Nokia 5 Forces Analysis Essay

Submitted By sunsilk80
Words: 1774
Pages: 8
Open Document
Porter’s 5 forces analysis 



Pankaj Saharan
September 2012

Company Information
(1)


Over the past 150 years, Nokia has evolved from a small paper mill in south-western
Finland to a global telecommunications leader connecting over 1.3 billion people.



Nokia has disrupted into various industries before becoming a telecommunications giant from making rubber boots, car tyres, generated electricity, even manufactured
TVs etc.



Nokia’s own mobile phones’ platforms included Symbian (60 & 40), MeeGo (opensource Linux based platform) and Meltemi (low end Linux based platform)



Nokia announced a Broad Strategic Partnership with Microsoft to build a new Global
Mobile Ecosystem (with Windows Phone) in Feb 2011.



Currently, Nokia’s phones strategy focusses on Windows Phone platform (for
Smartphones) and Symbian 40 (for low-end feature phones segment).



Nokia has decided not to continue development of MeeGo and Meltemi along with divesting from long time cash-cow Symbain 60 devices.



Main competitors (mobile phone manufacturers) are Samsung (took over Nokia as global mobile phones market share leader in 1Q12), Apple, RIM, HTC.

Company Information
(2)
Organization Structure

© 2012 Nokia

Company Information
(3)
Net Sales

Operating Profit

Net sales per region

© 2012 Nokia

Market Share (YoY)

© arstechnica.com

Nokia’s Strategy
Key elements of Nokia’s strategy:
 build a new winning mobile ecosystem in partnership with Microsoft
 bring the next billion online in developing growth markets
 invest in next-generation disruptive technologies  increase our focus on speed, results and accountability © 2012 Nokia

Porter’s 5 Forces Model Analysis - NOKIA
HIGH

Barriers to
Entry

Rivalry between Competitors

Power of
Suppliers

MODERATE

HIGH

LOW

Threat of
Substitutes

Power of
Buyers

HIGH

Barriers to Entry - HIGH


Market entry as a global* mobile phone manufacturer is getting extremely tough because of various reasons.
Proprietary learning curve: Mobile phone manufacturing requires patents and proprietary knowledge.
Even leading mobile phone companies are currently engaged in battles over patent issues.



Brand identity and brand switching costs: Brand value is very important for mobile phones sales. E.g. reports have suggested that HTC which has produced very good devices with excellent hardware specs on top of Android mobile platfrom are struggling to even maintain the market share. It has been established that it is because of its diminishing brand value. Brand switching is not very predominant in the industry as a typical smartphone buyer tends to keep the phone for a considerable amount of time ranging from 1-3 years depending on many factors including country, age, profession, educational level etc.



Battle of Ecosystems: As described by Nokia’s CEO and many other industry analysts that today is the age of battle of ecosystems and not just mobile phones. So companies like Apple, Samsung and Nokia are considering smartphones business as part of overall mobile ecosystem consisting of software stack, operating system, applications, application store, 3rd party developers offering etc.



High expected retaliation: Global market share is currently captured by few leading players. There is expected high retaliation if a new device manufacturer tries to enter the market and poses a threat to capture the share.



High capital requirements and Economies of Scale: Differentiation factors among mobile phone devices are getting fewer which is requiring companies investing heavily in R&D costs, marketing spend, PR costs etc. Also, mobile phone production require quite much capital in place for factory establishment with quite many raw materials, R&D budget, supply channels etc.



Complex distribution channels: Most countries have operator specific ”Walled Garden” approach where operators are the key driver for mobile phone sales are giving mobile phones along with operator connections. Leading
Show More

Related Documents: Nokia 5 Forces Analysis Essay

Nokia Case Essay

Plan: Nokia | Group F4 | 905690745162235792279447892599 | | | | Contents 1. Introduction 3 2. Internal Analysis 3 2.1. Resource Analysis 3 2.1.1. Hierarchy of resources 4 2.1.2. Resource Portfolio 4 2.1.3. Core Competencies 5 2.1.4. Summary of Resource Analysis 5 2.2. Strategic Business Unit (SBU) Analysis 5 2.2.1. Identification of SBUs 6 2.2.2. Summary of SBU Analysis 6 2.3. Value Chain Analysis 7 2.3.1. Summary of Value Chain Analysis 8 2…

