The main purpose of this report is to analyses the competitor of Nokia mobile phone. The report comprises main competitor of Nokia such as Samsung, LG and Motorola. Then the report discusses strengths, weaknesses, opportunities and threats of Nokia and Samsung. According to the analysis, this report will be helpful to Nokia to find out its advantages and disadvantages.
2.0 Introduction
Nokia Corporation was founded in 1865. A half-century later, it became the world’s largest communications equipment supplier. With experience, innovation, user-friendly and reliable solutions, Nokia has become the leading supplier of mobile phones, but also a leading supplier of mobile, fixed broadband and IP networks. In the mobile phone market, Nokia has for many years to occupy the market share in the first place. In 2009, shipment of Nokia was approximately 431.8 million. In second quarter of 2010, Nokia share was about 35.0% in the mobile device market, ahead of Samsung and Motorola’s, whose market shares were 20.6% and 8.6%; the first quarter of 2010 in the global smart phone market, Nokia’s share was 44.3% with the first place (M2PressWIRE,2010). In addition, it equipment in the communications network (GSM and WCDMA networks mainly) and mobile multimedia application development and other areas of strength are also at the leading place in the world, and can provide users with enterprise-class wireless connectivity solutions.
3.0 The three main competitors of Nokia Company
3.1Samsung Group
Samsung Group is South Korea’s largest conglomerates, including 26 affiliated companies and certain other corporate bodies, in nearly 70 countries and regions and nearly 300 corporate offices and employs 19.6 million people, business electronics, finance, mechanical, chemistry and other fields. Samsung Electronics ranked 59, No. 115 Samsung Corporation, Samsung Life No. 236 with entering the U.S. magazine “Fortune” Global 500 ranks. Samsung Group’s turnover in 2003 was about 96.5 billion U.S. dollars, brand value up to 10.85 billion U.S. dollars. Group’s flagship company – Samsung Electronics in 2003, “Business Week” IT hundred in the third, increasingly become the industry leader, its influence has gone beyond the traditional lot of the industry giants. Samsung has nearly 20 kinds of products in the world and the world market share of the first companies in the international market, highlights the prowess. Samsung Electronics, for example, the company’s annual Industrial Designers Society of American Industrial Design Award (Industrial Design Excellence Awards referred to as IDEA) in the selection won several awards for several consecutive years become the most awarded companies. This can prove that Samsung’s design capabilities have reached world class level (Moon Ihlwan; Engardio, Pete,2008).
3.2 LG Group
LG Group was founded in 1947, with annual sales of up to $ 73,000,000,000 (2006 data), now has 16 million people worldwide. The development of the world’s leading international industrial enterprise group. LG Group is currently in 171 countries and regions have established more than 300 overseas offices. Business areas covered chemical energy, electrical, electronic, mechanical metal, trade services, finance, and public welfare, sports and other six areas. The LG Group, LG Electronics is the largest subsidiary. LG Group has continued to challenge the endless fields of technology, and is committed to the development of new technologies. The development of scientific research and development is the focus of LG, but also strong backing of business development. LG Group set up 31 research centers in six countries in the world, research and development spending accounted for 5% of the Group’s total revenue. By overseas research institutions are being further strengthened by its own technical strength, LG Group in Chicago, San Fernando plug, San Diego, Sendai in Japan, both in Germany and Ireland in Dublin, SAF and other places of scientific research agencies are using highly sophisticated scientific equipment, and vigorously carry out the research activities for the realization of the early arrival of high-tech society and work.
3.3 Motorola Inc.
Motorola Inc., formerly known as Galvin Manufacturing Corporation, was founded in 1928. In1947, it changed its name to Motorola, from 1930, began as a trademark. It is one of the world’s global chip manufacturing telecommunications leaders.
Motorola is one of the world’s wealth hundred, with a global presence and impact, with 2006 sales of 42.8 billion U.S. dollars. Company’s three business groups are the Department of Enterprise Mobility Solutions, broadband and mobile network division, and Mobile Devices. As a veteran telecommunications giant, Motorola’s position in the communications industry, no doubt, Motorola invented the first mobile phone, Motorola has witnessed so far in the history of the mobile phone, the Motorola radio transponder to be used for the Apollo 11 spacecraft, Motorola radio’s position is unshakable, has been leading the industry leader, and became one of its most profitable business. Motorola has been guiding the progress of time, from the invention of the radio transponder, to the world’s first commercial mobile phone, the first GSM digital mobile phone, the first two-way pagers, the first smart-phone, the world’s first wireless router, and the famous Iridium plans and so on. Motorola is a written history of the company. In recent years, Motorola’s mobile phone business began to fall, leading the company into two (DATAMONITOR, 2011).
