An Investigation on how to become a Global Leader in International Mobile Phone Market: A case study of Nokia.
This study aims to use Nokia as a case study. Nokia becomes the world's number one manufacturer of mobile devices by market share and a leader in the converging Internet and communications industries (Nokia online, 2010). They produce a wide range of devices for all major consumer segments and offer Internet services that enable people to experience music, maps, media, messaging and games. They also provide comprehensive digital map information through NAVTEQ and equipment, solutions and services for communications networks through Nokia Siemens Networks (Nokia online, 2010). The main purpose of this section is to provide research aims, objectives and research background.
1.1 Research Background
Nowadays, it is really easy to see a new style and high technology mobile phone every single day. The story of mobile phones is not too long. There were only mobile phones ten years ago to just make a call. After that, innovations followed each other such as testing, additional music players, and cameras, touch screens, etc. Likewise product life cycle has been getting shorter and shorter, because of increasing high technology. However, mobile phone companies find themselves in a tough competition to sell more their own products and make it better profit. In highly competitive business environments and short product life cycles and especially for high technology producing industries, there is one way dealing with this highly pressures, which are Research& Development and manufacturing of new products. New product development and innovation are mainly important in industries which technology changes speedily and product life cycle is so short. Nokia is one of the most innovative companies in the mobile phone industry. The key factor in order to reach success for Nokia is to establish right balance between innovation and execution. Nokia Corporation is a world leader in global communications. Nokia's central office is in Espoo, Finland, just nearby Helsinki. Nokia's global presence is composing by its sixteen manufacturing services and eleven research and development centres in eleven different countries around the world. Nokia has a history of being innovative and has a well known reputation among the top innovative companies in the world (Nokia online, 2010). The aim of the proposal is to find out how Nokia is applying new product development process and its strategic important for Nokia in a highly competitive environment and its outcomes.
1.2 Research Aims and Objectives
* To understand the importance of Nokia's new product development strategy and in a highly competitive business environment.
* To identify the new product development and the Steps (NDP) of Nokia.
* To examine how Nokia applies NDP steps in their business.
* To examine the important to innovative for Nokia.
* To examine the new product strategy of Nokia in a competitive business environment
* To examine the competitive advantages of new product for Nokia.
* To investigate the new product development strategy positioning of Nokia as in comparison to other competitors in the same segment.
1.3 Research Questions
1. Does the new product development strategies and its competitive advantages to become a global leader in Mobile Industry?
2. What factors influences to become a global leader in Mobile Industry?
2. Literature Review
This study is about the influence of new product development. Therefore, the main focus of the literature review will be surrounding the new product development and competitive advantage of NDP. Understanding the concept, importance and stages of new product development are important to marketers. This is because if marketers understand the importance of NDP and the competitive advantage, they will be able to use appropriate tools and factors to influence to become a global market leader in their business.
2.1 Identify the new product development
New product development (NPD) is the term used to identify the process of bringing a new product or service to existing market. According to Kotler et al. (1994) “New products are original products, product improvements, product modifications and new brands that the business develops through its own research and development efforts”. Thomas (1993) argues that “A new product is a multidimensional concept that has not been experienced by a significant number of stakeholders potentially interested in it and is capable of offering a strategic competitive advantage”.
New product development is really to exist in the market because demand for most brands or products life cycle. In addition to this, new product development is a necessary to a response rapidly changing new technology and market conditions. New product has got a big importance to most organisations, especially global competitions, increasing technology and short product lifecycles. However, unpredictable consumer buying patterns and possible market changes make new product development a critically important in highly competitive businesses. New product provides organizations new growth opportunities that allow them to stronger their market position.
Creating the right organizational culture that can encourage innovation. It is one of the primary tasks for top management. Nokia has got a right organizational culture to encourage employs for innovative. Strategic planning sets important guidelines for new product development. Some organizations have a very successful in creating an innovative culture that supports new product ideas and encourages staff for their contribution towards new product development processes. Nokia is one of the global companies, which have got right organizational culture.
The success rate of new products is depending on many factors, such as the organisation's size, management style, available resources, staff expertise, senior management support, marketing strategies and distribution channels. A successful new product development requires participation from marketing, sales, research and development, design, finance, technical, manufacturing and legal functions.
2.2. Stage of the new product development Process
The process of new product development goes through a logical series of steps from the inception of the idea to the actual launch of the product. These steps are now explained.
