Emerging Markets Woes (B): Nokia in India and China
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Case Code: BSTR426 Case Length: 10 Pages Period: 2008-2012 Pub Date: 2013 Teaching Note: Not Available |
Price: Rs.300 Organization: Nokia Corporation Industry: Mobile Telecommunication Equipment Countries: Global; China; India Themes: Competition, Turnaround Strategy, International Management |
Abstract Case Intro Excerpts
Excerpts
Nokia and its Problems in Emerging Markets
Nokia, the world's largest mobile phone manufacturer, had a leading brand presence globally and had expanded into many areas to support customer needs and the growth of the telecommunications industry. By mid-2011, the company was engaged in the production of mobile devices and in converging internet and communications industries, with over 132,000 employees in 120 countries. The major contribution to its sales came from the European region. However, China as a single entity contributed the most, with its share alone being 30% among the top-10 contributors of revenue for the company. By the year-end 2011, Nokia products were being sold in more than 150 countries with global annual revenue of over € 38 billion with its Devices and Services segment contributing around 61% of the group's revenue...
Nokia's Fightback
Since 2009, Nokia had been fighting to retain its top spot in both India and China and fend off competition from local handset brands and no-brands as well as high-end phone manufacturers. It started by defending its position by introducing handsets at cheaper prices in these emerging markets. In October 2009, the company launched a smartphone at more affordable prices than ever before, in China. The cheaper smartphone, the Nokia 6788, was the company's first device developed for the TD-SCDMA - China's domestic 3G standard. The phone featured the Symbian S60 platform and had a five megapixel camera. It allowed any software developer to write applications for the handset. The company planned to introduce more affordable TD-SCDMA handsets for the Chinese market....
Road Ahead
The global mobile handset industry was valued at $133 billion in 2009 and Business Insights forecast that the industry would grow at a CAGR of 17.1% during the period 2009–14 to reach $293 billion by 2014. It also mentioned that the growth would be driven by smartphones coming from the Asia-Pacific region. The forecast also mentioned that the Asia-Pacific market was forecast to grow at a CAGR of 10.4% during 2009-14, largely driven by surging demand in India and China. Forecasts concerning India said that the mobile market was expected to touch 1.159 billion subscribers by the end of 2013 and the industry was expected to reach Rs 3,449.21 billion (US$ 73.47 billion) by 2012 (at CAGR of 26%) driven by the 3G market, which was expected to be good for the growth of international players like Nokia...
Exhibits
Exhibit I: Nokia Financial Data (2007-2011)
Exhibit II: Nokia Segment-wise Net Sales (2011)
Exhibit III: Nokia's 10 Major Market Sales (2011)
Exhibit IV: Competition to Nokia
Exhibit V: Nokia Under Elop
Exhibit VI: Five Major Problems of Nokia
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