NOKIA Nokia Corporation is a Finland based multinational

company Headquarter -- Keilaniemi, Espoo, city neighboring

Finland's capital Helsinki. CEO -- Olli-Pekka Kallasvuo Chairman -- Jorma Ollila. Founder -- Fredrik Idestam in 1865. Nokia started as a pulp, rubber and cable

manufacturer

Founded as a paper mill in Finland by Fredrik Idestam1865

NOKIA CORPORATION1967

Nordic Mobile Telephone (NMT) launched1981

Telecommunication branch ‘Nokia-Mobira Oy’ formed1984

Mobira Cityman, 1st handheld NMT phone launched1987

Jorma Ollila becomes President and CEO of Nokia1992

1st GSM handset, Nokia 1011, launched1992

HISTORY

INDUSTRY ANALYSIS Number of mobile subscribers in INDIA has crossed the

250 million mark. Mobile phone production in India was expected to grow

from 51 million units to 110 million units by 2011.• Handset Market Share

Nokia: 49.5% Sony: 10.1% Samsung: 12% Motorola: 9.9% Others: remaining

MARKETING STRATEGIES NOKIA… Focused on Handset Manufacture only Enhance Product Portfolio Increase Distribution Channels Adjust Preferences for specific markets Customer Satisfaction Focused on Replacement Increase Commitment to Emerging Market Improve Collaboration on Designs Ensure Accountability and Quality Aggressive Pricing

Macro Enviroment of NOKIA

POLITICAL FACTOR:

ECONOMIC FACTOR:

SOCIAL FACTOR:

Nokia has been a member of the United Nations Global Compact since 2001

Nokia reported spending $5.4 million on lobbying in the U.S. in 2007 and $2 million on lobbying in 2008.

Nokia had to change its functions from single market to global market due to collapse of Russian Federation.

TECHNOLOGICAL FACTOR:

LEGAL FACTOR:Patents right on technology

ENVIRONMENTAL FACTOR:

Environmentally ethical considerations amongst suppliers. Life cycle impact of NOKIA throughout the supply chain

Improvement or Changes in technology

Macro Enviroment of NOKIA

SEGMENTATION STRATEGY 

Geographic:

o Nokia immediate geographic target is rural India.

o The total targeted population is estimated at 100 million.

Demographic:

o Male and female. o Ages 25-50, this is the segment that

makes up 80% of the Nokia mobile phone market

CONSUMER BEHAVIOURCultural Factors

Social Factors

Close family relationshipsSaving-oriented mentality

Need for communicationNeed for low end mobile phones

Personal Factors

Status symbolFamily & friends

Age & occupation• Students• Working Professionals• Housewives

POST SALES BEHAVIOUR Availability of service centers

Online applications and applications stores Nokia Ovi Suite Nokia PC Suite Nokia Beta Labs Symbian OS

Software upgrades

Resale value

PSYCHOGRAPHIC SEGMENTATION

High Involvement

Low Involvement

Rational Aspirational

Product Price

Place Promotion

MARKETING MIX

MARKETING MIXPRODUCT

Classification of products based on:Useneedprice

LIVE

CONNECT

BUSINESS

LIFESTYLE

Messaging

FM

RingtonesColor Screen Alarm

MP3CameraBluetoothGPRS

Push mail services

Mobile business solutions

Quick Office Call conferencing

3GGPS High MP

camera and

HD video

Nokia 1100• SEGMENT - Low end basic phone•TARGET GROUP - Lower class (first time users)•POSITIONING - Highly reliable & durable phone for working class India•World’s best selling model- sold 250 million phones

Nokia 5800• SEGMENT - Mid-range multimedia phones•TARGET GROUP - Young Generation from middle & upper-middle class•POSITIONING - device for the music crazy customers.•In 2008, Navigation Edition was released which positioned it as much more than a music phone with maps, navigation features, car charger and car kit

Nokia E72• SEGMENT - Mid-high end Business-cum-Smart phones•TARGET GROUP - Business professionals aged 25 - 50 with upper middle class incomes•POSITIONING – Business phone to serve needs of working professional + good multimedia support

Nokia N8• SEGMENT - High End Smart Multimedia phones•TARGET GROUP - Young Generation from the upper middle class•POSITIONING - device packed with must have features like vibrant GUI, music, connectivity, photography, games etc

PRODUCT

PRICE

MARKETING MIX

Penetration Pricing

Price Skimming

Low end phones

High end phones

Price wars leading to lower profits

Higher demand for advanced features

MARKETING MIX

Nokia has the largest mobile distribution network of 1,30,000 outlets

Nokia ‘Concept Store’ setup in 9 major cities across India to enhance customer experience

Nokia Priority Dealers setup in all Tier- 1 and Tier- 2 cities

Multi-brand stores like The Mobile Store, Hot Spot, Big C, etc

PLACE

MARKETING MIX

Below the line marketing Brand Ambassador Priyanka Chopra / Shahrukh Khan Digital marketing through social networking sites, mobile sites,

blogs, etc Extensive TV campaigns and Advertisements in regional languages

Made For India advertisement for Nokia 1100 The Har Jeb Mein Rang Advertisement Campaign

Main sponsor of Kolkota Knight Riders in IPL Nokia India Fest 2011-Pan India College festival

PROMOTION

RURAL MARKET

Nokia Life Tools (Jeevan Sadhan): SMS Mechanism, Sachet Pricing, Daily cost of Rs 1 only

‘Showrooms on wheels’ and ‘Rural care on the go’

Tie-up with major micro-finance institutions like SKS Microfinance

PROMOTION

Public Relations ( PR )… Nokia has strong PR. They keep on doing some or the other

new events, programmes and publicity, so as to keep up with the brilliant image of the company and also to enhance the brand equity.

