• NOKIA AND PORTER'S FIVE FORCES

    Pages: 5

    This 5-page paper examines Porter's concept of five forces as it pertains to the competition in the wireless industry; most notably, Nokia, manufacturer of mobile phones. The paper demonstrates how forces such as threat of new entrants, threat of substitute products, bargaining power of suppliers, competitive rivalry and bargaining power of the buyer apply to Nokia. Bibliography lists 2 sources,

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    international level. One of the these theories is Porters five forces of competition. In postulating this theory, sociologist Porter defines his five sources as 1) threat of new  entrants; 2) threat of substitute products; 3) bargaining power suppliers; 4) bargaining power of the buyer and finally, 5) competitive rivalry. It is  interesting to compare Porters five forces in an industry as competitive as a wireless industry; more specifically the mobile phone industry. In this paper, we will attempt to outline  Porters theories as they pertain to Nokia Corporation, which is the worlds No. 1 mobile phone maker. First, a brief background about Nokia.  Nokia is ahead of competitors Motorola, Sony Ericsson and Siemens on the mobile phone front (Hoovers Company Profiles, 2002). Based in Finland, Nokias goal is to become the leader  in the third generation of wireless network equipment (Hoovers Company Profiles, 2002). Although Nokia is far ahead of its rivals in the Europe market for global communications, sales of Nokia  phones are lagging in the U.S. market, where the providers and carriers adopt Qualcomms CDMA standards (Hoovers Company Profiles, 2002). In addition to  threats from currently existing competition, Nokia faces increasing threats from competition that hasnt even entered the market as yet. Added to this, is that Nokia itself is getting into  a new area -- wireless application protocol (WAP). For one thing, Nokia is beginning to branch into Internet services; an area in which software giant Microsoft is strong. This  has meant the convergence of mobile phones and computers, meaning that the giants of two industries are in direct competition (The Economist, 2002). 

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