4a-emergingnokia_grp4
TRANSCRIPT
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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
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Case Summary
Founded in 1865
with paper mills
Rubber
production(boots)
Electronic
products
Mobile
phones
Monopolistic markets led to inefficient fixed-lines
Low average disposable incomes
Limited access to computers led to mobile phone growth
Bidding models followed by the government
Pre-paid model more prevalent because of no credit requirement
Concept of reverse bundling in emerging markets
Patterns in emerging economies
Most efficient supply chain
Ovi stores which offered music, location etc.
Acquisition of Navteq Corp. for navigation purposes
First smartphone introduced by Nokia
3 distinct platforms for different price points
55% revenue from low-end markets
Nokias response to change
Growth of Nokia
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NorthAmerica
Europe
India
China
Africa
Latin America
Markets Markets
Apple, Palm,RIM, HTC,Motorola,
Sony Ericsson
Nokia, LG,Samsung
Market Leaders Market Leaders
Criteria Developed Markets Emerging Market
Disposable Income High Low
Mobile Penetration High LowTie ups with service
providers
Forward Bundling Reverse Bundling
Payment Plans Mostly Post-paid Mostly Pre-paid
Buying Pattern Mostly replacement Mostly new handsets
Nokias Market Share Low High
Developed Markets Emerging Markets
Industry Trends
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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 andpostponement of
customization to the later
stage
Price sensitive market
Focus on low cost &
specialized innovations likedust resistant keypad, FM,
flashlight etc
Loyal customer base to sustain
the basic phones market
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NOKIA in Emerging Market
Product tailored to local
conditionsNOKIA 1616
New Product Service
relevant to the market
Life tools
Nokia Money
Focused on making
product relevant to the
customer
Made for IndiaCampaign
Hindi Language SMS
campaign
Van Operations
Manufacturing facility at
each of the major
markets
Extensive distributionsystem
Extensive network of
customer service centers
Low Priced Phones
Redesigned logistics &production process for
price reduction
Very less price as
compared to developed
markets
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Reasons for Nokias loss in the developed
markets
No specific segment try to offer at all price points
Apple catering to needs of high end market
Samsungmiddle to high end
Lack of market focus
Apple has come with OS to integrate data, audio, musicand Internet in one device
Android from Google
Emergence of newoperating systems
Unable to tap the market by enhancing their smart phonecapabilities
Motorola, Samsung, LG & Sony Ericson emerged strong Blackberry with and Apple with iPhone
Increasing competition
from existing and newplayers
Focus on specific requirements for emerging technology
No functional changes in software
Failure inunderstanding
requirements
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I-R Grid
Global Standardization Strategy Transnational Strategy
International Strategy Localization Strategy
Pressures for Local Responsiveness
P
ressuref
orcostr
eductions
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I-R Grid
Pressures for Local Responsiveness
P
ressuref
orcostr
eductions
Global Standardization Strategy Transnational 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
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I-R Grid
Attempt to maximize local responsiveness
Chance for the local consumers to perceive it as adomestic company
Market low-end basic phones to emerging markets
Emerged marketsCater to the need of high-
end market
Emerging markets
Meet the need of low-end
markets
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Choice of Market
0
2000
4000
6000
8000
10000
12000
14000
16000
2004 2005 2006 2007 2008 2009
Operating Profits
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 2ndposition by the
same year
Year Operating Profits
20048374
20059237
200611130
2007 14554
20085362
20091331
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Choice of Market
Projection of sales in different regions
Looking at the projection of salesof 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 result of which
Nokia has to follow different
strategy
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Market Approaches
Enhanced and smart phones should befocussed
Since it is a replacement market
Will help them to understand latesttechnologies
Focus on services & 3rdparty applications
Developedmarkets
Basic and enhanced phones should befocussed
Price should be reduced based on thereduced supply chain cost
Offer enhanced phones at the price ofbasic phones
Developingmarkets
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Core Competencies
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THANK YOU!