In 1997 – 20 Million Units In 2001 – 140 Million Units #1 Producer of Cell Phones in Sales and in Market Share Ahead of Motorola, Siemans and Samsung
Company Locations Employees Customers Competitors Information Technology *Venturing * Website* E-learning
Nokia Largest mobile phone manufacturer & the top suppliers Has mobile telephones to T.V. set top boxes and internet software and services Involved in home networking and mobile displays
SWOT STRENGTH –Product development –Market leadership –Strong brand –Lost cost production
SWOT WEAKNESS –Lost market share –Nokia networks –Enterprise sector and Nokia ventures –Wireless handset performance
SWOT OPPORTUNITIES –China and the Asia-Pacific region –Market growth –New technologies –Enterprise market
SWOT THREAT –Strong competition –Market saturation in Europe –Microsoft –Virus
Porter’s 5 Forces Analysis
Threat of New Entrants – Nokia has many rivals who wants to: Steal customers & market share –If Nokia doesn’t develop new innovation Rivals will steal customer & market share
Cont’d A few factors that can limit the threat of new entrants in the industry includes: –Existing loyalty to major brands –Incentives for using a particular buyer E.g. frequent shopper programs –High fixed costs –Scarcity of resources –High costs of switching companies –Government restrictions or legislation
Power of Suppliers Nokia’s suppliers located everywhere –Europe –Latin America –Asia Vital to stay ahead of competitors and to take control of suppliers ahead of time
Cont’d Suppliers have more power if: –There are very few suppliers of a particular product –There are no substitutes –Switching to another product is very costly –The product is extremely vital to the buyer, they can do without it –The supplying industry has a higher profitability than the buying industry
Cont’d Fortunately, Nokia has suppliers worldwide. If one suppliers cannot perform or if the price is high, they have a backup plan
Power of Buyers Nokia’s consumer are loyal customer who support and buy their product Company has established international presence with brand awareness The company brand helps the company to increase sales by allowing customers the freedom to purchase products from manufacturers
Cont’d Nokia’s consumer could place much pressure on the company if one customer has a large enough impact to affect a company’s margins and volumes, then they hold substantial power
Cont’d. A few of these key points that customers might have power are: –Small number of buyers –Purchases of large volumes –Switching to another product is simple –The product is not extremely vital to the buyer, they can do without it for a period of time –Customers are price sensitive
Cont’d it is vital for Nokia to keep the consumers satisfied by providing new innovation with low-cost pricing This is important for the company because customers are the key reason to generate profit.
Availability of substitutes Nokia is creating new mobile telecommunications and network infrastructure company is always developing new mobile phone, network, and venture to help them stay ahead of their rivals
Cont’d The products and services provided by Nokia include: –mobile phone handsets –network infrastructure products –broadband access –multimedia devices –enterprise solutions –venture services
Cont’d According to Porter’s competitive forces, availability of substitutes, he stated that someone will switch if: –If the cost of switching is low
Cont’d 2 Factors that can affect the threat of substitute include: –the main issue is the similarity of substitutes – if substitutes are similar, then it can be viewed in the same light as new entrant it is extremely vital for Nokia to make their product differentiate from their competitors
Competitive rivalry Nokia does not have anything to distinguish them from their rivals; the company is in huge trouble Porter’s competitive forces, competitive rivalry, he describes competitive rivalry as the intensity of competition between existing firms in an industry
Cont’d Three of the reasons why a highly competitive market might arise are: –many players of about the same size, no dominant firm –little differentiation between competitors products and services –a mature industry with very little growth
Cont’d Fortunately, Nokia are always coming up with new ideas and new innovations to differentiate themselves On top of that, the company is enforcing low-cost pricing with high quality mobile telecommunications
Nokia Corporation Company’s Challenge and Opportunity
Corporate Cultural Corporate Cultural: Nokia’s one of the most important business strategies and competitive advantage. Nokia’s Motto: - Interpersonal skills: Important and are use as a hiring guide line for the corporate.
- Cultural & Values: Unique corporate culture emphasizes and values product innovation, customer satisfaction and employees motivated by high levels of trust independence and opportunities for personal and professional enrichment. - Cultural: ** Promotes intervention ** Expected people to come up with their own views and fight for their views. ** Show high respect for individuals who take risks and are not afraid to admit mistakes. ** Admire for people for being humble, regardless of how great their accomplishments are.
Nokia Core Value Customer Orientation: Seeing customer as the basis of all Nokia activities Respect for the individual: Treating employees, business partners and customers with respect. Achievement: Working toward and well-defined common goal and strategy. Continuous Learning: Constantly looking for ways to improve performance and having the courage to pursue new ideas.
Strengths Brand as a asset: Brand is associated with well-designed, high quality and technologically advance products and customer- services and user-friendly. Strong Product offering: ** Goes beyond voice-centric mobile phones ** Include entirely new functional categories of mobile devices, such as enhanced communicators, entertainment and gaming devices and media and imaging phones.
Advanced Technology: ** Nokia is a frontrunner in developing leading technologies with approximate 39% workforce employed in the area of research and development. ** Nearly 80% research and development achievements are reflected in the strength of registered and filed patent portfolio. Excellent in execution: Experience, efficiency and skill in execution and in managing demand-supply chain to deliver new ideas and technologies in product form at the right time, and in sufficient volumes.