4.0 Comparing Nokia Corporation and Samsung Group
4.1 The reasons of choosing Samsung as the main competitor of Nokia
Nokia selected as the main rival Samsung, the reasons for the following areas:
First of all, Samsung and Nokia are the world’s two largest mobile phone manufacturers, who occupy the largest market share. Samsung’s market share was next only to Nokia.
Second, Samsung Group and Nokia Company are global multinational companies. In the enterprise organizational structure, business model, they have much in common.
Finally, Nokia mobile phone brands and Samsung mobile phones are well-known brand. Many customers prefer to buy time to compare these two products.
4.2 The comparison of the two companies
Prior to 1992, Nokia’s product line is very long, in addition to other mobile communications products, also produces TV sets, computers, wires and even shoes. In 1992, new president JormaOllila taking office, he introduced to mobile phones as the center of the professional development of new strategies. Under the leadership of the Ollila, Nokia’s implementation of the specific content of professional development includes three aspects. First, narrow the business scope, the paper, tires, cables, household appliances, such as business or to a minimum or sale of abandoned, stripped of the scale has been done in Europe was the second television production business, focus on telecommunications services; Secondly, the mobile pillar industry for the company telephone set to ensure that access to the world top three in the field and profitable growth; Finally, the search for and establish a new growth point as the core of nurturing corporate culture, making it the driving force behind Nokia and staff culture part of consciousness; also focused on 90% of the funds and manpower to enhance mobile communications equipment and multimedia technology research and development (Doz, Yves; Kosonen, Mikko,2008).
Nokia out of the diverse specialized financial strength is inadequate to support the period of old business development and new technology research and development difficulties, access to the production of mobile communications equipment necessary resources. Since 1996, Nokia rapid development in mobile communications, in 1998 produced the first 100 million mobile phones become the world’s largest mobile phone manufacturer.
According to Nokia’s performance report, Nokia’s fourth quarter 2010 sales of 12.65 billion euros, an increase of 6% growth in net profit despite the chain, but from 2009 to 950 million euros over the same period dropped to 7.45 billion euros. Market share is to fall further. The latest data released by IDC, Nokia is still the world’s largest mobile phone maker, the first quarter of 2011 the share of the global handset market was 29.2%, higher than the first quarter of 2010 increased 0.6%. IDC data show that in the first quarter, Nokia shipped 108.5 million units (Reinhardt,2011).
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South Korea’s Samsung Group is a six-year history, set of electronic, mechanical, chemical, financial and trade services as one of the group. Samsung Group is South Korea’s large group, is one of the world’s leading multinational corporations, the Samsung Group are currently about 267,000 employees in 66 countries the world. Samsung Group in 1997 amounted to 96.1 billion U.S. dollars of business. The electronic industry, 26.3 billion (27.4%), machinery industry 6.3 billion (6.5%), chemical industry 2.1 billion (2.2%), financial sector 26.2 billion (27.2%), trade and other sectors 35.2 billion U.S. dollars (36.7 %). Rivals, Samsung Electronics shipped 70 million handsets, a market share of 18.8% (Corporate IT Update (M2,2011).
5.0 Comparing brands of the Nokia mobile phone brands and Samsung mobile phone
5.1Strength
Nokia
Good quality, durable. Nokia mobile phones as a traditional leader, has been emphasizing its product function and quality of the past. Ease of use, good stability. Good carrier relationships and successful sales strategy low-end bundle. Good Distribution channel management and retail terminals. Nokia mobile phones part of the main channel sales strategy to outsourcing, the use of the channel’s competitive advantage, through the powerful combination to enhance their competitiveness. Before 2000, foreign brands have been relying solely on mobile phones nationwide dealer distribution model. In 2002, Nokia began to develop PD (provincial distribution platform) system to enhance the market coverage of the scattered villages and towns. Since 2003, Nokia began to take FD (direct control of the provincial distribution) channel model, based on the original, the realization of channels and the effective management of sales agents and information feedback (Masalin Leena,2003).
