Abstract

In 2009, Nokia’s mobile phones had commanded a market share of 33% in China and around 60% in India. Nokia dominated the below US$50 priced phone segment in the emerging markets, which formed a major chunk of the market. However, with the entry of local manufacturers offering phones with more features and at a cheaper price range – Nokia began losing its hold on these markets. By 2012, its market share in China had shrunk to 15% and in India to 23% – but it still stood No.1 in terms of market share in the Indian market. Nokia also faced stiff competition at the higher-end – the smartphone segment – in the developed countries. By early 2012, Nokia was displaced from its number one position (by Samsung) in the global market as well as in the emerging market of China. The slumping market share had become a major concern for the company and its CEO Stephen Elop (Elop) – in both developed and emerging economies. The company was more concerned about the emerging economies as it considered them to be its driver for future growth. The question before the management was how to arrest the erosion of its market share in these two key markets.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand key issues and challenges in operating in emerging markets like India and China.
• Understand the trends in the mobile phone market in the emerging economies of India and China and their market potential.
• Analyze the changing competitive landscape of mobile phone market in the emerging economies.
• Study the reason for Nokia’s slumping market share and the reasons are for the success of local mobile phone manufacturers
• Explore steps that Nokia should take to revive and restore its market share.

Keywords

Competition, Competitive strategy, Low cost competitors, Hyper competition, International Management, Turnaround strategy, Emerging markets, Mobile phone industry, China, India, Nokia