Nokia Analysis

In: Business and Management

Submitted By termpaper1214
Words 330
Pages 2
At the beginning, we want use some figures to help us understand what is the position that Nokia standing. In 2010, Nokia, the world’s largest phone maker, has lost almost 60 billion euros ($77 billion) in market value since the iPhone’s 2007 debut, with the stock falling 25 percent this year alone. The Espoo, Finland-based Company has lowered profit forecasts twice in three months, as new high-end Smartphone were delayed. Chairman Jorma Ollila has stood by CEO Olli-Pekka Kallasvuo and his management team in the four years since Nokia’s last big hit, the N95, helped boost the operating margin in the devices unit to more than 21 percent. Since then, Apple and Research in Motion Ltd. have eaten away at Nokia’s customers and profit, pushing the handset margin to 12.1 percent in the first quarter. Then we move to 2011, during this year, the market share of Nokia fallen to less than 30%.

From these numbers our group found that one of the reasons Nokia has fallen so fast is that it has a simple branding problem: Nokia isn’t a distinctive brand. It is a brand with positive associations and high awareness, but it isn’t unique. For many years, Nokia seemed to successfully do what marketing experts say you can’t do: serve all segments in a market. Nokia sold very high-end, technologically advanced phones and simple, inexpensive phones, all under the Nokia brand. The branding structure was very simple: the Nokia brand with a product number, such as N8, the company’s newest smartphone, or E7. Of course, many branding problems only surface over time. And that is certainly the case for Nokia. By playing in all segments of the market, Nokia watered down its brand, eroding its meaning. Nokia has competitors with very strong brands. Apple has created a remarkably strong brand portfolio with well-defined brands: iPod, iPhone and iPad. Blackberry is a strong brand, too.While the…...

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