Nokia’s Business Strategy in India

Case Study Abstract

The focus of this case study is the business strategy adopted by Nokia in the Indian Mobile devices market. This case study summarizes Nokia’s business strategies in India. Nokia has proven itself as one of the most recognized brands      Pic: A Nokia Dealer Store in India
in India in the past decade or so. This case also discusses in brief some of the marketing strategies of Nokia in India and examines how the Nokia brand has emerged.

This case study covers the following issues:

• Assess Nokia’s globalization strategies
• Examine and analyze the entry and expansion strategies of Nokia in India
• Analyze Nokia’s efforts to localize its practices in India market.

Nokia – Company Overview

Nokia Corporation (Nokia) is a global manufacturer of mobile devices headquartered in Espoo, Finland. Nokia operates through four business groups: Mobile Phones, Multimedia, Enterprise Solutions and Networks. In Q3 2007, Nokia sold over 111.7 million units worldwide, marking a 26 per cent, year-on-year growth. Nokia India had revenues of more than $3.5 billion in 2006…

Case Study Contents

1. Nokia – Company Overview
2. Company History
3. Nokia Timeline
4. Nokia in India
5. Locations and Subsidiaries
6. Mobile Devices Industry in India – Business Description
7. Restructuring
8. Distribution challenges – Getting to the Rural Market
9. Understanding the versatile Indian market
10. Nokia – Branding Strategy
11. SRK in Nokia ad campaign
12. Nokia India Recognitions and Awards
13. Related Reading
14. View sample pages of this case study

Case Study Keywords: Nokia in India, Mobile devices industry, Handsets, Cellular phones, Expansion and Entry Strategy, Business Strategy Case Study.

Additional Reading: Articles on Nokia

• Nokia to exit expensive Germany, move production to low cost countries
• Nokia’s Acquisition Strategy and Restructuring
• Nokia and its Growth Strategy in China
• Sony Ericsson Mobile Music Strategy not working
• Nokia India – Tapping the Rural Market
• Nokia’s Strategy in the Emerging Markets
• Nokia – A struggling market leader

Case Snippets/Updates:

Essence of Nokia India’s business strategy according to Nokia India’s Managing Director, Mr D Shivakumar (As quoted in “Nokia’s biz strategy to increase India market share” in 2009)

1. Do not underestimate competition
2. Do not rest on laurels
3. Be modest, flexible and open to change

5

Nokia and the Indian Market

• Nokia’s Entry in India: Nokia entered India in 1995.
• Third Largest Telecommunication Market: India ranks third globally after China and U.S. in terms of the largest telecommunication market.
• 500 million mobile subscribers in India: The Indian market is adding about 10 million users a month. Nokia sees the Indian market as a growth opportunity particularly in the country’s rural areas. Rural penetration in India is still very low at 13%. By 2010, Nokia estimates that there will be around 500 million mobile phone users in India as compared to 427 million. According to Standard Chartered Bank’s annual forecast, India will have signed up its 500 millionth mobile subscriber sometime in December 2009 or January 2010. So, it took India 12 years (from 1997 when the mobile revolution began) to grow from zero to 500 million subscribers. However, analysts estimate it will take only five years to add the next 500 million.
• Nokia’s market share in India: Nokia has more than half the share of India’s mobile handset market.
• Nokia’s manufacturing facilities in India: Nokia’s manufacturing facility in Chennai, Tamil Nadu (South India) exports half its production to more than 59 countries. Nokia has invested $250 million since its launch in 2006.
• Mobile Microfinance – In 2009, Nokia piloted a scheme in two Indian states where it sold handsets on a weekly installment of 100 rupees ($2) over 25 weeks. Nokia planned to rollout the microfinance offer in 12 Indian states.
• India not a low-end market segment – 81 percent of the India’s mobile users are in urban areas. Nokia anticipates such customers would drive demand for high-end phones.
• Increasing Competition from new mobile handset manufacturers’ entry into India: In one quarter of 2009 alone, twenty-seven new mobile handset manufacturers entered the Indian market to introduce entry-level models (and other models with features such as dual SIM cards and full QWERTY keyboard) for the price sensitive Indian consumer.
• Mobile handset sales in India: By year ended June 30, 2009, mobile handset sales in India was 100.9 million compared to 94.6 million, a year ago.
• Nokia’s strong distribution in India: In India, Nokia has 2 lakh retail outlets and 700 support centers across 400 cities and towns.
• Nokia’s competitors in India: Motorola, Sony Ericsson, Spice, MacroMaxx, Karbonn, Lava, Lemon, Oscar
• Nokia’s ‘Made for India’ phones: In 2000, Nokia introduced the Nokia 3210 with a Hindi menu. In 2003, Nokia launched the Nokia 1100, a first Made for India phone.
• India’s Most Trusted Brand: Nokia ranked as India’s topmost trusted brand in the The Economic Times-Brand Equity’s annual ‘Most Trusted Brands’ survey for 2010. In 2004, Nokia ranked 71 and moved to 44 in 2006 as India’s most trusted brand. In 2007, it ranked in the top ten at number 4. Nokia has since held the number one slot for three years consecutively.