Essay on Nokia's Failure
Nafiz Mostafa, ID: 0712071085 |
This paper seeks to analyze an underperforming company, its strategy, the reasons behind underperformance and suitable recommendations for strategic change. As case study Nokia Corporation has been chosen, which has lost its market leadership in the mobile phone industry in the past five years, although it had market leadership for decades.
In carrying out analysis of Nokia, this paper has critically scrutinized the mobile phone industry, the external environment and the internal dynamics of Nokia Corporation. Initially Mobile phone Industry analysis is carried out to determine that it belongs to the matured stage of the lifecycle and also to …show more content…
At present the mobile phone industry is at the mature stage of the Industry Life-Cycle; since the industry is nearly saturated as everyone today is using a mobile phone thus the numbers of potential customers available are narrowing. Demand for new mobile phone devices is created through replacement demand for new and innovative mobile phones. Owing to this the possibility of new entrants in the market is minimized, however in order to hold market share in this very competitive market, mobile phone manufacturers must continuously innovate and offer state of the art technology and value added services to react to consumer demand. (Economist, 2012)
* Porters Five Forces Analysis
* Bargaining Power of Consumers is high since the number of options and variations of mobile phones available in the market is high; hence switching costs are low. * Threat of New Entrants is low since the market has already reached its maturity stage and huge capital requirements, economies of scale, effective distribution channel, product differentiation capability, has to be there to sustain in the mobile phone industry. * Threat of Substitutes is low since mobile phones have become an indispensable tool and substitutes such as