Nokia in 2004: Losing the Grip


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:
Case Code : BSTA039 For delivery in electronic format: Rs. 500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges

Themes

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Case Length : 24 Pages
Period : 1865 - 2004
Organization : Nokia
Pub Date : 2004
Teaching Note : Not Available
Countries : Global
Industry : Communications

Abstract:

In early 2004, Nokia, the global leader in mobile phones, has seen its market share plunge from 36% in 2003 to 28%. This is the first time since 2001 that the company's market share has dipped below 30%. Nokia faces competition from consumer electronics manufacturers such as Sony, Nintendo, Dell and business device and solution providers such as Microsoft. Nokia's heavy bet on 'candy bar' models (non-folding design) has also been responsible for the decline in the market share. The demand for these models has shrunk in emerging markets such as Asia. There, rivals such as Motorola and Samsung have come up with new clamshell designs (flip-phones) which have proved to be instant hits with consumers.

As commoditisation intensifies and the bargaining power of network operators continues to increase, it looks as though Nokia might have to reduce prices, leading to lower margins in the future.

Contents:

  Page No.
Introduction 1
Background Note 2
The Mobile Phones Industry 5
Nokia's Business 6
Operations 11
R&D 12
The Road Ahead 13
Exhibits -

Keywords:

Nokia, Samsung, Motorola, LG Electronics, Mobile phones, Losing market share, N-Gage, N-Gage QD, Restructuring, Clamshell, Flip phones, Design, Strategy, Trouble at Nokia

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