Emerging Markets Woes (A): Nokia in India and China
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Case Code: BSTR425 Case Length: 23 Pages Period: 2008-2012 Pub Date: 2013 Teaching Note: Not Available |
Price: Rs.500 Organization: Nokia Corporation Industry: Mobile Telecommunication Equipment Countries: Global; China; India Themes: Competition, Turnaround Strategy, International Management |
Abstract Case Intro 1 Case Intro 2 Excerpts
In June 2011, Nokia Corporation (Nokia) abandoned all hopes of meeting the targets that it had set a few weeks earlier. Even its strategy of teaming up with Microsoft - for Windows Phone software for its smartphones - was met with skepticism and its shares slumped 18%. The company blamed the difficult conditions in Europe and emerging markets India and China for these events. By 2012, though the company held on to its leadership position in India, it had lost a considerable portion of its market share. By the fourth quarter, Nokia was displaced from its number one position (by Samsung) in the global market as well as in the emerging market of China.
Earlier in 2009, Nokia's mobile phones had commanded a market share of 33% in China and around 60% in India. Moreover, in the emerging markets like India and China, Nokia had dominated the below US$50 priced phone segment, 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. The company also faced stiff competition at the higher-end - the smartphone segment - in the developed countries. The likes of the Apple iPhone and Blackberry were giving Nokia a tough time. Sandwiched between the two segments, its 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.
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