Investigation on Whether Nokia Should Quit the UK Essay

Investigation on Whether Nokia Should Quit the UK - Essay Example The main research objective is find out whether it would be viable to minimize expansion of the Nokia brand in the U.K market. Nokia as evident from the analysis has been experiencing a decline it its market share in the named market. Competition has stifled with other companies providing equal or better quality mobile handsets. Handsets are now a requirement for a majority of people. Statistics has shown a decline in number of handsets purchased and an ever increasing number of smartphones acquired. It is a technologically changing world that can be attributed to this trend. People want the best, and since it is affordable, they can get it. Nokia holds a high popularity of mobile phone manufacturing companies in the world. It had the biggest market share of mobile users, but this is changing. This research focuses on finding out changes in the performance of Nokia and if it is a viable idea for to withdraw itself from the U.K market. In trying to answer this, several factors have to be investigated on the reasons that have led to this aftermath in the Nokia Company. 1.2: Research objectives. The research problems highlight the areas of importance in this study. They seek to encompass the most crucial factors involved in this project. They revolve around the Nokia Mobile statistics. They are, to determine the factors behind the decline of Nokia smartphone market share, changing trends in the mobile market, to identify measures to be taken against this issue and know if it is wise to leave the U.K market or not. 1.3: Research questions What are the reasons for declining market share in U.K, how can it be controlled and what are the appropriate ways to control it. 1.4: Statement of problem Factors influencing Nokia mobile market share the U.K and factors influencing changes in the mobile market in U.K 2.0: LITERATURE REVIEW In recent times, with the advancement of technology, operating systems became one of the major determinants of a company’s performance in the market. With the need for faster and efficient mobile systems, there has been competition on who provides the best operating system customers prefer in the U.K. Apple has the most popular OS scooping a share of 42%, Blackberry with 36% and android with a share of 12%. It is surprising because Nokia, known for its popularity and with the changing trends and stiff competition, stands to make its way to the top or quit the smartphone market for better standing mobile companies. This research focuses on finding out what appropriate measure to take, whether quit or continue in the race of attracting customers to use their smartphones. In trying to investigate this, it has to identify the gap existing the company and the competitors. Strategies used in pricing, promotion, quality provision and the 4ps of marketing have a large part in determining the performance of a company’s products. For example, while price may not be a substantial factor to consider because of affordab ility in the current market of smartphones it is still pertinent to know that is the crucial factor customers consider for any product. They may want to operate in the market with the highest margins. This can only be realistic in a monopolistic market where they are the sole suppliers of a product. That is why the Nokia Company have to identify what strategy to use to maintain their share, increase it or exit the market. They should

Business and Economic Forecasting Essay Example | Topics and Well Written Essays - 3500 words

Business and Economic Forecasting - Essay Example The appropriate model is estimated and a one to four step forecasting is undertaken to determine the appropriateness of the model. We consider the price index of the Rio Tinto, the 5 day weekly stock price for the period 31st December 1999 to 31st December 2007 is used and the following chart summarizes the price index for the period. From the above table it is evident that for the period 2000 to 2004 the price remained relatively stable deviating by small margins, however for the period 2005 to 2007 there was an increase in prices by larger margins. The following is an analysis of the Rio Tinto returns. According to Woodridge (2006) dynamic heteroskedasticity can appear in regressions with no dynamic, in a regression if the Gauss Markov assumption holds then the estimators are BLUE (best linear unbiased estimator). However even when the homoskedasticity assumption that the error terms variance is constant across observations holds there could be still other forms of heteroskedasticity that may arise, heteroskedasticity can be tested using the white test or the Breusch pagan test. The following chart shows a case of homoskedasticity and heteroskedasticity: From the above diagrams assuming that the 45 degree line is the fitted regression model, then the first diagram shows a case where as x increases the mean of y increases but the variance of y around its mean remains constant over time, for the second diagram a case where as x increases the mean of y increases and the variance of y around its mean does not remain constant and this shows heteroskedasticity. There are a number of consequences of heteroskedasticity and they include the fact that: Estimators are still linear functions of the independent variable The estimators are not biased Estimators no longer have minimum variance therefore are not efficient The estimated variance of the estimators is biased because the formula to estimate them could over state or under state the true variance The hypothesis test of the significance is unreliable given that the estimated variance is biased. As a result Engel (1982) suggested the ARCH model that would consider a conditional error term variance that takes into consideration past error terms and this was the ARCH model. The ARCH and GARSH model are appropriate models that can be used in modeling financial data that exhibit volatility clustering, volatility clustering refers to a trend that shows that small increases or declines are followed by small increases or declines and that large increases or declines are followed by large increases or declines. From our price data chart it is evident that for the period 2000 to 2004 small increases and declines are followed by small increases or declines, however for the period 2005 and 2007 large increases are followed by large increases. This means that the ARCH and GARSH model are appropriate in estimating an appropriate model. The following chart summarizes the returns mean, kurtosis and