Emerging Markets Woes (B): Nokia in India and China

Emerging Markets Woes (B): Nokia in India and China
Case Code: BSTR426
Case Length: 10 Pages
Period: 2008-2012
Pub Date: 2013
Teaching Note: Not Available
Price: Rs.300
Organization: Nokia Corporation
Industry: Mobile Telecommunication Equipment
Countries: Global; China; India
Themes: Competition, Turnaround Strategy, International Management
Emerging Markets Woes (B): Nokia in India and China
Abstract Case Intro Excerpts

Nokia and its Problems in Emerging Markets

In June 2011, Nokia Corporation (Nokia) abandoned all hopes of meeting the targets that it had set a few weeks earlier. Even its strategy of teaming up with Microsoft - for Windows Phone software for its smartphones - was met with skepticism and its shares slumped 18%. The company blamed the difficult conditions in Europe and emerging markets India and China for these events. By 2012, though the company held on to its leadership position in India, it had lost a considerable portion of its market share. By the fourth quarter, Nokia was displaced from its number one position (by Samsung) in the global market as well as in the emerging market of China.

Earlier in 2009, Nokia's mobile phones had commanded a market share of 33% in China and around 60% in India. Moreover, in the emerging markets like India and China, Nokia had dominated the below US$50 priced phone segment, which formed a major chunk of the market. However, with the entry of local manufacturers offering phones with more features and at a cheaper price range - Nokia began losing its hold on these markets. By 2012, its market share in China had shrunk to 15% and in India to 23% - but it still stood No.1 in terms of market share in the Indian market. The company also faced stiff competition at the higher-end - the smartphone segment - in the developed countries. The likes of the Apple iPhone and Blackberry were giving Nokia a tough time. Sandwiched between the two segments, its slumping market share had become a major concern for the company and its CEO Stephen Elop (Elop) - in both developed and emerging economies. The company was more concerned about the emerging economies as it considered them to be its driver for future growth. Though the company had started fighting back since late 2009 by experimenting with various products and strategies in these emerging markets, it was not able to arrest the erosion of its market share.

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