2.2.1 Idea Generation
Idea generation can come from a variety of sources. In innovative companies, such as ideas tend to be research driven. The notion of marketing orientation tells us that we should look to our customers first (through marketing research) before embarking upon new product development. In the case of companies producing ‘breakthrough' products this might be difficult as customers will not necessarily be able to envisage what they require. However, as we shall see later in this section, ideas are not simply generated and made into products that are then marketed. Marketing research does come into the equation, but more thorough procedures like product testing come later in the process. A culture should exist within the organization that encourages new product ideas among more than simply the Research & Development function. The sales force should be a regular source of new product ideas, and such data can be gathered from the company's marketing information system. Brainstorming is a good method of producing new product ideas as long as it is chaired competently, but regular meetings of planning committees should have this at the head of their agenda. Venture teams can then be set up to progress towards likely ideas. (Lancaster G, online Marketing Note, 2009)
Screening is the first stage of sifting viable ideas from fewer viable ones and obvious issues are addressed at this stage in terms of potential demand, the company's capability in terms of development and production and the profit potential. This is an important stage at which ‘Go' or ‘Drop' decisions are made. This screening process should have due regard to whether or not the new product will fit into the range of products that the company markets. To start a completely new venture might mean expensive investment in not only production capacity and skills, but a completely new marketing team might be required. (Lancaster G, online Marketing Note, 2009)
2.2.2 Business Analysis
Business analysis is where the new product idea's financial viability is appraised. By this phase only ‘serious' contenders will remain and here a critical stage has been reached. Such analysis needs to consider total costs rather than simply development and production costs. (Lancaster G, online Marketing Note, 2009)
2.2.3 Product Development
Product development is the point at which the company has committed itself and indeed this is when costs start to increase sharply. Where appropriate, prototypes will be developed and these can be assessed by marketing research through product appraisal tests. It is also here that product refinement and modification will be possible through feedback from marketing research. It might also be the point at which the product is abandoned if expectations do not match up to reality, rather than risk a ‘high exposure' failure in the marketplace. (Lancaster G, online Marketing Note, 2009)
2.2.4 Test Marketing
Test marketing is the penultimate stage. This might be appropriate where the product is a fast moving consumer good when it can be tested in test towns or television test areas before going ‘national', but this is not always appropriate for more durable products. Here, product placement tests with members of the general public are probably more appropriate. The only problem with full scale test marketing is that it allows our competitors to see what we are doing, so clearly this disadvantage must be weighed against the advantages of simulating a National launch before full scale commitment. This indeed is why product testing, rather than higher profile test marketing, is better in terms of confidentiality. (Lancaster G, online Marketing Note, 2009)
Commercialization is where the product is to be launched on the market. All the various filters have taken place, but even at this stage success is not guaranteed. However, there is a far greater likelihood of success if the procedure just described has been undertaken. (Lancaster G, online Marketing Note, 2009)
Booz, Allen and Hamilton first put forward the notion of the decay curve of new product ideas, which is illustrated in Fig 1.
2.3 Important of NDP and competitive advantages
New products, form of new applications, new innovations, or entirely new goods, are an important component of business success. According to Gruenwald (1995) “Some entire industries are based on effectiveness in new product development". In industry, new products are essential for existing. Companies must continue to learn and to be innovative, or they will die by the time.
New products are essential to survival. Innovation networks are particularly important in industries where technology changes rapidly and product life cycles are short "Innovate or die" has become a more important rule for international companies. Nokia is realised important of new product. Nokia deals with this station by being innovative, and it provides competitive advantages in the highly competitive market.
New product development provides an opportunity to change the competitive land. New products can help a company to gain new customers, retain existing customers and increase profitability. So, new products are the source of competitive advantage, if it is done properly. And this puts high responsibility on the Research and Developing Department.
Customer's needs keep changing by the time. In order to keep hold of existing customers, business must continuously adapt to meet the changing customer requirements. Companies need to keep the existing customers excited and happy. Other ways, company loses costumers and market shares. The sample between Motorola and Nokia is a very good example for importance of innovation. For example, for a long time Motorola made and sold only analogy phones. Motorola did not invest for innovation for long time. Then Nokia came up with smooth digital phones and took the market share from Motorola in 1998.
