An Analysis of the UK Mobile Phone Industry and Nokia’s Strategic Positioning
The micro environment can be defined as that which consists of the groups that the company deals with on a regular basis. The microenvironment is thus comprised of the suppliers to the firm, the customers, distributors and other companies in the industry with which the firm competes with. In analysing these groups scholars have come up with a model that is specifically targeted at this kind of analysis which is called Porter’s five forces analysis (Lamb, Hair, & McDaniel, 2011). According Porter, the model presents five forces that determine the competitive nature of the microenvironment within which a firm operates in. scholars argue that a highly unattractive industry will be one that all the five forces found in the model are strongly present and this would mean that there is perfect competition. The model consists of the following forces: threat of new entrants, bargaining power of suppliers, threat of substitutes and the rivalry among existing competitors (Kurtz, 2008).
Threat of New entrants
The environment in the mobile phone industry as relates to new entrants can be seen to be in two folds. On one side, the complexity in the mobile phone manufacturing requires that any company that is thinking of venturing in the business should have vast financial capability, technological and marketing power in order to make an impact in the market. On the other side, there is homogenization of the hardware especially those of the lower end and an increased focus on software development and this allows an easier way for other new entrants in the market such as those strong in the software industry such as Google. However, the industry is still capital intensive and this makes it difficult for newer entrants in the market. A number of companies have initiated their operations in the UK and these include such companies as ZTE and HTC which have increased competition. These new entrants, however, still makes the market less attractive for other firms in the future (Data monitor, 2011).