Nokia Case Study: Key point and guidelines for strategy development

Nokia Company Strengths Able to develop product rapidly p. 503-505 Established access to distribution channels through Consumer Division p. 504 Sells both handsets and in rastructure Alliances in !S "oint ventures #ith $itsui and %ansai in "apan p. 504 &#ns cellular phone manu acturer in !% '(echnophone) Strong gro#th in !S and Europe

Nokia Company Weaknesses *as to buy in components rom competitor+ $otorola and A( , ( -. 504 .o# brand a#areness+ thought to be "apanese Supplies components to competitors+ -hilips and A( , ( Small home mar/et

Competitors Motorola strengths $ar/et leader p. 505 $anu acture o in rastucture and components p. 505 0apid rene#al o technonogy 1road-based company e.g. in computers $ar/et share ocused there ore price oriented strategy Competence in mass production *igh 0 , D e2penditure .arge !S home mar/et

Motorola Weaknesses 0educing advantage o large home mar/et 3ot geared up or roaming agreements p. 504 5ea/ in consumer mar/eting $any agreements to supply components to competitors

Ericsson strengths 6n rastructure p. 504 0,D 6ntegrated global distribution

 -artnerships #ith Alcatel in 8rance and 3EC in "apan Some brand recognition Ericsson weaknesses 3umber 5 in the mar/et Small batch production Small home mar/et Japanese competitors strengths Strong brand names+ $atsuchita9 3EC E2perienced in large scale production .o# cost production :ood /no#ledge o consumer mar/eting .arge home mar/et .o# cost o capital;interest rates Comprehensive distribution in consumer electronics

Japanese competitors Weaknesses 3o products both hand sets and in rastructure Country factors Europe+ < standards but #ith roaming agreements 'big $ar/et) !S+ < standards9 one $otorola and the other S#edish 'big mar/et) &ther emerging mar/ets+ E Europe9 China9 Asia9 "apan Culture 3o serious di erences a ecting products buying 1ig technical di erences Consumer 3 segments or hand sets+ consumers9 business9 mobile data 3 product mar/ets+ handsets9 in rastructure9 components 4 month product li e cycle be ore discounting begins Costs! prices *igh development costs .o# handset manu acturing costs rom large scale production Strong price competition .ittle product di erentiation

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Key issues!pro"lems :ro#ing competition around price and technology 3eed or high level o 0,D and 3e# product development 3eed or cash to meet high cost o development .o# branding 6mportance o distribution .ac/ o product standardisation

Strategy 1uild around+ #ea/nesses '3o/ia=s and the competition=s) > 5hat must they do to stay on this mar/et's) i.e. a maintenance strategy increasing mar/et share through the mar/eting mi2 > 5hat must they do to gro# in this mare/t's) i.e. a growth strategy Capitalisng on the competitors= #ea/nesses and anticipating the competitors= responses i.e. a competitive strategy