New product development is a best way to reach a gain market share. Successful product companies have a history of introducing new products at regular intervals. They have a pretty clear target and a well defined product road map which is composed by deep engineering capability innovation and R&D capability.
So, if we are not introducing new products at regular intervals, then it is almost certain that our competition can take your market share away easily. In this step, I will evaluate importance of NDP and its competitive advantages in the highly competitive market.
2.4 Nokia and their new product development steps
Nokia sets up agreements with world class universities in order to support its NPD system. Nokia use internet environment very efficiently. “Nokia Beta Labs” is a website where lets costumers test new ideas. Nokia wanted to offer their users an opportunity to identify the next use of mobile devices and Internet, Instead of costumers contributing to social media sites. Nokia Beta Labs allows costumers of Nokia mobile phones to provide private feedback or general feedback. However, Nokia uses share ideas. or which is an online community. Its purpose is to make online community, in order to share individuals and institutions thoughts. (Nokia Research Centre, online 2010)
2.5 Nokia's strategy of innovation and alliances
‘Strategic change is often considered as a necessity for companies to survive in a turbulent environment'(Hamel and Prahalad 1994). Highly international competition and rapidly changing technology are often mentioned as primary motives for companies to adapt their corporate strategy. For Nokia, the best way of dealing with the highly competitive environments and short product life cycle of especially high technologic products is to collaborate with well known universities and research institutes around the world such as the Massachusetts Institute of Technology (MIT) and Stanford University in the US and University of Cambridge in the UK. On the 5th of June 2008, Nokia opened a laboratory in Lausanne to form a long‐term research program with the Swiss Federal Institutes of Technology in Lausanne and Zurich. (Nokia Research Centre, online 2010)
3. Research Methodology
Therefore, there are many steps that need to be carried out and conducted in order to complete all its research aims. Therefore, the main focus of this section is to provide information on the research methods required to collect necessary data to support the analysis of this study.
3.1 Paradigm - Deductive Reasoning
The deductive reasoning will be used in this study. It is also known as the deductive logic which is about using the truth or logical consequence to support the argument. The deductive argument is only valid under this condition. The following is examples of the deductive reasoning.
1. Fruits are green.
2. Tomatoes are fruits.
3. Tomatoes are green.
3.2 Research Approach & Strategy
The research approach and strategy that will be used to conduct this study can be explained below.
3.2.1 Exploratory Research
During the exploratory research, the focus group interview will be conducted. The main attention of the focus group interview is to collect necessary data about NDP strategies and its competitive advantages and usage of customers aged between 18 and 60 years old towards International mobile phone Market.
The researcher provides two choices of schedules to respondents and the researcher will choose the one that most subjects are available for the fieldwork. The researcher aims to conduct the focus group interview at the coffee shop. Responses and answers from the respondents will be recorded by the data recorder. This will enable the researcher to probe when required, and it will also allow the researcher to observe the body language of respondents (Saunders et al., 2009).
The focus group interview questions aim to influence respondents to express their opinions and ideas about NDP strategies and its competitive advantages towards mobile phone industry. The collected data from the focus group interview will be used towards the questionnaire design.
3.2.2 Descriptive Research
The descriptive research is a stage after the exploratory research. The main purpose of the descriptive research is to report the research results from the focus group interview. It will be present along with the statistical data.
3.3 Types of Data
Data that will be used to support the analysis in this study will be collected from two sources: (1) primary data and (2) secondary data.
3.3.1 Primary data
Primary data refers to ‘the first-hand information which collected by the researcher for a specific reason' (Beins, 2004, p. 87). Based on the definition of the primary data, I can define the meaning of the primary data from my perspective as.
‘The information which does not exist in any secondary source and the researcher makes a decision to collect it to resolve the problem at hand'
There are different research methods that researchers can use to collect primary data. In general, primary research methods involved with some kinds of observations and surveys. They are also subject to both qualitative and quantitative fashion. Examples of popular primary research methods include the questionnaire, Delphi research, action research, focus group interview, individual in-depth interview and protocol analysis (Carr, 1979). In this study, the primary data will be collected through the quantitative questionnaire.
3.3.2 Secondary Data
Secondary data has been defined by many scholars. However, most of them hold similar ideas. In general, secondary data refers to ‘any information collected by someone else for some other purposes other than the project at hand' (Cassell et al., 2006, p. 162). Based on this meaning, I can give the definition of the secondary data from my own view as.