Words 10278 - Pages 42

Essay on Managing Strategic Change on Nokia’s High-End Smartphone Segment

4 Methodology 5 Research activities planned: 5 Research approach: 6 Research Design: 6 Research limitations: 6 Referencing 7 Report outline: 9 Timescale 10 Resources 11 Background The high-end Smartphone market segment has developed tremendously in the recent years. The beginning of this growth was marked by Apple introduction of its first iPhone, which has managed to change the whole industry . Since then technological companies like Samsung, LG, HTC and Nokia have strived to…

Words 1950 - Pages 8

Essay on Strategic Management; Apple and Nokia Case Analysis

Apple & Nokia Case Analysis 1. Table of Contents 1.0 EXECUTIVE SUMMARY OF APPLE AND NOKIA CASE 2 2.0 QUESTION 1 3 2.1 Competitive analysis of Apple and Nokia – who is stronger? 3 2.1.1 Competitive Analysis 3 2.1.1.1 SWOT Analysis 5 1.1.1 Strengths of Apple 6 2.1.1.2 Value Chain Analysis 9 2.1.1.3 Resourced Base View Tool 11 3.0 QUESTION 2 14 3.1 PESTEL analysis tool 15 3.2 Porter’s Five Forces 17 3.3 The…

Words 6157 - Pages 25

Essay nokia analysis

the next 3 to 5 years in terms of profitability and the level of competition? What implications does this industry analysis have for the industries/markets that the firm should be considering entering, exiting and/or otherwise changing its level of participation in? How will current rivals and potential new entrants in the industry / industries compete in the next 3 to 5 years? Which strategies are most likely to improve its absolute and/or relative performance in the next 3 to 5 years? Address…

Words 2413 - Pages 10

Mobile Phone and Nokia Essay

David Pollard Report Title Critically examine the rationale of the recently announced Nokia and Microsoft strategic partnership Presentation Deadline 13 April 2011 Student Name Gul Aliskan Hammad Hafeez Ufuk Can Cindioglu Umer Zia Zhenhua Ma Contents 1. Introduction-----------------------------------------------------------------------------------------------------3 2. Market analysis -----------------------------------------------------------------------------------------------4…

Words 4050 - Pages 17

Essay on Michael Porter

Michael Porter 5 Forces Porter's five forces of competitive position analysis is a simple framework for assessing and evaluating the competitive strength and position of a business organization that formed by Michael E. Porter of Harvard Business School in 1979. Basically, the concept of this theory is actually based on the five forces model that uses to determine the intensity of competition and market attractiveness. Therefore, strategic analysts are often to use Porter’s…

Words 1195 - Pages 5

Htc Analysis Essay

HTC’s CEO has asked you to help him by preparing an analysis that addresses the following: 1. Identifies and analyzes the industry and competitive environment of the mobile phone industry based on information contained in the case: HTC Corp. in 2009 including key industry and environmental trends, competitive and structural characteristics of the mobile phone industry. 2. Your assessment of the key challenges HTC faces in trying to achieve a sustainable model and long-term success in the…

Words 2449 - Pages 10

Essay on Nokia Analysis

Introduction: "Nokia - Connecting People": this slogan is known all over the world. In 2006 Nokia employs 68,041 people in 120 countries. Currently every third mobile phone sold in the world is from Nokia. The Nokia Company is today one of the world's leading high tech companies. Its rapidly growth in the 1990s coincided with a basal structural change of the Finnish economy and industry. In this restructuring process Nokia played an important role. Despite the fact that Nokia is a leading multinational…

Words 6428 - Pages 26

Smartphone and Blackberry Essay

STRATEGIC ANALYSIS BY: BLACKBERRY (RESEARCH IN MOTION) Blackberry is a brand that was created by Research in Motion's (RIM) Founder Mike Lazaridis in 1996, providing wireless web enabled devices across multiple networks. RIM is a Canadian based company founded in 1984 that formally worked with RAM and Ericsson, developing a two way paging system and wireless email network. - Geographic areas served: Worlwide - Main competitors; Apple Inc, Google Inc, Nokia, Samsung…

Words 1249 - Pages 5

Essay about Porter 5 Forces Analysis of Blackberry

available for new product innovations. - While brands differentiate between different Smartphones to an extent, Smartphones in the same price range have mostly the same functions. COMPETITIVE Rivalry: High/High/Medium - Huge Rivalry amongst Nokia, Apple, Google & Microsoft - low product differentiation - Apple and Samsung have captured more than 50% of the Smartphone market (Bernstein, 2012), and various other competitors are scrambling to increase their market share. High production costs…

Words 1054 - Pages 5