Nokia Strategy in Mobile Handset Industry - Assignment Example

The mobile handset industry has traditionally been enjoying healthy margins. Though there was a surge in the market demand in 2004, the growth was projected to decline from 2008. The Middle East, South East Asia, Africa, China, and India presented the new growth markets. The market was one of rising costs, reduced prices, high competition, and low-cost models.The average selling prices were down by a whopping 35% and there was a clamor for cheaper models in emerging economies and developing markets.

The basic phones were available for $ 50, with low-end models being available for as low as $ 25, and even $ 10.Multinational set up operations and set new standards for wages, training, and technology transfer. An environment of meritocracy was being created and hard work, ethical behavior, and a desire to learn were the watchwords.The fall of the iron curtain in Europe and the transition of State Societies opened up new markets for Western Europe. Eastern Europe was expected to move towards 100% penetration levels in 2011, from the current 85%.

The manufacturing process was being off-shored to low-cost countries, lately Eastern Europe. Labor costs much lower in Central European Countries than in other Western European Nations. Additionally, they also offered huge advantages in terms of high productivity and simple taxes. However, of late, wage costs were on the rise and the labor force was beginning to shrink with people migrating to richer European nations like Britain and Germany.There are three levels of strategy – Corporate Strategy, Business Strategy, and Functional Strategy.

Corporate strategy deals with the vision and mission of an organization. The Mission of Nokia is “Connecting people”. Its strategic intention is to “Build great mobile products”.The word “Nokia” is named after the Nokia River in Southern Finland. Beginning as early as 1865 and with a rich history of a century and a half of the innovation, Nokia transformed itself from a riverside paper mill in Southern Finland to a global telecommunications leader. A conglomerate of paper, rubber, cable, and electrical companies, it was only in 1996 that Nokia turned its focus on the telecommunications business.