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Case Title:

Nokia – Global Market Share 40%; US Market Share 10%: Competitive Strategies

Publication Year :  2010

Authors: Pradeepthi Bhimavarapu, Vara Vasanthi

Industry:  Mobile Telecommunications

Region: Global

Case Code: MM0054

Teaching Note: Available

Structured Assignment: Available


OR





Abstract:
In 2008, Nokia, the global leader in mobile handset manufacturing faced difficulties in capturing a sizeable market share in the US. Nokia’s profit margins reduced year after year in US since 2004. One often cited reason was its unwillingness to customise according to the preferences of the markets there. As the US telecommunication industry is one of the world’s biggest telecommunication markets, Nokia had to establish itself in this market to retain its global No.1 position. The case study outlines the US telecommunication industry structure and the obstacles Nokia faced in finding a foothold in this marketplace. It has grabbed a 40% global market share; but in the US it has been able to rake it up to just 10%. What possible steps should Nokia take to capture a sizeable portion of US market share? What challenges does it face? What prevents it from having a formidable market position in the US? Should it, succumbing to the market pressures (realities!), decide to customise its business model? What are the consequences if it does? For a company, which adopted a standardised business model across the world, what would be the consequences of altering it?

Pedagogical Objective:

  • To understand the evolution of mobile phones and the revolutionary trends in the mobile handset industry
  • To analyse the telecommunication industry’s standards and their impact on the industry and handset manufacturers
  • To analyse the structure of the US telecommunication industry and its relevance for handset manufacturers
  • To identify the reasons for Nokia’s failure in the US telecommunication industry and to debate on its strategic response.

Keywords : Nokia, Mobile Phones, Five Forces, Business Model, iPhone, 3G, Motorola, Value Chain, Convergence

Contents:

  • US Telecommunication Industry: Competition, Regulation and Profitability
  • Nokia in the US: A Business Model Rejig?

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