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Nokia Strategic Analysis

In: Business and Management

Submitted By babarsaeed
Words 7019
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Research Report

Submitted To

Sir Khalid Jamil Ansari

Prepared By

Babar Saeed (BM-25208)

Bashir Ali (BM-25178)
TABLE OF CONTENTS

Acknowledgement 02
Executive Summary 03
Company Introduction 04
Company History) 05
a) First Mobile Phone 06
b) GSM Introduction 06
c) Strategic Change 07
Vision, Mission, Organization Direction 07
Environmental Analysis (Internal) 09
Environmental Analysis (External) 12
a) Pestle Analysis 12
b) Porter five forces Analysis 14
SWOT Analysis 18
Market/Competitor Analysis 19
Strategic Analysis 23
a) Corporate Strategy 25
b) Business Strategy 25
c) Operational Strategy 25
d) Supply Chain Strategy 26
e) Defensive Strategy 26
f) Competitive Strategy 26
Nokia Marketing Strategies Analysis 27
a) Segmentation by Geographically 27
b) Segmentation by Demographically 28
c) Segmentation by Consumer / Business 28
Marketing Mix Strategies 29
a) Product
b) Price
c) Place
d) Promotion
Key Strategic Issues Face Nokia 30
Nokia Leading Mobile Series 31
a) N Series 31
b) E Series 32
c) X Series 33
d) Asha Series 33
e) Lumia Series 34
References 35

ACKNOWLEDGEMENT

One of the great pleasures of writing the report is acknowledging the efforts of our teacher and friends whose hard work, cooperation, friendship and understanding were crucial to the preparation of this report.
First of all, we would like to acknowledge the efforts of Sir Khalid Jamil Ansari whose sincerity, loyalty, hard working and kind parental attitude helped us to complete this project report.
Very special thanks to Mr. Abdul Raheem and Miss Nosheen (friend and class mate) who continuously helped, encouraged and remind us preparation this report.

Babar Saeed (BM-25208)
Bashir Ali (BM-25178)

Dated: 30-09-2012

EXECUTIVE SUMMARY

The following report provides an independent strategic analysis on the business of Nokia, the equipment company. Within the report advanced strategy tools are used to analyze the company’s internal and external environment, current direction and competitive advantages. Suggested changes to the overall company direction as well as changes to both the Business Unit and Corporate Level strategic options are put forward and compared with Nokia’s existing strategies.
The first part discusses the brief introduction, history; company Vision, Mission, direction, internal and external analysis, company strength, weaknesses, opportunities, threats analysis, and market and competitor analysis.
The second part of the report analyzes the strategic analysis of the Nokia Company which contains, Nokia businesses areas, corporate, business, operational, market strategies and segmentation, marketing mix. Key strategic issues and major mobile family series of the company.

Owing to the complex and self-motivated environment, Nokia faces numerous strengths, weaknesses, opportunities, and threats. the key strategic issues Nokia is facing today is acknowledged to be continually declining market shares, intensive smart phones competition, rapid technological change, economy, brand , cheap mobiles of the Chinese companies, users trust and shifting attitudes to smart phones.

COMPANY INTRODUCTION

Nokia is the world 2nd largest multinational communications and information technology corporation of Finland. Its principal products are mobile telephones, portable IT devices, Internet services and including applications, games, music, media and messaging through its Ovi platform, and free-of-charge digital map information and navigation services through its wholly owned subsidiary Navteq. Nokia has a joint venture with Siemens, Nokia Siemens Networks, which provides telecommunications network equipment and services.
Nokia has around 122,000 employees across 120 countries, sales in more than 150 countries and annual revenues of around €38 billion.[As of 2012 it is the world’s by unit sales (after Samsung), with a global market share of 22.5% in the first quarter.] Nokia is a public limited-liability company listed on the Helsinki, Frankfurt, and York stock exchanges. It is the world's 143rd-largest company measured by 2011 revenues according to the Fortune Global 500.
Nokia was the world's largest vendor of mobile phones from 1998 to 2012. However, over the past five years it has suffered declining market share as a result of the growing use of smart phones from other vendors, principally the Apple iPhone and devices running on Google’s Android operating system. As a result, its share price has fallen from a high of US$40 in 2007 to under US$3 in 2012. Since February 2011, Nokia has had a strategic partnership with Microsoft, as part of which all Nokia smart phones will incorporate Microsoft’s Windows operating system (replacing Symbian). Nokia unveiled its first Windows Phone handsets, theLumia 710 and 800, in October 2011.

