:153-154 and 158-

160).

The Unique Value

Nokia saw that the customer preferences were starting to change, and applied these changes to

their products. To spot the needs in the market, and to tell the customers that this is the phone

they need, are some of Nokias strengths. Nokia has for many years had a focus on design,

customer adaptation, and user friendliness. This has turned out to be a success, as they passed

Motorola in 1998 as the world-leading supplier of mobile phones (Nokia 1998). The unique

value seen by consumer is identified in the products unique value. The unique value can be

viewed as the customers perception on its benefit preferences divided by actual price.


9/26

8

A Global Winner

The outstanding growth and success of Nokia can be summarized as the overall performance,

focus and strategic decisions made in the early days of the mobile strategic decisions made in the

early days of the mobile cellular industry. Nokia is characterized as a global winner for several

reasons

Product leadership

The operational excellence by the top Management of Nokia is one of the reasons why it resulted

in Nokia being a cellular phone product leader in the market. Identification of the internal

processes from production to distribution (TQM) the efficiencies in the production process and

the distribution channels of Nokia became the product leader in cellular phone industry.

As the history of Nokia shows that Nokia is an important part in Finland economy which

contributes to Nokia being a success in its own country of Finland. It also provide an

advantageous platform for Nokia to continue expanding its reach into other European countries.

Keeping the global focus on segments is one of the ways that Nokia was able to meet the needs

of customer and design and producing products that is in line with customer wants. As the

company grew, they identified new needs for maturing markets and created customer needs as

the products were launched.

The Global Cellular Mobile Industry

The global mobile phone industry is based on many different manufacturers and operators. The

industry is based on advanced technology and many of the manufacturers are operating in

different industries, where they use their technological skills, distribution network, market

knowledge and brand name. Three large manufacturers of mobile phones are today dominating

the global mobile phone industry; Nokia, Eriksson and Motorola. In addition to these companies

there are many manufacturers that operate globally and locally. This report focuses on the

competition among these organizations.


10/26

9

DEMAND CONDITIONS

Production units

Networks technology Mobile devices and technology

China Brazil

Finland China

Finland

Germany Great Britain

India Hungary

India

Mexico

Romania

South Korea

Developing affordable mobile devices that can contribute to increased economic growth

and quality of life of customers and creating new need and wants that coincide with

customer cycle of consumption. Devices that not only affordable but also maximize the

experience of customer usage.

As the leading cellular producer in the world constant innovation is needed to compete

successfully with other cellular producer. Focusing on human technology; enhancing

communication and exploring new ways to exchange information Nokia with the help of

its R&D department have successfully create new technology or a derivative of those

technologies that is constantly requested by forward pushing markets.

Using a simple but effective catchphrase which is to connect people as a general way of

establishing its commitment to help its customers to connect to the world which helped

Nokia to achieve its major share of the cellular market in the world. Thats why Nokia


11/26

10

will never stop finding new ways of connecting people which will enable them to attain

more market dominance.

Being the leading cellular company in the world Nokia is focused on building customer,

relationship and trust. Which has proven to be one of the main reason why the consumer

market would think of Nokia as having an advantage over other cellular products. In

order for Nokia to build customer relationship and trust Nokia have learned to have a two

way communication between customer and Nokia to receive information on how to

improve customer relationship and trust with the help of product innovation and

improvement.

Building friendship and trust is the heart Nokia brand which is the branding strategy of

Nokia. Using its corporate relations and responsibility as one of its platform Nokia

positioned its brand as building friendship and trust, including its image and brand

strategy.

As with other major companies in the world the Nokia Logo shows their brand

personality.

Product Variety

The product range of Nokia would cover all segments of its customer. The professional

customer would require a cellular phone with email ability, or the mass teenager market would

require entertainment functions in their product range. Nokia would also cater to many other

segments including the rugged market where Nokia developed a cell phone that is considerably

durable. Nokia arranges its product line by series. In every series of Nokia there are large

numbers of sets thus large variety. e.g. entry level include 1200,1208,1100,1110,1110i,1112

other series are 3210,3310 or the E series E71 etc.

\


12/26

11

Quality

Nokia gain brand personality and market shares because of its quality. Compared to its major

competitor at one time (Motorola) the quality of its cellular phone. The quality of its software

interface is also very good and reliable with an added advantage of having simple to use

interfaces as compared to Motorola.