• Direct Marketing :• Nokia does not perform Direct Sales activities on its

official website www.nokia.com.• Nokia use DEMO style of Direct Marketing.• Nokia does not use Direct Mail or Telemarketing styles of

Direct Marketing.

RIVALRY AMONG COMPETITORS

CONCENTRATION AND BALANCE: The major players are Samsung, Micromax, Blackberry, LG, HTC etc

INFORMATIONAL COMPLEXITY: Devices are becoming more complex and getting features that are outside the core competencies of traditional manufacturers

CORPORATE STAKES: High stakes for the companies because of huge investments into the business

REDUCING PROFIT MARGINS due to intense competition & price wars

COMPETITIVE ANALYSIS

A BRIEF COMPARISONNokia vs apple

START UP

Apple June 29,2007 Investment in marketing – less

than $1 billion. No. of employees- 98,000. Revenue - $182.795.

Nokia 1981 , In 2007, n95 was

released. Investment in marketing - $1

billion only in india. No. of employees – 61,656 Revenue - $13.5

NOKIA MARKET ENTRY

Pros Less market competition.

Cons Less technological

advancement. Less awareness among

customers.

APPLE’S MARKET ENTRY.

Pros Respectful brand reputation in

existing market. Advance technology. Market awareness.

Cons Brand competitors. User’s preference. Consumer’s Idea about mobile

phones.

HANDSET MARKET SHARE

nokia samsung lg motorola sony ericson rim htc apple others0%5%

10%15%20%25%30%35%40%

2007

2007

HANDSET MARKET SHARE

apple nokia samsung zte lg motorola sony htc rim others0%5%

10%15%20%25%30%35%

2011

2011

FACTORS FOR RISE AND FALL.

Before iphone, handset like Nokia with record selling was based on fashion and brand rather than technological innovation.

Apple proved phone was not just a communication tool but a way of life.

INNOVATION.

Iphone - June 29,2007 Iphone 3G – July 11,2008 I phone 4S – October 4 ,2011 Iphone 5S – Sept. 12 ,2012 Iphone 5C & 5S – July 22, 2013 Iphone 6 & 6 plus – Sept

9,2014

Mobira series(1982-1990) Original series(1992-1999) 4-digit series(1994-2010) Lettered series(2005-present) 3-digit series(2011-present) Worded series2011-present)

PICTURE VIEW COMPARISON

Apple – keeps on changing and advancing.

Nokia varied models.

ROLE OF OS

ios android windows basic0%

10%

20%

30%

40%

50%

60%2014

2014

Advancement. Awareness . User-friendly.

REVENUE SECTOR

Q4 of 2008, apple was third largest mobile phone manufacturer by revenue after Nokia & Samsung.

By 2011,apple became mobile handset vendor in the world by revenue surpassing long time leader NOKIA.

Q1 0f 2012, 99% of industry profits taken by apple & Samsung , nokia going on a loss with other companies.

Strengths

Weakness

Threat

Opportunity

SWOT

Strong Corporate Brand & the largest cell phone vendorUser-friendly featuresStrong Distribution NetworkBest Navigation (Nokia OVI Maps)High resale value of hand-sets compared to other handsets

Slow to adopt new ways of thinking (for example, launch of dual sim mobiles)High prices compared to other domestic companiesSymbian OS lost out the race with Google’s Android and Apple iOSToo many products & very little product distinctionNo of features offered in the lower end Nokia models are very little and stagnant

STRENGHTS

WEAKNESS

SWOT ANALYSIS

Nokia can expand its market share by introducing a new low cost brand in competition to companies like Micromax, GFive etcIncrease their presence in CDMA marketThey can target the smart phone in the low to medium segment with MS Windows- 7 platform

OPPORTUNITIES

Threats from emerging domestic companies like Micromax, Karbonn, Maxx, Lava, Spice etc who offer similar features at lower pricesIn the higher segment it is losing market share to players like Apple, HTC, Blackberry, Samsung, etc

THREATS

SWOT ANALYSIS

THE TUMBLE DOWN!

First hit when competition started. Second hit when Competitors took over

COMPETITION…

While it was not totally unexpected, what caught Nokia off-guard is the rate at which competitors where innovating new technology.

Since the launch of the iPhone/Android phones, Nokia failed to keep up with the industry. While other kept proceeding ahead aggressively by ‘hook or crook’.

