Competitive Positioning Of Nokia

INTRODUCTION

Nokia Corporation is a brand for an international mobile phone manufacturing company. Nokia is one of the major dominant companies in the information technology industry, but as we all know, for any company to become a major dominant of the global share market i n any industry, it has to deal with the various challenging a business growth and these include government policies, changes in technology, competition from other competitors among other barriers. Hence in this case, the competitive position of Nokia Corporation shall be analyzed in terms of:-

Market Share

Nokia Corporation used to and is still one of the dominant company in the mobile phone manufacturing industry leader but recent statistics show that Nokia Corporation is constantly losing ground in terms of securing a big share of the market share and if this trends continues the way it is doing, soon another company will overtake Nokia Corporation in as the leader in the mobile phone manufacturing industry. For a fact, Nokia Corporation was not even listed in the Gartners recent report on market shares on mobile device. Even though the company is one of the major leader in the market share, They are still losing a large part of thei share market every year. (BBC website, 2007)

This has been greatly accounted for by the rise of a smaller “white box” company in the Asian continent. This company is fast eating in to the Nokia Corporation Asian and global share market as well. In terms of figures, Nokia Corporation sold 117,500,000 units as compared to the previous year where they managed to sell 113,000,000 units only. This thus means that Nokia Corporation holds a market share size of approximately 37%. This shows a decline of market share as compared to the same quarter in previous year by 8%. (Ewing, et al 2007)

Nokia Corporation Major Competitors

The major global competitors of Nokia Corporation for the global market share incude:-

White Box

Motorola Mobility Holdings

Samsung Electronics

Google

Apple Mobile Company

Sony Ericsson mobile company.

The major factors that make these competitors equally competitive for the market share is their low pricing, better marketing strategies, production of a wide range of products to chose from, and their continued innovation of technology and applications in the mobile phone industry which satisfy the mobile phone user requirements globally. (BBC website, 2007)

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Financial Stability

Nokia Corporation is one of the major brands having a 20 years history and having secured the largest portion of the market share in the mobile telephone industry of about 37%. This in turn suggests that the company is by far the most stable company financially since it controls over a third (1/3) of the global market share in the mobile telephone industry. This is quite a big percentage as compared to the other Nokia Corporation competitors who control 63% of the global market share in the mobile phone industry combined, (Ewing, et al 2007)

Commitment to Research

For over 20 years, Nokia Corporation has been leading and committed to the provision of various products to the Nokia Corporation users. These products are more user friendly as compared to other products from other mobile phone products from other mobile phone companies and support and services which can only come to reality after lengthy research in technological laboratories. Nokia has also made innovations on devices and even solutions for imaging. Nokia has also made major improvements on the games and applications section of their handsets. The company has also provided various solutions for various corporations and even network operators. This clearly shows commitment by Nokia Corporation to agility and research in the mobile phone industry. (Ewing, et al 2007)

Strengths and Weaknesses of Nokia Corporation

Nokia as a major global market share holder in the global market share has various advantages over its major competitors and these include:-

Production of a wide range of mobile gadgets and applications

Easy to use and user friendly mobile phone software

A strong market position

Diversified business portfolio

Production of good designs for their phones and devices.

Nokia also has major weaknesses and these include

Continued loss of ground on market share control

Lagging behind in terms of technological advances making products like the i-Phones superior.

(Laurent L. 2008)

Company statistics

Nokia is one of the world’s top phone selling company and this lead was strengthened in the year 2000. In this year shipments grew by 66% over 1999. The company’s success was also partly by a very strong half, in the year 2000, where 59% of its sales occurred. (BBC website, 2007)

Nokia’s net sales increased by 4% to 42.4 billion Euros in 2009. The Devices & Services net sales for the year 2010 increased by 5% to 29.1 billion Euros. Net sales of NAVTEQ increased 50% to EUR 1 002 million in 2010. The Net sales of Nokia-Siemens Networks increased by 1% to 12.7 billion Euros.