Design

Nokia sets are of various designs such as Flip sets, Flat sets, Slide sets, Sets with rotating

camera etc. The design would be updated very rapidly and would favor heavily with market

demand. Similar functional sets could have different designs such as a single function would be

designed as flat set as well as flip sets in order to satisfy customer that prefer either type of sets.

The Nokia design would be technologically stylish and functional.

Features

Each set of Nokia has its own features. The models of Nokia are based on features. Example of

Nokia cell phone features are multimedia or internet accessible. Other features are included

which are considered basic features which is a compulsory feature for all cell phones example is

SMS features. Currently Nokia features have increasingly moved towards the communicator

where by a key pad is included for easy typing.

Brand Name

The Nokia logo is a simple logo which bears the name NOKIA. The brand name of Nokia is

written on each set. Instead of an ambiguous logo or brand name it is simple to recognize a

Nokia phone or product.

Packaging

On packaging of Nokia sets will detail information about the set which is given and packing is

made attractive by pictures showcasing the Nokia product and brand strategy of friendship. The

quality of the packaging hard box reflects the quality of the product. Each set has its own booklet

with information about its features and cell phone. And also warranty cards and other

information. If the set includes other accessories the packing would allow for different


13/26

12

compartment of the packaging. Which means the quality of the product would not be

compromised due to shipment of product.

Price

Price targeting both the ends of the affordability spectrum. Not only Nokia cater for low end of

customer but also higher end of customer such as professionals and working or employed buyers.

The Nokia price range is from RM450 to RM2000 in Malaysia depending on the distribution

centre. But due to its availability around the world Nokia prices would depend on the currency

from each countries. Pricing strategy. One of Nokia pricing strategy is to offer cash allowances.

Advertising

Via TV , Sign boards , Bill boards , Radio and Newspaper, Broachers , Posters ,Dummies and

display stands

Personal selling

By product training to Distributer.

Channels

Nokia > Distributer > Whole seller > Retailer > Customer

Distributer

Nokia main distributers are I2, United mobiles, Mobile zone and Advance telecom. Nokia

mobiles are mostly available through every mobile outlet.


14/26

13

Product mix of Nokia

Classic seriesThe Mobira series.

Original series

10009000 series

Nokia 2000 seriesBasic series

Nokia 3000 seriesExpression series

Nokia 5000 seriesActive series

Nokia 6000 seriesClassic Business series

Nokia 7000 seriesFashion and Experimental series

Nokia 8000 seriesPremium series

Nokia 9000 seriesCommunicator series (discontinued)

Special function phones

Nokia EseriesEnterprise series

Nokia NseriesMultimedia Computer series

Nokia N-GageMobile gaming devices (discontinued)

VertuLuxury phones

Card phones (PCMCIA)

