nokia's strategy in india

8/13/2019 nokia's Strategy in India

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Case: Nokia's Strategy in India

One: Case Introduction

AbstractThis case describes the development and grows for Nokia in India market. Nokia,as a manufacture of mobile communication devices, was succeeded in administrating marketing

strategies in India markets. The reason is that Nokia delivers better products which cater to the

needs and preferences of Indian consumers.

Nokia - Made in India

In April 2005, Nokia India, a subsidiar of !inland"based Nokia, announced that it was

setting up a manufacturing facilit for mobile devices in #hennai, the state capital of Tamil Nadu

in southern India. Nokia planned to invest $%& '00"'50 million in the facilit, where the

production was e(pected to begin in the first half of 200).

*ekka Ala"*ietil+, *resident and ead of #ustomer - arket /perations, Nokia #orporation

said, 1stablishing a new factor in India is an important step in the continuous development of

our global manufacturing network.3India was ideal for Nokia4s new production facilit. 1ach

mobile handset has more than 300 parts and the average production capacit of each

manufacturing unit of Nokia is around 20 million units.

This level of manufacturing involves a total of billion components per annum, re6uiring

strong logistical support. Nokia4s manufacturing facilit needed to be located close to a ma7or

international airport or sea port for 6uick suppl of components. India met all these re6uirements,

and also en7oed cheap manpower costs and pro(imit to the rapidl growing Asia *acific

markets.8esides, Nokia was the market leader in mobile communication devices in India. The

compan has been carring out sales - marketing, customer care and research - development

activities in the countr. Nokia considers India to be one of its most important markets. The

compan4s #ode 9ivision ultiple Access :#9A;5facilit is located in umbai and provides

software and technical support to #9A consumers in India and other Asia *acific countries. In

2003, Nokia was chosen as


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policies of the Indian government, high licensing fees and absence of a proper telecom regulator

bod. The growth in the subscriber base of mobile phones remained sluggish initiall, reaching the

' million milestone in '@@. In '@@@, the overnment of India announced a new telecom polic.

This polic planned to provide telephones on demand b 2002.

Among other things, the polic allowed unrestricted private entr into almost all mobileservice sectors. The government allowed cellular mobile service providers to share infrastructure

with other operators. It also allowed e(isting operators to migrate from fi(ed license fee to one"

time entr fee with revenue sharing. This polic helped man private operators to break even

faster. 8 200', the demand for mobile services was growing well. The private companies

concentrated on providing basic telephone services to consumers. The number of mobile phones

crossed five million b 200' and doubled to '0 million in 2002...

About Nokia

Nokia was founded in ')5 b !redrik Idestam in !inland as a paper manufacturing compan.

In '@20, !innish Bubber Corks became a part of the compan, and later on in '@22, !innish #able

Corks 7oined them. All the three companies were merged in '@)D to form the Nokia roup.

In the late '@D0s, Nokia started taking an active interest in the power and electronics

businesses and b '@D, consumer electronics became Nokia4s ma7or business. Nokia created the

NT mobile phone standard in '@' and launched the first NT phone, obira #itman, in

'@D. The compan delivered the first % network to Badkilinia, a !innish compan in '@@',

and in '@@2, Nokia '0'' " a precursor for all Nokia4s current % phones " was introduced.

In the '@@0s, Nokia provided % services to @0 operators across the world. Another

significant move of the compan during this period was the divestment of its non"core operations

like IT. The compan focused on two core businesses " mobile phones and telecommunications

networks. 8etween '@@2 and '@@), the compan e(ited from the rubber and cable businesses aswell...

Nokia entered the Indian market in '@@3. The first ever % call in India was made on a

Nokia 2''0 mobile phone on its own network in '@@5. Chen Nokia entered India, the telecom

policies were not conducive to the growth of the mobile phone industr.

The tariffs levied on importing mobile phones were as high as 2DE, usage charges were at

Bs.') per minute and, at these high rates, consumers did not take to mobile phones. Nokia also

had to face tough competition from other powerful global plaers like otorola, %on, %iemens

and 1ricsson...

Nokia was 6uick to learn from its mistakes and adopted strategies to regain its lost market

share. loball, during the first 6uarter of 2005, the compan4s sales reached D.3 billion euros,

with the compan selling 53 million phones during the period. In India, Nokia continued its

leadership in % with a market share of D3E in arch 2005. Nokia also surpassed %amsung in

color mobiles in the % segment, recording a share of 55E in the same month :Befer Table FIII

for share of ma7or mobile phone brands in the % segment and their market shares;.

Nokia reorgani=ed itself at the global level in 2003. At this point, a multimedia division was

formed.

The division4s Indian operations concentrated on promoting the concept of high"end

telephones in smaller towns while going in for higher volumes in larger cities. The marketing

division of the compan concentrated on making distributors in small towns sell high"endproducts. Though, the distributors were skeptical to start with, b the end of 2003, the process was

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streamlined and the results started to show...

The Future Prospects

According to industr analsts, b 20'0, the mobile phones industr in India will be driven b

voice, multimedia and mobile services for organi=ations. The teledensit in India was estimated to

increase to '.2E b arch 200@, with mobile subscription rising to '3.DD million b that time.In man instances, the cell phone has become the onl basic telephone link of a

householdGenterprise in India, rather than a landline phone. It was turning out to be more

economical and efficient than fi(ed line telephones. %o, there was great scope for further

e(pansion with reduction in the cost of ownership...

To: !"planation o# e$ploying the case

%teaching purposeThe purpose of case analsis is to master how to make effective marketing strategies for

enterprises according to market surrounding in order to develop foreign markets.

&case discussion'Chat did Nokia make use of in this case?

2Ch did Nokia ac6uire a leading brand in mobile communication devices industr in

India?

$arketing theory and $ethods about case analysis'marketing strateg theor

2!ive *owers odel of Industr #ompetitive Analsis

Hanalsis methods of %C/T

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nokia's strategy in india

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