Nokia has accurate pricing strategy. Mobile phone manufacturers in the price of a basic strategy is to capture the market low, so low-end mobile phone market, price competition is fierce. Another performance in the pricing strategy is: the introduction of new products, if there are similar products on the market there, which take price strategy. Original Nokia 7610 mobile phone located in the high-end, when Motorola, Sony Ericsson launched megapixels of GPRS mobile phone, that is a substantial price reduction, re-positioned as a mid-range phone.
To the low end of its product-oriented structure and the mobile phone market, the actual fit. Nokia has a good product quality and brand image.
Samsung
Samsung looks beautiful. It has unique mobile phone design. Samsung mobile phones are more emphasis on changing the appearance of the perfect combination of utility functions within which sits on a large number of loyal consumers. Meanwhile, personal appearance and function of development, the Samsung phone also is spared, from the slide structure, ultra-thin structure, to the music multimedia capabilities and intelligent expansion, etc., Samsung always easy to deal with the challenges from competitors, retaining its own characteristics. Motorola is currently the highest in the world beyond the second position.
Quality is also good. Complete information on the official website. Supply chain management of digital production planning and control. R & D cycle is short. It has leading technology innovation projects and the key competitive advantage.
Samsung mobile phone has basically realized the coverage of all the mainstream channels. Third base is more concerned about the growing market in the third and fourth level.
5.2 Weakness
Nokia
Low cost. Nokia cell phone is always less functional and the price is high, but good sales. But with the development of mobile Internet, the market for cell phone manufacturers put forward higher requirements, which is particularly important innovation, it will be Nokia’s greatest test. Android and Symbian, the system is relatively backward in the application procedures, more and more cell phone manufacturers are adopting Android system, which no doubt the future of Nokia caused a lot of pressure.
The phones are bulky and heavy. This is a relative term, compared to not very obvious, but so far there is no ultra-thin ultra-compact Nokia mobile phone is the fact.
Appearance is more difficult than the single and look.
There are some quality problems with some phones.
Bad sound quality and picture resolution, the design does not look good
Sections of the mobile phone market have been an endless stream format
Samsung
The functions are too simple and easy to use and poor.
The average selling prices are falling.
R & D costs are relatively high and profit margins relative small.
It does not have too many suppliers and business.
Frequently use of “the world’s first” category of the advertisement can no longer confuse the public
5.3 Opportunities
Nokia
Low-end mobile phone market continues to expand, demand for low-cost mobile phone is increasing.
Samsung
As people’s living standards improve, people have higher requirements phone look fashion, beauty.
5.4 Threats
Nokia
In many countries such as China mobile phone market, the local small-scale mobile phone manufacturers are rapidly rising and expect to become Nokia’s new round of competition.
For Microsoft’s challenge to the mobile phone market, Nokia’s profits will be threatened.
The mobile phone market is more competitive.
Samsung
Many phone producers such as Nokia and Motorola have launched the acclaimed manufacturer of high-end products.
Though proximal period of time theï¶ importance of low-end market has been rising, Samsung has poor performance in the low-end market.
The mobile phone market is more competitive.
6.0 Conclusion
As competitors to imitate the strategy and organizational structure of Nokia, Nokia’s core competitive advantage is sustainable. First of all, as competitors are difficult to redefine the core business of the organization and implementation of strategies to change professional. For a wide range of competitors, this one focusing on mobile phone business, the company will inevitably lead to political, operational and corporate culture conflicts.
Second, competitors of Nokia are difficult to respond as quickly to changing market needs, while providing consumers with products from top to bottom. From simple low-end products to high-end or change the whole series is bound in the short term brand awareness among consumers is becoming blurred.
Again, competitors are difficult to re-create the core product, the technical innovation applied to the full range of products, from top to bottom to achieve the overall competitive advantage. For the competitors, in order to re-define the core product strategy, strategic thinking on the need for major changes, which may be encountered strong resistance. For example, Samsung is concerned, to achieve the star products from the pursuit of the strategic thinking of the full range of products to the pursuit of competitive advantage of strategic thinking is not easy.
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