Concept phones

Other products

Digital television

ADSL modems

WLAN products

Telephone switches

GPS products

TETRA

Internet tablets
http://en.wikipedia.org/wiki/List_of_Nokia_products#Classic_series_.E2.80.93_The_Mobira_series#Classic_series_.E2.80.93_The_Mobira_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Classic_series_.E2.80.93_The_Mobira_series#Classic_series_.E2.80.93_The_Mobira_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Classic_series_.E2.80.93_The_Mobira_series#Classic_series_.E2.80.93_The_Mobira_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Classic_series_.E2.80.93_The_Mobira_series#Classic_series_.E2.80.93_The_Mobira_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Original_series#Original_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#1000.E2.80.939000_series#1000.E2.80.939000_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#1000.E2.80.939000_series#1000.E2.80.939000_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#1000.E2.80.939000_series#1000.E2.80.939000_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_2000_series_.E2.80.93_Basic_series#Nokia_2000_series_.E2.80.93_Basic_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_2000_series_.E2.80.93_Basic_series#Nokia_2000_series_.E2.80.93_Basic_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_2000_series_.E2.80.93_Basic_series#Nokia_2000_series_.E2.80.93_Basic_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_3000_series_.E2.80.93_Expression_series#Nokia_3000_series_.E2.80.93_Expression_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_3000_series_.E2.80.93_Expression_series#Nokia_3000_series_.E2.80.93_Expression_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_3000_series_.E2.80.93_Expression_series#Nokia_3000_series_.E2.80.93_Expression_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_5000_series_.E2.80.93_Active_series#Nokia_5000_series_.E2.80.93_Active_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_5000_series_.E2.80.93_Active_series#Nokia_5000_series_.E2.80.93_Active_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_5000_series_.E2.80.93_Active_series#Nokia_5000_series_.E2.80.93_Active_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_6000_series_.E2.80.93_Classic_Business_series#Nokia_6000_series_.E2.80.93_Classic_Business_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_6000_series_.E2.80.93_Classic_Business_series#Nokia_6000_series_.E2.80.93_Classic_Business_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_6000_series_.E2.80.93_Classic_Business_series#Nokia_6000_series_.E2.80.93_Classic_Business_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_7000_series_.E2.80.93_Fashion_and_Experimental_series#Nokia_7000_series_.E2.80.93_Fashion_and_Experimental_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_7000_series_.E2.80.93_Fashion_and_Experimental_series#Nokia_7000_series_.E2.80.93_Fashion_and_Experimental_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_7000_series_.E2.80.93_Fashion_and_Experimental_series#Nokia_7000_series_.E2.80.93_Fashion_and_Experimental_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_8000_series_.E2.80.93_Premium_series#Nokia_8000_series_.E2.80.93_Premium_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_8000_series_.E2.80.93_Premium_series#Nokia_8000_series_.E2.80.93_Premium_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_8000_series_.E2.80.93_Premium_series#Nokia_8000_series_.E2.80.93_Premium_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_9000_series_.E2.80.93_Communicator_series_.28discontinued.29#Nokia_9000_series_.E2.80.93_Communicator_series_.28discontinued.29http://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_9000_series_.E2.80.93_Communicator_series_.28discontinued.29#Nokia_9000_series_.E2.80.93_Communicator_series_.28discontinued.29http://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_9000_series_.E2.80.93_Communicator_series_.28discontinued.29#Nokia_9000_series_.E2.80.93_Communicator_series_.28discontinued.29http://en.wikipedia.org/wiki/List_of_Nokia_products#Special_function_phones#Special_function_phoneshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_Eseries_.E2.80.93_Enterprise_series#Nokia_Eseries_.E2.80.93_Enterprise_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_Eseries_.E2.80.93_Enterprise_series#Nokia_Eseries_.E2.80.93_Enterprise_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_Eseries_.E2.80.93_Enterprise_series#Nokia_Eseries_.E2.80.93_Enterprise_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_Nseries_.E2.80.93_Multimedia_Computer_series#Nokia_Nseries_.E2.80.93_Multimedia_Computer_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_Nseries_.E2.80.93_Multimedia_Computer_series#Nokia_Nseries_.E2.80.93_Multimedia_Computer_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_Nseries_.E2.80.93_Multimedia_Computer_series#Nokia_Nseries_.E2.80.93_Multimedia_Computer_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_N-Gage_.E2.80.93_Mobile_gaming_devices_.28discontinued.29#Nokia_N-Gage_.E2.80.93_Mobile_gaming_devices_.28discontinued.29http://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_N-Gage_.E2.80.93_Mobile_gaming_devices_.28discontinued.29#Nokia_N-Gage_.E2.80.93_Mobile_gaming_devices_.28discontinued.29http://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_N-Gage_.E2.80.93_Mobile_gaming_devices_.28discontinued.29#Nokia_N-Gage_.E2.80.93_Mobile_gaming_devices_.28discontinued.29http://en.wikipedia.org/wiki/List_of_Nokia_products#Vertu_.E2.80.93_Luxury_phones#Vertu_.E2.80.93_Luxury_phoneshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Vertu_.E2.80.93_Luxury_phones#Vertu_.E2.80.93_Luxury_phoneshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Vertu_.E2.80.93_Luxury_phones#Vertu_.E2.80.93_Luxury_phoneshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Cardphones_.28PCMCIA.29#Cardphones_.28PCMCIA.29http://en.wikipedia.org/wiki/List_of_Nokia_products#Concept_phones#Concept_phoneshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Other_products#Other_productshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Digital_television#Digital_televisionhttp://en.wikipedia.org/wiki/List_of_Nokia_products#ADSL_modems#ADSL_modemshttp://en.wikipedia.org/wiki/List_of_Nokia_products#WLAN_products#WLAN_productshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Telephone_switches#Telephone_switcheshttp://en.wikipedia.org/wiki/List_of_Nokia_products#GPS_products#GPS_productshttp://en.wikipedia.org/wiki/List_of_Nokia_products#TETRA#TETRAhttp://en.wikipedia.org/wiki/List_of_Nokia_products#Internet_tablets#Internet_tabletshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Internet_tablets#Internet_tabletshttp://en.wikipedia.org/wiki/List_of_Nokia_products#TETRA#TETRAhttp://en.wikipedia.org/wiki/List_of_Nokia_products#GPS_products#GPS_productshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Telephone_switches#Telephone_switcheshttp://en.wikipedia.org/wiki/List_of_Nokia_products#WLAN_products#WLAN_productshttp://en.wikipedia.org/wiki/List_of_Nokia_products#ADSL_modems#ADSL_modemshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Digital_television#Digital_televisionhttp://en.wikipedia.org/wiki/List_of_Nokia_products#Other_products#Other_productshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Concept_phones#Concept_phoneshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Cardphones_.28PCMCIA.29#Cardphones_.28PCMCIA.29http://en.wikipedia.org/wiki/List_of_Nokia_products#Vertu_.E2.80.93_Luxury_phones#Vertu_.E2.80.93_Luxury_phoneshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_N-Gage_.E2.80.93_Mobile_gaming_devices_.28discontinued.29#Nokia_N-Gage_.E2.80.93_Mobile_gaming_devices_.28discontinued.29http://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_Nseries_.E2.80.93_Multimedia_Computer_series#Nokia_Nseries_.E2.80.93_Multimedia_Computer_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_Eseries_.E2.80.93_Enterprise_series#Nokia_Eseries_.E2.80.93_Enterprise_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Special_function_phones#Special_function_phoneshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_9000_series_.E2.80.93_Communicator_series_.28discontinued.29#Nokia_9000_series_.E2.80.93_Communicator_series_.28discontinued.29http://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_8000_series_.E2.80.93_Premium_series#Nokia_8000_series_.E2.80.93_Premium_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_7000_series_.E2.80.93_Fashion_and_Experimental_series#Nokia_7000_series_.E2.80.93_Fashion_and_Experimental_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_6000_series_.E2.80.93_Classic_Business_series#Nokia_6000_series_.E2.80.93_Classic_Business_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_5000_series_.E2.80.93_Active_series#Nokia_5000_series_.E2.80.93_Active_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_3000_series_.E2.80.93_Expression_series#Nokia_3000_series_.E2.80.93_Expression_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Nokia_2000_series_.E2.80.93_Basic_series#Nokia_2000_series_.E2.80.93_Basic_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#1000.E2.80.939000_series#1000.E2.80.939000_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Original_series#Original_serieshttp://en.wikipedia.org/wiki/List_of_Nokia_products#Classic_series_.E2.80.93_The_Mobira_series#Classic_series_.E2.80.93_The_Mobira_series


