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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!