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Nokia is based in Finland with operations in Europe, the Middle East, Africa, China, the Asia-Pacific, North America, and Latin America. In Quarter 3 of 2007, Nokia’s market share grew to 39%. Nokia will sell approximately 430 million handsets this year which is more volume than its competitors; Motorola, Samsung and Sony/Ericsson combined. Nokia’s revenue is projected to grow about 30% this year to $76 billion, with profits.1 From 2006 to 2007, Nokia increased mobile phone sales by 3% and more notably, they increased operating margins by 78%.2 Furthermore, Nokia is a progressive company. They have been around for 142 years and they continue to stay on the cutting edge. Nokia plans to create an internet services and software segment of its company in January 2008. The company has already purchased a map database, a phone/video sharing site called Twango and it already offers services in downloading music, navigation, email and games.3 Currently, Nokia has operations in four segments: Mobile Phones, Multimedia, Enterprise Solutions, and Networks. Within the mobile phone segment, Nokia sells mobile phones and devices based on GSM/EDGE, 3G/WCDMA, and CDMA cellular technologies.4 Nokia is the market leader in all of the fast growing markets including China, Southeast Asia and India. Furthermore, Nokia’s global sales and manufacturing
http://www.forbes.com/free_forbes/2007/1112/DONOTTOUCH048.html?partner=yahoomag http://www.nokia.com/link?cid=EDITORIAL_606557 3 http://www.forbes.com/free_forbes/2007/1112/DONOTTOUCH048.html?partner=yahoomag 4 http://finance.yahoo.com/q/pr?s=NOK
High margins. Nokia has expanded beyond large cities to the lesser developed markets. o Economies of scale Lower logistics costs than competitors. However. 38% of the global volume. Nokia’s sales have been lacking in the United States. direct coverage of 90% of Chinese market with offices in 80 plus locations. Nokia SWOT Analysis • Strengths o Experience – 142 year history o Wide product range o Distribution channels in developing markets For example. The following analysis will focus on Nokia’s performance in the global mobile phone segment. particularly what Nokia is doing well in the developing regions and what they are doing poorly in the United States.are so strong that their profit margins are wide and they are able to capture 80% of the industry's profit with only 38% of the volume. . Do it yourself manufacturing – manufactures 75% of its phones o Market share • Weaknesses Nokia accounts for half of the global smart phone market.
Loss of market share – dropped from 33% in 2002 to 10% in 2007. o Dilute brand by expanding into internet services. • Threats o Growth in handset models to slow from 21% experienced over the past few years to 10% in 2008.forbes. Tried to apply these phones to all regions. 5 6 http://www.com/free_forbes/2007/1112/DONOTTOUCH048.html?partner=yahoomag http://www. • Opportunities o Leverage low logistics costs to further decrease prices in volume market & increase profit margin overall. o Improve sales in the United States.6 o The Google phone will encourage new entrants and Nokia may have to compete with dozens of small firms instead of four large firms as it currently does. Integrate internet services with mobile phones to add value.5 Low level of Nokia phones stocked by carriers in the United States. Responsiveness/adaptability to customers’ needs. o Overpaying for web services.o Global standards & global phones.forbes.html?partner=yahoomag .com/free_forbes/2007/1112/DONOTTOUCH048. o Decrease in sales in the United States. Didn’t customize phones based on customers in each region. o Provide internet services to capture this growing market.
o Alienate the carriers. .