Emerging Nokia Case

2320 Words Jul 27th, 2013 10 Pages
1. Problem
Even though Nokia’s strategy in emerging markets has been successful –making the company the market leader in India and China with market shares of 60% and 40% respectively– the company’s position in the developed markets has been deteriorating. Nokia used to lead the mobile phone market in North America and Europe in the 90s and early 2000’s and now the company is losing share mainly to Apple, Samsung and RIM. At the end of 2009 market share in the US dropped from 33% in 2002 to 10%; in Europe revenue declined by 15% in 4Q2009 and it was pulled out of Japan. The question that rises is if Nokia should continue to operate in both developing and developed markets or select one over the other and what strategies the company
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However, new competitors are entering this industry in the developing markets by offering low-end products, such as Chinese manufacturer ZTE that is expanding internationally to Asian and Africa and other non-branded low-end product manufactures.
c) Threat of Substitute Products
The treat of substitute products is low. There are no direct substitutes for the mobiles phones; actually it’s the mobile phone the one that is a threat for other products, such as laptops, desktop PCs and fixed phones. Demand for mobile phones is growing faster than the products mentioned and in developing countries demand is increasing due to first time buyers.
d) Bargaining Power of Suppliers
Suppliers’ power is low. There are few global players and many suppliers want to be part of their business. Since mobile devices are having more components the number of suppliers is increasing. Nevertheless there are very few single source suppliers and it’s difficult for individual suppliers to apply pressure on manufacturers. Companies in this industry use multi-suppliers –and there are many to choose from- and this reduces their power.
e) Bargaining Power of Buyers
The power of buyers is high. Buyers have many brands to pick and on the high-end segment buyers are selective and demanding and are looking for status, innovation, high

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