Nokia\'s Internal Factors Make it

Nokia's internal factors make it challenging for the company to compete today. They have focused on emerging markets, which means that they have a strength in low-end innovation. Nokia has an extensive supply chain, which can help it to meet market requirements. In addition, it has the early adopter Symbian mobile operating system. Nokia has a weakness, however, in that it has only a limited presence in North America, and is behind the curve in terms of technology. The company's supply chain also might be cluttered -- organized well it can be a powerful force but organized poorly it can be a real problem.

The company has some ideas that it can work with to help boost its market share. Again, most of these are oriented towards emerging markets. The Obopay, for example, is a payment system that can appeal to consumers. In the West, however, PayPal already has substantial market share. Another new service initiative is Life Tools, an education service geared to Indian customers. The company's experience in emerging markets like India is good for the future.

A weakness, however, is that marketing firms are taking the customers away from Nokia. If the marketing firms -- Bharti Airtel is one -- are able to control the customers, this gives them bargaining power over the handset suppliers. For Nokia, brand loyalty is reduced (loyalty is to Bharti) and the company becomes almost an OEM, selling handsets but without anywhere near the brand loyalty as the provider or the operating system has. This is a disadvantage that Nokia faces.

Nokia believes that it is an adaptable firm, and it needs to be. The company's emerging market strategy is a tremendous source of strength, but it has struggled at times both in China and in North America, and its European sales are falling now as well. Nokia's path -- based on Symbian, relatively slow innovation and a focus on low-margin emerging markets -- has not benefitted the company much. Yet, it still has some valuable assets. The firm may no longer have any 'hot' products, but the Nokia name is still respected. In addition, the company still has some financial health as well. That said, Nokia is struggling to find its way in the smartphone market. It feels that its product is competitive, but either they are wrong about the product or they have horrible marketing because Symbian is nowhere to be found. Its focus on India and other low-margin markets has it struggling with pretax margins, while industry leaders Apple, RIM and HTC have robust margins.