Corporate Strategy Case Study

Nokia Exiting Low End Market in Japan: Betting on High End Vertu?

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Abstract:
With nearly 40% global market share, the Finnish multinational communications corporation Nokia is the world's biggest cellphone maker. Despite its undeniable market dominance worldwide, Nokia fared weak in Japan and failed miserably to increase its market share from 0.3%. Therefore, during 2008, it decided to exit from the fourth largest handset market in the world with all their regular device line up, and announced that the company will target the wealthy Japanese elite segment with its luxury model 'Vertu'. The case focuses on Nokia's strategic shift to depend on a high-end offering like Vertu to penetrate the highly competitive Japanese market. It discusses Nokia as the largest handset maker, the Japanese cellphone market scenario and Nokia's struggle to succeed in Japan.

Pedagogical Objectives:

• To understand the market dynamics of the Japanese mobile phone market.
• To analyse the strategic rationale of introducing a high-end product like Vertu in Japan.
• To the challenges ahead for Nokia.

Keywords : Japanese telecommunications sector; Finnish conglomerate Nokia; Expansion; Joint venture; 3G (third generation) mobile services; OEMs (original equipment manufacturers); Carriers; MVNO (mobile virtual network operators); Vertu; Smartphone; Symbian; MID (Mobile Internet Device)