Nokia: Fierce competition in the cell phone industry: Is it a risk for the leader?

Résumé du document

Nokia Corporation is a Finnish multinational communications corporation. They focus on the key growth areas of wired and wireless telecommunications. Nokia is currently the world's largest manufacturer of mobile telephones, with a global device market share of 38,6% in 3Q 2007. We will focus only on this activity. Nokia develops and lays-on networks and telecommunication equipment. Nokia is one of the major world-wide suppliers of networks GSM/GPRS/EDGE, and the first in Europe. Nokia also develops solutions linked to the Internet. In June 2006, Nokia (Network Business Group) and Siemens (AG's COM division) created a joint venture (Nokia Siemens Networks). It is a telecommunication solutions supplier. This partnership was created in order to fight against the merger Alcatel-Lucent and the acquisition of Ericsson by Marconi. First, Nokia develops new multimedia equipments and invests in start-ups specialized in mobile telephones. Then, the Enterprise Solutions division offers businesses and institutions a wide range of products and solutions, including enterprize grade mobile devices, underlying security infrastructure, software and services.

Extraits

[...] As a consequence, the competition became much tighter. On the other hand, Apple targets a more specific customer segment. Moreover, firms like Apple won't launch a large range of products and as a consequence represent a low force over existing brands Chinese products, competition on price These new entrants are followers that provide low price mobile phones. They start conquering western markets with a very aggressive trade policy. They put forward very low prices, thanks to economies on R&D. Concerning technology; these firms are still only followers. [...]

[...] Nokia: Fierce competition in the cell phone industry: Is it a risk for the leader? Fierce competition in the cell phone industry: Is it a risk for the leader? 1 Agenda 1. Intr oduction Nokia's activity . Market of the firm Exter nal analysis 2. PESTEL analysis Technological factors Economic Factors Environmental Sociocultural Factors Political Factors Legal Internal rivalry New entrants' threats: barriers Bargaining power Substitutes Conclusion Five competitive for ces Str ategic gr oups Oppor tunities and thr eats Inter nal analysis 6. [...]

[...] Moreover, Nokia has no particular competencies for other consumer electrics. As a consequence, even if it would be a great challenge, Nokia has better no risk to follow its competitor's strategy and focus on mobile phones. To conclude, according to us, Nokia should: Propose basic low cost products in both Eastern and Western markets, using another brand name, Propose specific products for old persons, either by purchasing an existing brand, or by using another brand name, Stay focus on the mobile phone industry and continue its efforts for innovation, as it is the core competency of the company Sources 12.1 Internet web sites www.nokia.com www.samsung.com www.sonyericsson.com www.motorola.com www.rfi.fr www.tns-sofres.com www.generation-nt.com www.clubic.com www.interbrand.com www.journaldunet.com www.linteraute.com www.lemarchedesseniors.com www.gsm-senior.com 12.2 Reports Report of the Working Group on the prospects of the telecommunications sector in France and Europe 1 The impact of Structural Funds on innovation and Lisbon objectives in general . [...]

[...] Thus, they create a real danger to the existing firms in the mobile phone market Bargaining power Among buyers Nokia, as other mobile phone manufacturers, doesn't sell its products directly to the user but: To phone operators (Bouygues Telecom, France Telecom, SFR), To distributors (Cora, Auchan, Carrefour), To retailers such as Phone Pratique, E-phone, etc, To traders, intermediaries for selling to small retailers. Multiplying ways to sell its products enables Nokia to limit the bargaining power of its buyers. Moreover, Nokia is the most famous and demanded brand in the mobile phone market. [...]

[...] We'll focus on rivalry of the market later. External analysis PESTEL analysis The main factors which play key roles in the firms in the mobile phone industry are: Firstly, as the sector is based on constant innovations, the technological factors have a huge role in this market. Secondly, the economic factors also play a relevant role in this industry: the mobile phone market in the developed countries is a matured one (people mainly purchase of renewal), whereas developing countries represent a potential market. [...]