Nokia is Finland's largest company and account for almost more than 1/3 of the market capitalization of Helsinki Stock Exchange( currently 225Mn Euros). Even after the changing dynamics of business, Nokia is one of the world's most recognizable brands. It is considered to have been a King of Kings in the global multi billion mobile phone industry. But as the business history is full of companies falling from the pinnacle of glory to the ashes, similarly Nokia's shrinking market in US, China and India is being assumed as the inklings of the same.
Nokia had started its operations in India in 1995 and has offices in 7 cities in India. The reasons of success of Nokia in India are:
1- The first mover's advantage backed by huge investments in India.
2- The strong distribution network comprising partnership with HCL and also its own distribution efforts in the form of Nokia concept stores.
3- Effective brand building exercise leading to strong brand recall and catering to different segments of population in India.
4- Indianization approach also borne fruits for Nokia in India where it has come up with the handsets and strategies unique to India.For example: Torch in the mobile phone( Large no. of rural population don't have electricity and power cuts are frequent).
The customer expectations were changing and so were the mobile handset companies coming up with innovative ideas like:
1- Dual sim handsets- Micromax , Samsung
2- Longer battery life- Micromax's first model came with 30 days battery backup
3- Added functionality like universal remote for TV and AC- Micromax
4- Phone powered by solar energy- Samsung Marine
5- Interesting features- Spice mobile's ultra violet torch that would help to detect counterfiet currency
6- Touch phones- iPhone, Blachberry, Samsung
etc.... Nokia did not anticipate that ignoring the above mentioned emerging trends may cost it big. It focused on high margin market only while giving a deaf ear to the noises madeby Micromax, Karbonn and Lava in the value for money market.
SWOT analysis of Nokia
Strengths Weaknesses
- Forte is technology - Laggard in forecasting the changing market dynamics
- Strong brand name and brand recall - Not many alliances with operators
- Own manufacturing network in India
Opportunities Threats
- Rural India: huge market - Competition from domestic low cost brands
- Smart phones market - Urban Indian market is becoming saturated
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