Market Model Patterns of Change - Essay Example

? Market Model Patterns of Change Communication industry is one of industries that are growing rapidly globally. Nokia Corporation is one of the business or company in the communication industry. Nokia known by its tagline ‘connecting people’ has been in the industry of communication or mobile phone industry for over thirty years. Due to the improvement of telecommunications technology, Nokia Corporation industry has recently advanced tremendously. Nokia corporation has a rich history, it started its mobile production process by the year 1979; the company created a radio telephone. In the year 1981, it introduced a Nordic mobile telephone (NMT); NTM was the first mobile phone or cellular phone which was able to permit roaming network. In 1987 the Nokia Corporation launched a mobile phone that was capable to be handled, the phone used NTM network. Regardless of its price and its weight, the phone became classic as it recorded biggest sell of the time. In the year 2002 the Nokia Corporation launched Nokia 3650, the phone had camera feature. Later in the year, the company launched Nokia 6650; it was the first 3G phone in the market. Currently, Nokia has made a major step on the models of the phone they are manufacturing. In the year 2011 February, the Corporation declared to work together with Microsoft Company to improve features of Smartphones they plan to manufacture. After the two major company united, in October they launched two models; Nokia Lumia 880 and Nokia Lumia 710 (Pulkkinen, 2011). Previously, Nokia Corporation was enjoying monopoly; it was the first company to develop hand mobile phone. Despite the size and the price of the phones, in made highest sell than what the company was expecting. In 2005, the company manufactured Nokia 1100 which recorded billion sell even though it was having less features. The monopoly of the industry Nokia to enjoy profits and failed to concentrate on the advancement of their products. As the industry evolved, new technologies were brought into the market. Small industry entered into the market and impressed technology, these new companies in the industry started manufacturing products that had more features, hence attracting more customers. With the increase in competition, Nokia Corporation started to follow new drift of the technology and started to manufacture better phone models. Initially, Nokia Corporation enjoyed monopoly, currently there is pressure in the communication industry. Different and new companies have entered into the market and are making remarkable profits; therefore, Nokia Corporation is facing oligopoly. At present, other companies that are into the market includes; Motorola Corporation, Samsung company, apple industry, Alcatel, Sony Ericson, and blackberry Corporation. Each new product brought into the market by one company, it is countered by other company by producing a more advanced technologically handset. With these competition trend seen in the market, consumers or the buyer of the product are the ones who enjoys better product. Also with this tendency of competition, consumers have a wide variety of product to choose from and at an affordable price (Morris, 2009). Presently, it is viewed that the market or the industry trend has changed to a perfect competition; there is no dominant company in the market. Each company is trying to manufacture best possible product than what the other company can produce. In the short term run, the major dominant or the giant company in the industry will enjoy the market as a result companies known and trusted names. This dominancy with major company will hinder penetration of the emerging businesses into market. The new company has never been on the market before and there product has never been used before; it will be difficult for them to penetrate into the market. Therefore, in a short run, the dominant corporation including Nokia, and Samsung; they will prevent entry of the new companies into the market (Gruber, 2005). In the long term run, the smaller and the emerging industry will be able to enter into the market. They will carry out technological research and come up with more advanced product than the ones in the market. With new product having more features, consumer will end up preferring them than what dominant companies can bring into the market. Due to the stiff competition in the market, where new industry manufactures new products; most of the company in the industry will end up investing heavily on advertisement. In order your product to be known in the market, despite the title of the company, they will need to advertise to win consumers. With the emerging competition, consumers will benefit a lot; they will be able to choose from a wide variety of the product. Also, in the long run, the revenue that the company will be able to generate from manufacturing process will reduce drastically due to competition and high cost engaged in advertisement. Factors that will affect competition in the market include resemblance of the product, advancement of the technology, and reduction of barrier in the market entry. Similarity of the product will hinder competition; almost all corporations are manufacturing similar product, for example they are all producing Smartphone. Advancement of technology leads to manufacture of new phones, hence the company will not engage fully in marketing their product but conducting research to develop new product. For the productivity measures, the industries needs to manufacture large number of phones that are advanced technologically, this will fit the demand in the market, hence make profits. In the cost reduction measures, the industry will be able to produce cheap phones, affordable to the market, hence make enough profit. On the supply measures, the industry should avoid the middlemen to supply there product into market. Without middlemen, the cost of the product in the market will be reduced; hence able to make sell at affordable price therefore, making enough profits (Gruber, 2005). The most competitor company to Nokia Corporation includes; Samsung, Sony Ericson and LG. Different Company have its own preference on pricing strategy. For the Samsung Company, they have been frequently employed cost based pricing strategy. There price is achieved by adding fixed profit that the company requires and the cost they engaged in manufacture to arrive at their selling price. They determine their profit by considering the price of other product in the market. On the other hand, Sony Ericson uses value based pricing strategy, they consider customers value to the phone, if the products meet consumers need bef. When consumer is highly satisfied, they tend to set high price on their product. By knowing competitors pricing strategy, the company can be able to decide on the most appropriate pricing strategy that will maximize company’s profit. For example, Nokia corporation will decide to use different pricing strategy that will favors consumers; leading to have cheaper product, hence making more sell. In my opinion, the most effective pricing strategy that Nokia Corporation should adopt is demand based pricing strategy. Unlike value based pricing, this strategy considers both the consumers feeling on the product and also, it consider on the behavior and characteristics of the product in the market. This pricing strategy fully focuses on the demand of the product in the market; when the demand is high, the product price will be high and when the demand is low, the price becomes low (Zhang, 2005). Mobile industry has received many new entry companies, as a result of telecommunication technology advancement; new competitive products have been manufactured. Nokia Corporation being one of the companies, it has faced stiff competition but still struggling in the industry. To be sustained in the market, different measures have been taken by companies, these includes productivity measures and cost reduction measures. Also, different corporation have adopted the pricing strategy that will enable them maximize on their sells and make profits. References Gruber, H. (2005). The economics of mobile telecommunications. Cambridge: Cambridge University Press. Morris, H. and Morris, G. (2009). Market-oriented pricing: strategies for management. New York: Quorum Books. Pulkkinen, M. (2011). The breakthrough of Nokia mobile phones. Helsinki: Helsinki School of Economics and Business Adiminstration. Zhang, J. (2005). Pricing strategies. Boston: McGraw-Hill Custom Publishing. Read More