Case: Nokia's Strategy in India

One: Case Introduction Abstract This 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, 01stablishing a new factor in India is an important step in the continuous development of our global manufacturing network.23 India 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 5 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 en7o ed 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 carr ing out sales - marketing, customer care and research - development activities in the countr . Nokia considers India to be one of its most important markets. The compan 4s #ode 9ivision .ultiple Access :#9.A;5 facilit is located in .umbai and provides software and technical support to #9.A consumers in India and other Asia *acific countries. In 2003, Nokia was chosen as <the most respected consumer durables compan 4 b 8usinessworld). The maga=ine wrote, 0This !innish compan 4s debut at the top of the heap sa s two things. /ne, that its strategies " including ones like developing a phone specificall for India " are respected. 8ut, more importantl , Nokia4s win is also an endorsement of the importance of the ubi6uitous cell phone as a durable in toda 4s world. After all, unlike its competitors, most of which offer a slew of durables, Nokia is mostl a cell phone compan .2 In 2005, Nokia was recogni=ed as the <8rand of the >ear4b the #onfederation of Indian Industr , India4s ape( industr association. The compan was chosen for this award because of its high brand recall, well established distribution channels and being 4most preferred4 b the consumers. 1namored of Nokia4s success in the Indian market, ,arvard $niversit had invited Nokia India to talk on <,ow Nokia cracked open the Indian market?4 The Indian Mobile Phones Industry The mobile phones industr made a slow start in India in '@@5. %everal private pla ers who had entered the industr in '@@5 e(ited in the ne(t few ears due to the unfriendl telecom
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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 '@@5. In '@@@, the Aovernment 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 mobile service 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)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 Aroup. In the late '@D0s, Nokia started taking an active interest in the power and electronics businesses and b '@5D, consumer electronics became Nokia4s ma7or business. Nokia created the N.T mobile phone standard in '@5' and launched the first N.T phone, .obira #it man, in '@5D. The compan delivered the first A%. network to Badkilinia, a !innish compan in '@@', and in '@@2, Nokia '0'' " a precursor for all Nokia4s current A%. phones " was introduced. In the '@@0s, Nokia provided A%. 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 as well... Nokia entered the Indian market in '@@3. The first ever A%. 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 pla ers like .otorola, %on , %iemens and 1ricsson... Nokia was 6uick to learn from its mistakes and adopted strategies to regain its lost market share. Aloball , during the first 6uarter of 2005, the compan 4s sales reached D.3 billion euros, with the compan selling 53 million phones during the period. In India, Nokia continued its leadership in A%. with a market share of D3E in .arch 2005. Nokia also surpassed %amsung in color mobiles in the A%. segment, recording a share of 55E in the same month :Befer Table FIII for share of ma7or mobile phone brands in the A%. 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"end products. 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 anal sts, 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 '5.2E b .arch 200@, with mobile subscription rising to '35.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... T o: !"planation o# e$ploying the case % teaching purpose The purpose of case anal sis 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? 2 Ch 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 Anal sis Hanal sis methods of %C/T