15/26

14

Our target segment is heavy users

We chose this Category because heavy users have the ability to buy our product.

In this category users like latest products with latest features.

Heavy users want something new and stylish.

Target market for the Nokia mobile phone is between ages 20-40.

Who want to use Something Special

International Students

Teenager and Business class


16/26

15

RELATED AND SUPPORTING INDUSTRIES

Nokia Corporation (Nokia) is a manufacturer of mobile devices and mobile networks. Nokia

connects people to each other and the information that matters to them with mobile devices and

solutions for voice, data, and imaging, games, multimedia and business applications. The

Company also provides equipment, solutions and services for its operator and enterprise

customers. Effective January 1, 2004, Nokia reorganized its structure into four business groups:

Mobile Phones, Multimedia, Enterprise Solutions and Networks. During the year ended

December 31, 2004, Nokia announced a total of 36 new mobile devices in a wide variety of

designs and technologies for all segments and at all price points. Of the products launched, 34

had color screens and 23 were camera phones, including its first mega-pixel camera phone, the

Nokia 7610. In 2004, Nokia sold 10 million phones with integrated music players.

The company includes four business groups:

Mobile Phones

Multimedia

Enterprise Solutions and

Network.

Nokia also includes two horizontal groups that support the mobile device business groups:

Customer and Market Operations

Technology Platforms.

Nokia, the Finnish telecom giant is today one of the worlds most admired companies. Fortune

magazine1 has referred to Nokia as the least hierarchical big company in the world". Nokia

generates revenues of $19.9 billion and employs about 55,000 people. Its shares are listed on the

New York, Helsinki, Stockholm, London, Frankfurt and Paris stock exchanges. Networks deals

with data, video and voice network solutions. Mobile Phones are the clear global leader. Many

of the standard features of today's mobile phones, such as large graphic displays, signal and

battery indicators, colored covers and ringing tones were originally developed by Nokia.


17/26

16

Communication products include multimedia terminals for digital TV and interactive services

via satellite, cable and terrestrial networks.


