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NAME: R.VISWESWARAN

ROLL NO: 32

BATCH:FINANCE

SESSION:PGP/SS/09-11

NOKIA-HCL

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NOKIA

• A century and a half of innovation, from a riverside paper mill in southwestern Finland to a global telecommunications leader.

• In 1865-1967 Nokia becomes a powerful industrial conglomerate from roots in paper, rubber, and cables, in just over 100 years.

• In 1968-1991 Nokia Corporation is ideally positioned for a pioneering role in the early evolution of mobile communications.

• In 1992-1999 Nokia makes the mobile phone as sector its core business. By the turn of the century, the company is the world leader.

• VISION: The individual communications experience.

• MISSION: They help communication service providers build more valuable customer relationships.

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MANAGEMENT

The corporate strategy of Nokia management has seen the Finnish

company rise to the forefront of mobile communications, occupying a key

position in the cellphone market. Nokia uses management practices such

as planned and emergent approaches to strategic management.

A head on experience curve

1865- 2006

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COST ADVANTAGE

PRODUCTION COST: It may be based in Finland but Nokia has its

branches everywhere around the world. Nokia has shifted it production

plants to India and china to cut its production cost.

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NOKIA – INDIA

• India is among the world's fastest-growing markets which has 170 million subscribers and adds 6 million to 7 million more each month.(China, in contrast, adds 5 million subscribers, and the U.S. 2 million subscribers a month.)

• Recognizing this potential, several global telecom giants jumped into the fray when the Indian government first opened up the country's telecom market to private enterprise in 1994.

• Among them, Nokia forged ahead of rivals and today commands a 58% market share for mobile phones (also called "handsets"). In specific segments, such as GSM, Nokia's market share in India is as high as 70%. (GSM, which stands for Global System for Mobile, is the world's most popular standard for mobile communications.)

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CONT.….

• Nokia was completely focused on mobile phones, others had consumer electronics, home appliances, etc.

• Nokia's focus was not just on handsets but also in mobile infrastructure business then part of Nokia India was equally important.

• In April 1, 2007, Nokia's joint venture with Siemens for mobile infrastructure has become an independent entity. Thus, Nokia India has become even more sharply focused.

• Nokia invested in each vertical of the handset ecosystem, manufacturing, distribution and design R&D." Nokia has invested more than $1 billion in India.

• In Indian Nokia had revenues of more than $3.5 billion in 2006, which means there is also money to be reinvested.

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CONT.….

• Nokia has entered into a contract with HCL Info systems subsidiary HCL Info comm to set up exclusive retail outlets to sell handsets and services directly to consumers.

• Nokia will hold a 51 percent stake in the joint venture with HCL. HCL would hold 49 per cent stake.

• Nokia made a joint venture agreement with Hcl on Jan 28 th 2009 for distribution of Nokia’s mobile phones in India

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MARKET RESEARCH& DISTRIBUTION PLAN

• India has some 95,000 outlets that sell mobile phones. "In 50,000 of them that's a conservative estimate only one brand available is Nokia ”

• Nokia started distributing its phones through a partnership with HCL and decided to supplement that with its own distribution efforts. Both companies realized that there was a tremendous growth opportunity and it was best that we utilized the resources of both organizations in an optimum manner.

• Nokia decided that they would address some markets jointly, and would individually address some of the other markets.

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CONT.…

• The metros and Tier I towns where mobility has been around for a few years, customer expectations are more evolved, and are continuously evolving.

• Nokia’s task here is to provide our people with relevant competency and skills sets.

• Nokia has begun to set up concept stores in Indian cities. "At our concept stores, they have tried to bring to life all the experiences that they offer at Nokia experiential zones across the world." Investment in Manufacturing The other big investment area that has isolated Nokia from other telecom firms is manufacturing facilities and R&D.

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REASONS FOR OWN DISTRIBUTION CHANNEL

• Building the Brand

• Keep your day job.

• Direct contact with buyers

• Target their customers directly and be profitable.

• Do your own word-of-mouth marketing.

• Give away brochure

• An Expanding Market.

• Products for India.

• Investment in Manufacturing.

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BUILDING THE BRAND

• Nokia's investment strategy focused on building its brand. Nokia brand in terms of his proprietary "REAPS" model, which takes into account five needs such as rational, emotional, aspirational, physical and spiritual of the Indian consumer. "Nokia as a brand has been able to address all the five needs to various degrees at various stages.“

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KEEP YOUR DAY JOB

• Nokia using the profits from the business at the start up will dry up the funds needed for reinvestment. It takes time and money to grow a business, and the best way to afford the time and money is to have alternate source of income. If you decide to quit your job, live beneath your means and save enough money to sustain you until you hit the payoff.

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DIRECT CONTACT WITH BUYERS

• Nokia felt to meet it’s customers directly to know their wants and expectation about new models. So Nokia felt to meet their customers directly rather than through distributors

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TARGET THEIR CUSTOMERS DIRECTLY AND BE PROFITABLE

• Nokia was waiting for the big payoff, small profits can go a long way in sustaining your business or preventing their costs to choke off cash flow. So Nokia started with direct sales and yield the profit of which they can use for reinvesting.

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DO THEIR OWN WORD-OF-MOUTH MARKETING

• At earlier Nokia in addition to all the functions they has to work as their own sales representative. It can mean making cold calls or mailing sales letters to different companies and hoping to be given a chance to do effective demonstration about their product neither a third party vendor cannot do .

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GIVE AWAY BROCHURE

• Word-of-mouth spread a long better with brochure printing which are used to inform their customers about the unique benefits of their products. Where in Nokia owned outlets has large amount of brochures in order to promote the brand .

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AN EXPANDING MARKET

• The Indian market for mobile phones, in addition to its base of 170 million subscribers, is also one of the most cost-effective in the world. The growth has been penetration-led, which means placing devices in consumers' hands. The bulk of the growth going forward will be replacement-led, where consumers come back for more. In India, consumers tend to change their phones faster than in most other places. And whenever they change their phone, 60% are willing to pay a higher price.

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PRODUCTS FOR INDIA

• The Nokia story in India has not been about grafting a model that has worked abroad. In fact some of its models the handsets, not the strategies are unique to India.

• The Nokia 1100, the first made-for-India phone, has been a runaway success. Manufactured at Chennai, it is also being exported. The 1100 incorporates a torch, an alarm clock and a radio.

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INVESTMENT IN MANUFACTURING

• Nokia has several R&D centers and labs in India. More importantly, it established a $150 million handset manufacturing facility in Chennai in 2005.

• The total production at this unit has crossed 25 million handsets. 3 0% of production is being exported to neighboring countries

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CONCLUSION

• Nokia has a world wide brand image they felt direct distribution will help in increase in sales reduction of distribution permanent growth in margin and increases brand equity.

• In India, consumers tend to change their phones faster than in most other places. And whenever they change their phone, 60% are willing to pay a higher price. future services that might be delivered over cell phones. "The cell phone could be the future bank.

• So Nokia have started their own distribution in many areas .

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INNOVATION IS SOMETHING WHICH CONSUMERS REWARD IN MARKET

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THANK YOU