In the year 2010, Europe contributed to about 34% of Nokia’s net sales, Asia-Pacific 21% (22%), Greater China 18% (16%), Middle East & Africa 13% (14%), Latin America 9% (7%) and North America 5% (5%). The 10 markets in which Nokia generated the greatest net sales in 2010 were, as follows:- (BBC website, 2007)

China, India, Germany, Russia, the United States, Brazil, the United Kingdom, Spain, Italy and Indonesia, together representing approximately 52% of total net sales in 2010.

The following is a table showing the current market position on the company Nokia Corporation as compared to other competitors

COMPANY

% MARKET SHARE

Nokia

37%

Motorola

17%

Samsung

9.8%

Siemens

8.5%

Sony Ericsson

5.2%

(BBC website, 2007)

STRENGTHS AND WEAKNESSES

The company as discussed earlier has the major financial strength and for that reason has secured a much larger market share in the mobile telephone industry. Some of its major weaknesses are that the company is facing intense competition from its relentless competitors who keep eating upon nokias large market share, reducing it to unfavorable size for the company.

Nokia Corporation can effectively compete for the market share by continuously innovating and inventing new products for its customers worldwide. The company should also try and catch up with the ever changing and advances in technology providing new and better products for its customers at competitive prices. The company can also increase the number of applications and games and also improve the existing applications for mobile user’s satisfactions. For nokia to maintain its current market position, the company must cut down on their operating costs and improve their production efficiency which will hence reduce their product costs thus offering competitive pricing to the global market. (Ewing, et al 2007)

Nokia should also expand their global network and advertise their products thoroughly to supply the mobile users with adequate information on available products the company is offering.

The strategies that nokia can employ to improve their competitive position include:-

Reduce their operating costs thus reducing their final pricing of products

Acquiring of emerging mobile companies to help ease competition

Partnering with other IT companies to help improve their service delivery e.g. like that of yahoo and Microsoft

Continuous advertisements to inform the mobile users of updates, upgrades, newer versions of existing products and even introduction of new products.

The company can also improve on its marketing strategies so that their products reach all kinds of mobile users.

The company can also improve its competitive position by conducting surveys and listening to mobile users requirements so that the y can produce better products. (BBC website, 2007)

The Technology behind What Nokia Offers

Nokia uses the symbian mobile technology which normally resembles the working of a computer due to its high level of multitasking. Nokia also takes advantage of its touch screen technology in offering various phone models. For example the company has employed the use of touch screen technology in the making on Nokia 5800 touch screen mobile phone and many other phone models. This touch screen phone device does not need to use the finger only but can also use a tooth pick and even a stylus. (Laurent L. 2008)

Technology Advancement Plans

Nokia plans to advance its technology and also advance the companies technological approach by signing partnership deals with other IT companies such s that of Yahoo Company which allows nokia mobile users to access yahoo internet on their handsets. Nokia also plans to increase its storage space in its mobile phone gadgets to cater for the increasing user requirements In terms of storage space on the mobile phones(Ewing, et al 2007)

Nokia as a company compared to other mobile phone manufacturing companies in recent years has had a slow pace to meeting technological changes and but has done well in the business environment by securing deals with companies such as Microsoft and yahoo in trying to deliver better services to nokia mobile users. The CEO, Stephen Elop, admitted that they had to change faster (technologically) if they are to maintain the market share they are controlling in the global market. The various government policies that hinder the continued growth of the company are other countries high tax charges and high licensing fees and extreme controls by other countries where the company ventures. The company can try to persuade other countries to change the their governing policies such as high taxes and high licensing fee and also adequately control competition among competitors for its growth. (Laurent L. 2008)

CONCLUSION

Nokia Corporation is a brand for n international mobile phone manufacturing company. Nokia is one of the major dominant companies in the information technology industry and as seen, it must start strategizing in order to maintain the 37% market share it has in the mobile phone industry. Nokia unlike all its other competitors is financially stable and can use this to its advantage to improve on its advantage to gain even more on its current market share size. Hence nokias competitive position has been reluctant and more is to be done to raise it up again