18/26

17

FIRM STRATEGY, STRUCTURE AND RIVALRY

Group Executive Board

Olli-Pekka Kallasvuo

President and CEO of Nokia Corporation

Esko Aho

Executive Vice President, Corporate Relations and Responsibility

Robert Andersson

Executive Vice President, Devices Finance, Strategy and Sourcing

Simon Beresford-Wylie

Chief Executive Officer, Nokia Siemens Networks

Timo Ihamuotila

Executive Vice President, Sales

Hallstein Moerk

Executive Vice President, Human Resources

Richard A. Simonson

Executive Vice President, Chief Financial Officer

Anssi Vanjoki

Executive Vice President, Markets

Dr. Kai istm

Executive Vice President, Devices


19/26

18

Vision

Nokia is a consumer led company. There is a progressive and continuous increase in

consumer involvement with technology and communications globally. People are broadening

their modes of communication to include the web and, social networks are becoming central to

how people communicate.

People want to be truly connected, independent of time and place, in a way that is very personal

to them. And, Nokias promise is to connect people in new and better ways. Nokias strategy is

to build trusted consumer relationships by offering compelling and valued consumer solutions

that combine beautiful devices with context enriched services.

Objectives:

To set up a new brand image for Nokias mobile phone: Creative and Trendy

To meet the needs of the niche: Young and Rich customers who are pursuing stylish

lifestyle

To maximize current profit

To lead the mobile phone market with innovative and modern new products

The Global Cellular Mobile Industry:

The global mobile phone industry is based on many different manufacturers and operators. The

industry is based on advanced technology and many of the manufacturers are operating in

different industries, where they use their technological skills, distribution network, market

knowledge and brand name. Three large manufacturers of mobile phones are today dominating

the global mobile phone industry; Nokia, Eriksson and Motorola. In addition to these companies

there are many manufacturers that operate globally and locally. This report focuses on the

competition among these organizations.


20/26

19

Strategy

Wherever, whenever, we believer in communicating, sharing and in the awesome potential

of connecting the 2 billion who do, with the 4 billon who dont. At Nokia, customers remain

our top priority. Customer focus and consumer understanding must always drive our day-to-day

business behavior. Nokias priority is to be the most preferred partner to operators, retailers and

enterprises. Nokia will continue to be a growth company, and we will expand to new markets

and businesses. World leading productivity is critical for our future success. Our brand goal is

for Nokia to become the brand most loved by our customers.

In line with these priorities, Nokias business portfolio strategy focuses on five areas, with each

having long-term objectives:

- Create winning devices

- Embrace consumer Internet service

- Deliver enterprise solutions

- Build scale in networks

- Expand professional services

There are three strategic assets that Nokia will invest in and prioritize:

- Brand and design

- Customer engagement and fulfillment

- Technology and architecture

Organization

Nokia comprises four business groups: Mobile Phones, Multimedia, Enterprise Solutions and

Networks. Mobile Phones connects people by providing expanding mobile voice and data

capabilities across a wide range of mobile devices. We seek to put consumers first in our

product-creation process and primarily target high-volume category sales.

Multimedia brings connected mobile multimedia experiences to consumers in the form of

advanced mobile devices and applications. Our products give people the ability to create, access


21/26

20

and consume multimedia, as well as share their experiences with others through a range of radio

technologies.

Mobile Phone Market in India

NOKIAs hegemony in the GSM handset segment has increased during last six months.

NOKIAs market share (in terms of unit sold) has grown to 74% in March 06 from 61.5% in

October 05. In the colors segment too, Nokia has increased its market share to 55% in march 06

from 33.7% in march 05.In terms of value, Nokias overall market share has jumped to 70.5 % in

march 06 from 57.7% in October 05. In the colors phone category, its market share (in terms of

value) has increased to 59.3% in march 06 from 40.9% in October 05, according to ORG GFK

estimates.

Supply Chain

Nokia is committed to reducing the environmental impact of its business. It expects all Nokia

suppliers and their suppliers to take a similar approach. At Nokia, it believes in long-term

partnerships with suppliers who share our approach to ethical business. Together it works hard to

anticipate risk, demonstrate company values, enhance its governance practices, increase

employee satisfaction and look after the communities where it does business.