MARKET SHARE

Nokia Samsung Nokia Samsung Nokia Samsung2010 2011 2012Mar

76.1

5.9

38.5

25.6 23

41.8

Market share (%)

HOW NOKIA FAILED IN CONNECTING 'TO' PEOPLE

Introduction of Iphone in 2007.

Nokia relied too much on Windows platform which was proved as another costlier step for the brand.

Apple redefined smart phones with touch screen and Blackberry with email. Android proved that software matters more than hardware.  Nokia was slow to respond to these trends.

In India, local brands stole the lead on dual SIMs, low-end Qwerty and long-battery-life phones.

ANDROID WEAKENED ROOTS OF NOKIA?

In 2008, brands like Samsung, HTC, and Micromax found roots to extend their market.

Samsung's Android phones are user friendly and budget friendly too. Google bought a company called Android and announced an Open Handset

Alliance, a grouping of industries players who would come together to build an OS for smart phones. But Nokia refused the invitation.

Nokia's entrance into Windows platform is quite late. Finally Nokia gave up for a 7.1 billion to Microsoft. 

MISTAKES THAT LEAD TO NOKIA FAILURE

1. Failure of Symbian OS:

Nokia launched its Symbian 60 series in year 2002 which initially had a good market response.

The introduction of Apple IOS in 2007 and Android in 2008, the OS race was completely taken over by the two giants.

The reasons for collapse of Symbian OS is lack of applications and UI (User Interface).

After facing competition from iOS and Android, Nokia continuously tried to improve their Symbian OS but was not creating something unique.

2. WRONG DEAL WITH WINDOWS

The company made the biggest mistake to take a leap of faith in Windows in 2011. At that point of time, the company already was in declining condition and trusting Windows which was new in the field to regain its status was the biggest mistake the company made.

All these phones which the company launched were comparable to other competitor devices but OS was the problem which lead to ultimate collapse of company.

3. NOKIA BECAME LAGGARD IN SMARTPHONE MARKET

COMPLACENCY: Stiff competition from Samsung and Apple.

Lack on focus on innovation was the second big reason of collapse.

Nokia seemed to be lagging in the race. Where Samsung from nowhere entered the race and focused on innovation as its core competence to gain the market share, Nokia was very late to realize this fact.

COMPETITION… LACK OF INNOVATION: If analyzed through the Technology Lens, Nokia primarily failed to innovate attractive

technology and features.

For example: 1. Nokia had touchscreen phones, it did not attract customers as much as compared

to Apple iPhones. 2. China Mobile- it made exact copies of Nokia

The software being developed were using old development models and newer concepts such as User Experience and User Interface were being neglected.

Nokia was clinging onto Symbian OS for too long. It had reached its peak.

REDRAFTING STRATEGIES

In September 2013, Nokia announces that it has entered into an agreement with Microsoft whereby Microsoft would purchase substantially all Devices & Services, the Nokia business which makes mobile phones and smartphones.

• Stephen Elop facilitated this deal and his role in it has been questionable.

• Though Nokia is now reporting profits, it had lost its glory in the market it once dominated single-handedly.

WHAT DID STEPHEN ELOP DO WRONG ?Inspecting with the organization and human performance lens.WOULD TECHNOLOGICAL CONVERGENCE LEAD TO TECHNOLOGICAL OBSOLESCENCE?Awareness StageConsideration StageDecision Stage

The George Washington UniversityWRONG DECISIONS.

While the entire smartphone OS industry was evolving, manufacturers moved on and adopted various operating systems like Android, Windows, Bada, Meego, et cetera, Nokia decided to stick to Windows OS only.

As Android and iOS became more popular, Nokia and its windows phones failed to attract any attention.

• Though the new technologies developed by Nokia were ground breaking, they were not promising enough.

RESULTS

During the 3 years Elop was Nokia CEO, Nokia revenues fell 40%, Nokia profits fell 95%, Nokia market share collapsed in smartphones from 34% to 3.4%

Nokia's credit rating went from AAA to junk, Nokia's share price dropped 60% in value and Nokia's market capitalization lost a minimum of $13 Billion in value.

• The Financial Times calculated that Nokia shareholders ended up paying Elop a bonus of 1 million Euros for every 1.5 Billion in market capital that Elop was able to destroy while Nokia CEO

RUMOR MILL Stephen Elop was working with Microsoft’s Business Division before

moving to Nokia. He was the first non-Finnish CEO of Nokia and it is argued that

Stephen was sent with the sole purpose of devaluating Nokia as to make it easier and cheaper for Microsoft to buy it.

Microsoft being a software giant always had ambitions to acquire a hardware sector firm and as Nokia dipped to the bottom, Microsoft announced that it had bought Nokia for $7.2 Billion.

• While all this happened, Stephen comes back to Microsoft as VP of Microsoft's Devices & Services business unit and gets a signing bonus of $25 Million

CONCLUSION

From Technology perspective, Nokia did not deliver as per expectations based on previous performance

From the Strategy perspective, though Nokia did eventually come up with nice lucrative products, it lost in the race against time due to poor strategies and sly competition.

From the organizational and people perspective, the new CEO’s attitude and competency proved to be fatal for the company.

The entire Rubik of Organization , people and strategy failed to deliver for Nokia.

Questions are welcomed.