‘Existing data, which can be gathered from various sources collected by other researchers'
Secondary data can be collected from different sources, such as journal articles, Business Library, newspapers, websites, magazines, textbooks and the university database. It is necessary for the researcher to ensure that the secondary source should gather only from reliable sources with a good credibility (Saunders et al., 2006). In this study, the researcher will collect secondary data from different sources, such as textbooks, journal articles, newspapers and websites as well as the university database like Emerald and Mintel. The researcher will make sure that the secondary data from these sources have a good credibility and reliability.
3.4 Data Collection
The primary data of this study will be collected through the use of the structured questionnaire.
3.4.1 Questionnaire (the Personal Survey)
The questionnaire is one of the popular research methods, which are widely used by many researchers in various fields. The questionnaire refers to ‘a data collection instrument, formally setting out the way in which the research questions should be asked' (Schmidt & Hollensen, 2006, p. 147). Based on this definition, it can be assumed that the questionnaire can be developed in both semi-structured and unstructured formats. The structured questionnaire will be used to collect the primary data in this study. This means that respondents who agree to take part in the survey will have to select the answers from the set of available choices in the questionnaire form.
Respondents who will be taking part in the personal survey are convenient subjects. The researcher aims to invite 100 similar kinds of respondents. Places where the researcher will find suitable respondents are the coffee shop, shopping malls, train stations and tube stations. The researcher makes a decision to use a sampling size of 100 respondents because of the following reasons.
1. The smaller sampling size under 100 respondents will not provide enough data to support the analysis of this study.
2. The larger group of sampling size of more than 100 subjects will give to board information, which will be difficult to analyses.
The process of the personal survey (the questionnaire) involved with reading questions and a set of available choices of answers in the questionnaire form to respondents. Once respondents determine the answer, the researcher will circle or tick the selected choice in the form on their behalf. As this is the first time that the researcher carries out the research, the researcher has limited knowledge about the academic research. Therefore, the researcher has plan hire two assistants to support during the data collection. The research assistants must have a good research skill, especially in terms of the personal survey.
3.4.2 Characteristics of Respondents
The researcher aims to invite the following people with the following characteristics to take part in the fieldwork.
1. The respondents aged between 18 and 60 years old.
2. Use and have an interesting in the International mobile phone market.
3. Live and work in London. London is chosen as the sampling location because it is the capital of England, and it also has a large number of populations. This enables the researcher to have wider choices of subjects to choose from.
3.5 Data analysis
The main purpose of the data analysis is to assess and represent the primary data collected through the questionnaire. The analysis will be based on practical and theoretical aspects of new product development strategies. The theoretical concepts of new product development which are previously discussed in the literature review chapter will be used to support the data analysis. The statistical software SPSS will be used to analyses the primary data collected through the qualitative questionnaire. The research results will be reported in the following formats.
3. Standard Deviations
To ensure that this research is completed by the deadline, there are many research activities that the researcher must accomplish under the specific timeframe. Thus, the main purpose of the timetable is to give information about the schedule for each research activity.
Writing up the introduction chapter
Collecting secondary data from reliable sources to write up the literature review
Developing the focus group interview
Conducting the focus group interview with eight respondents
Analyzing the collected data from the focus group interview
Developing the questionnaire based on data collected through the focus group interview.
Writing up the research methodology chapter
Conducting the personal survey (the questionnaire)
Analyzing data collected through the personal survey.
Writing up the report from the questionnaire
Writing up the conclusion chapter
Finalizing the dissertation
Printing and binding the thesis
3.7 Ethical Issues
The researcher will ensure that all respondents who take part in this study have a full protection in terms of ethical aspect. The following are tactics that will be used by the researcher.
1. Personal information and any respondent related data will be treated in discrete manage. Information provided by respondents will not be shared or passed to any third party without consent from the subjects.
2. Data provided by the respondents will be used towards the academic research only.
3. Respondents are free to terminate their presence in the survey at any time.
It is essential to be aware important for New Product Development, and it is also necessary the existing highly competitive business environment. Nokia is one of the global companies, which are aware of important for NDP. Nokia does not know how the future markets will look like, nobody knows. Nokia sets long term goals and seeks to identity ways technology and social movements will define the market in five to ten years. It will be identified Nokia's NDP strategies and its competitive advantages will be pointing by the research.
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