Porters five forces nokia in the us

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Porters five forces nokia in the us

Porter's Five Forces Model Source Nokia was founded over years ago in Finland, and since then has become a global organisation Porters five forces nokia in the us operates in over countries worldwide. The micro environment includes the internal factors that are affected by the customers, staff, shareholders and competitors.

Threat of new entrants: BBC News, The threat of new entrants into the mobile phone industry is very unlikely as the start up cost of entering into the market at a high level needs a lot of investments and time to be considered a respectable competitor of the already established organisations.

In conclusion the threat of new entrants is very low and not a factor which Nokia will have to worry about in the near future. Although Nokia rely on its suppliers to supply equipment for their advanced mobile phones there are actually a number of large equipment makers, which Nokia could switch to.

The software suppliers for their Smartphones are now Microsoft, who will have a very high bargaining power.

Porter's Five Forces Model

As the leading mobile phone company in the industry they are in a very strong position when bargaining with their suppliers. Nokia are in the position where they can bargain and negotiate with any mobile phone hardware maker because there is a high number of equipment suppliers that are readily available to them should their current suppliers attempt to bargain for more money with them.

On the other hand, Nokia have recently created an alliance with Microsoft for their software which would be considered a major coup for Nokia more than Microsoft. As a result, Microsoft will have a lot of power when negotiating a price and share because the deal is more beneficial to Nokia than Microsoft.

The power that customers have is rising because of the increasing number of choices in the mobile telecommunication industry. With a lot of the Nokia competitors all offering similar packages e. Many of the consumers will also be tied into long term contracts so switching from one handset to another will be difficult and expensive for the consumer, as a result they may not want to change until the contract is finished.

As Nokia do not have a direct store to sell to their consumers, intermediaries such as Carphone warehouse or network stores such as Orange also have other handsets readily available for the consumers, which makes it difficult for Nokia to have a direct impact on the selling of their handsets.

As a result this has created a very price sensitive market because consumers will always be on the lookout for the best deals.

Porters five forces nokia in the us

In conclusion, the buyers have a high amount of power because of the other handsets they can purchase instead of Nokia. On the other hand, it could be said that customers would be able to contact people through others types of media such as social networking websites, email and home telephones.

However, smart phones are capable of a lot of functions so there are many substitutes if the substitute focuses on one of the functions, e.

Threat of new entrants:

No other product has the ability to make phone calls, send messages, surf the web and many more in one device.

The idea of being in constant communication with someone at anytime and anywhere makes the mobile phone a very important device to people. On the other hand, a mobile phone can be dissected into the key function where there are substitutes for the functions, such as the camera function on a mobile phone can be substituted for a digital camera which can do a better job than the camera in a mobile phone.

In conclusion, the threat of a substitute product is very low due to the fact a mobile phone is no longer just for making calls but for all the other function as well are expected on all mobile phones.

So, the only real substitute is to buy all the functions of a mobile phone in the individual products which would not be plausible to carry all around on a person at the same time. Without mobile phones consumers would find it very difficult to replace, as it can offer so much to the consumers all in one device, no matter what the needs of the consumer are.

Consumers rely on mobile phones a lot and would not be able to find a substitute that has all the function of a mobile phone. Nokia rivals have moved to smart phones and androids while Nokia have only just recently released their first smart phones leaving them trailing their rivals such as Apple and HTC.

There is also very little differentiation between the competitors which means any new smart phones in the market, like Nokia Lumia, will find it difficult to tempt existing iphone and HTC customers to switch. In conclusion, competitive rivalry is very high and Nokia must be aware of the threat that competitors have on their business especially with the growing popularity of the Apple iphone and RIM blackberry.

A "Porter's Five Forces" Analysis of Nokia | ToughNickel

The competitive rivalry is the biggest threat to Nokia because in the Smartphone market they are considerably behind and to increase their market share will take a lot of work in a market where some of the biggest names in business operate in such as Apple and Sony.Overview.

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Nokia was founded over years ago in Finland, and since then has become a global organisation that operates in over countries worldwide and a market leader in mobile telecommunications.

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A "Porter's Five Forces" Analysis of Nokia | ToughNickel