SWOT Analysis

Nokia is at an important crossroads in its history. Having architected many of the key

tenets for growth during the formative years of the mobile phone industry, the market with which

Nokia is so familiar may be adopting different rules, ones that it may not fully understand. The

situation Nokia faces may be similar to the period in the PC industry when Dell Computer

surpassed perennial leaders IBM, Hewlett-Packard and Compaq Computer. Why might this

happen? Because Nokia's strengths are so well-understood by its competitors, they are well-

targeted and improved upon. The wireless market's evolution has slowed, making it easier to


22/26


23/26

22

Threats

The market for color TVs and VCRs is a mature/saturated market; consumers are buying

less often and only to replace older units (same trend for all countries across Europe)

Cant differentiate based on technical advancement or price; competitors too fast to

match

Impact of recent purchases (for example, Sony) and mergers is unknown; competitors are

getting larger and integrating supply chains

Competitors (Samsung, Gold star, Daewoo) quickly and successfully building brand

name and image Branding Strategy In the color TV market, neither technology nor price

provides a competitive advantage. The decision a consumer makes to purchase is primarily

motivated by emotion, and is driven largely by comfort level with a particular brand. A

successful branding strategy for NCE is, therefore, critical to gaining a competitive advantage.

Specifically, NCE should brand for the following reasons:

Competitive advantage is gained through brand name (not technology or price)

According to brand awareness studies, Nokia is recognized most of the time (in

Germany, France, Italy, UK and Norway), but not necessarily affiliated with consumer

electronics such as TVs and VCRs

Consumers buy televisions based on emotion

Consumers perceive value in features that are marketed as user-friendly. In the past

Nokia has relied heavily on its ability to innovateit is a strong technology company.

However, it is not good at introducing or packaging this technology for consumers. It must

introduce a new mindset to NCE; a strategic shift that encourages customer service and

international marketing.

Internal Management Challenge faces at least two challenges within NCE that he must address

immediately:

1. Lack of a marketing champion in corporate headquarters

2. A continued reliance on technology as the main marketing approach. For example, the remote

control TV mouse is centered on technology and may frighten away potential customers who

may perceive it as too technical.


24/26

23

Options for solving these include:

Push down his ideas and force all to comply using his positional power.

Soft approachgradually getting buy-in to his plans from technical representative, sales

and marketing.

Option 1 is not viable since even though it may result in short-term agreement, it will result in

resignations, poor morale and distrust in senior management over the long run. Since the change

process can be slow, Nokia should adopt option 2 that means getting buy-in at the senior

management level.

Quality targets:

For Nokia to be number one in customer and consumer loyalty.

For Nokia to be number one in product leadership.

For Nokia to be number one in operational excellence.

Segmentation Strategy

Nokia Market Demographic

The profile for Nokia customer consists of the following geographic and demographic:

Geographic

Our immediate geographic target is rural India.

The total targeted population is estimated at 100 million.

Demographic

Male and female.

Ages 25-50, this is the segment that makes up 80% of the Nokia mobile phone market

according to the NOKIA India Ltd.

Professionals and College students.


25/26

24

Marketing Strategy

Today, the true killer data application is still text messaging, a typical example of person-

to-person communication. Other end-user services, however, have not taken off as expected in

recent years.

The primary reason for this slow take-up is that most of these services do not fulfill the

expectations of users. Although ring tones are one example of successful person-to-content

services, progress must be made for market take-up of other mobile data services such as:

Messaging (e.g., MMS and e-mail)

Entertainment (e.g., graphics, logos, games)

Information (e.g., directory services, news)

Marketing Objective

- Capture rural Indian market

-Target school student

- Attract Customers to New technology

- Enhance Distribution

- Maximize our revenues

- Maintain Customers Loyalty

Many Competitors in this area

Motorola

Sony Ericsson

Samsung

LG

Sharp

Panasonic.


26/26

CONCLUSION

Nokia currently still the no.1 in mobile industry

Its growth in profit not comparable to main competitor - Motorola

New series of phone: exquisite series

Target on wealthy young adults

To maintain leadership position and generate more profit to Nokia.

STRENGTH

-The Leader in the Industry

-Strong Financial Support for

Investment

-Strong R&D Unit

-Strong Customers Relation

OPPORTUNITIES

-Close cooperation with Suppliers andIntermediaries

-Tax Reduction

-New Demand Created From the

Advancement of Technology

WEAKNESS

-Lack of Innovation

-Human Resources Management

THREATS

-Keen and Strong Competitors

-Saturation in Current Market

-Challenges of Continuous

Technological Development
http://en.wikipedia.org/wiki/File:Nokian_logo.svghttp://en.wikipedia.org/wiki/File:Nokian_logo.svg

Documents

Assingment International Business