Nokia Porter Five Forces

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Nokia Smartphone Porter’s Five Forces analysis Threat of Rivalry: High Because there is not much differentiation in smartphone product features, there is a relatively equal market share among several key competitors in this industry. At the same time, customers expect rapid improvement of products and technology, and this requires innovation and much research and development effort. All this issues make the threat of rivalry very high in this industry. Apple has only 18.7% market share in this industry, but it is just one product that contributes this much market share. The one-product strategy lacks the choice for customers, but save large amount on research and development and quality control. Meanwhile, the unique operating system and the huge resource of applications tend to drive up the market share of Apple. RIM is an early mover in this industry, so their 14% market share consists of some early customers that are loyal to their products. Their product, Blackberry, has relationship with almost every telecommunication carrier in the world. Nokia tend not to have contract plan with telecommunication carriers, which makes it easier to switch to other products. Nokia’s market dropped from 38% last year, http://www.topdvdtoiphone.com/blog/2011/05/06/apple-has-18-7-market-share-in-smart-phone/ http://www.telecomlead.com/inner-page-details.php?id=290&block Threat of New entry: Low The large capital requirement of start-up cost on research and development limits the entry to this industry. Once comes in the industry, a company will have high switch cost to shift to another industry, because it will involve changing of product line and R&D team. Since the fix cost of the production will be very high, this industry needs economies of scale to maximum profit margin. Other than capitals, rapidly upgraded technology and innovation requires skilled

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