Nokia Case Study

SWOT Analysis

Strengths

• Leading maker of mobile phones and largest vendor of telecom equipments on earth (Brand Name).

• Strong Research and Development team, and financial support.

• Strong home base due to competitive pressure, which drove down manufacturing costs and still staying at the leading edge.

• Not only to talk, but to do business as well (browse web, ecommerce transactions, control house hold heating, etc.)

• Efficient logistics chain that handles over 60 billion components a year.

• Heavy emphasis on designs and first to realize mobiles becoming fashion items.

• Leaders in handsets, and implementing GSM in Europe.

• Understanding the needs and the demand of customers and ready to adapt to the challenges.

• Cutting prices on certain handsets to reclaim the market share.

• The stumble gave the opportunity to introduce new designs to meet and exceed the expectations of the consumers (Nokia 1100 and 6230).

• Selling well with low end handsets in emerging markets such as, India, China, Russia and Latin America.

• Keeping the base close to the business entities (Wall Street firms).

Weaknesses

• Losing the edge in handset design has opened up space for competitors.

• Additional time taken in introducing new designs (RAZR V3 by Motorola).

• Failure to anticipate the demand for flip phones in North America and Asia.

• Was unable to capitalize the mid range consumers in Europe.

• Nokia became complacent and forgot to keep its real customers, the operators, happy.

• Untimely internal reorganization.

• Resistance to reorganize its logistics chain.

• Finland's major exports went to EU and Rest of the Europe, and Nokia being the major contributor to the Finland's exports, they did not focus on the needs of the consumers from the rest of the world.

Opportunities

• Understanding the needs of mid range consumers in Europe.

• Understanding the needs of producing operator specific handsets.

• Reorganizing the logistics chain to produce operator specific handsets.

• Fierce competition from existing competitors and emergence of new competitors.

• Short end product life time (paves way for innovation)

• In developing world, the subscriber growth is still healthy.

• Phones for business users are regarded as a particularly promising area.

• Geographic Features.

• Government stance on buying from the lowest cost suppliers.

• Introduction of first clamshell phones.

Threats

• Complacency.

• Mobile operators from Europe and USA striking deals with Asian handset vendors and contract manufacturer to provide their own handsets (Vodafone).

• Fierce competition from existing competitors and emergence of new competitors.

• Shortened product lifetimes.

• Stiff competition from competitors for Nokia's N-Gage hybrid gaming device and mobile phones.

• Competition between suppliers for 3G phones.

Q-1

Nokia is competing in Global Mobile phone Industry. The main competitors for Nokia are, Ericsson, Motorola, Samsung, LG, Sony Ericsson, and Siemens. The substitutes for cell phones are, post, email, pager, Wi-Fi phones (you could make free or cheap calls over the Internet using wireless access offered in many coffee shops, airports and homes)

Q-3 International Trade theories on Nokia's Success

(a) Porter Diamond Theory

New Market Entrants:

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