COMPANY HISTORY

Nokia's history started in 1865 when mining engineer Fredrik established a ground wood pulp mill on the banks of the Tammerkoski rapids in the town of Tampere, in southwestern Finland in the Russian Empire and started manufacturing paper. In 1868, Idestam built a second mill near the town of Nokia, in 1871, Idestam, with the help of his close friend statesman Leo Mechelin, renamed and transformed his firm into a share company, thereby founding the Nokia Company, the name it is still known by today.

In 1902, Nokia added electricity generation to its business activities. In 1898, Eduard Polón founded Finnish Rubber Works, manufacturer of galoshes and other rubber products, which later became Nokia's rubber business. In 1922, Finnish Rubber Works acquired Finnish Cable Works.
The three companies, which had been jointly owned since 1922, were merged to form a new industrial conglomerate, Nokia Corporation in 1967 and paved the way for Nokia's future as a global corporation.

a) First Mobile Phone

In 1987, Nokia introduced one of the world's first handheld phones, the Mobira Cityman 900 for NMT-900 networks (which, compared to NMT-450, offered a better signal.
Nokia's mobile phones got a big publicity boost in 1987, when Soviet leader Mikhail Gorbachev was pictured using a Mobira Cityman to make a call from Helsinki to his communications minister in Moscow. This led to the phone's nickname of the "Gorba".

b) GSM Introduction

Nokia was one of the key developers of GSM (Global System for Mobile Communications Nokia delivered its first GSM network to the Finnish operator Radiolinja in 1989. The world's first commercial GSM call was made on 1 July 1991 in Helsinki, Finland over a Nokia-supplied network, by then Prime Minister of Finland Harri Holkeri, using a prototype Nokia GSM phone. In 1992, the first GSM phone, the Nokia 1011, was launched. The model number refers to its launch date, 10 November. The Nokia 1011 did not yet employ Nokia's characteristic ring tone, the Nokia tune. It was introduced as a ring tone in 1994 with the Nokia 2100 series.
GSM came to dominate the world of mobile telephony in the 1990s, in mid-2008 accounting for about

c) Strategic Change

Probably the most important strategic change in Nokia's history was made in 1992, however, when the new CEO Jorma Ollila made a crucial strategic decision to concentrate solely on telecommunications. Thus, during the rest of the 1990s, the rubber, cable and consumer electronics divisions were gradually sold as Nokia continued to divest itself of all of its non-telecommunications businesses.
By 1998, Nokia's focus on telecommunications and its early investment in GSM technologies had made the company the world's largest mobile phone manufacturer,[ a position it would hold for the next 14 consecutive years until 2012. Between 1996 and 2001, Nokia's turnover increased almost fivefold from 6.5 billion euros to 31 billion euros.

VISION STATEMENT
“Our vision is a world where everyone can be connected. Our vision is to ensure that 5 billion people are always connected at any given point and to achieve 100 fold more network traffic”
MISSION STATEMENT
‘’In a world where everyone can be connected we take very human approach to technology”
ORGANIZATIONAL DIRECTION

Nokia’s Mission (Nokia, 2011)
“Connecting People”
Nokia’s Vision (Nokia, 2011)
1. Build a new winning mobile ecosystem in partnership with Microsoft
2. Bring the next billion online in developing growth markets
3. Invest in next generation disruptive technologies
4. Increase our focus on speed, results and accountability
Vision = Mission + Strategy + Culture
(Lipton, 1996) Nokia’s recent partnership with Microsoft highlights that the company has embarked upon one of the most significant changes in organizational direction in its 146 year history. Changes in leadership and operational structure have further solidified the company’s admission that they got it wrong over the past decade letting their market share erode; the result of being slow in recognizing and executing on the needs and wants of a constantly changing and dynamic market. Failure to implement any radical change could have seen Nokia’s market share further eroded by the innovative North American rivals of Apple and RIM as well as the low cost Asian manufacturers.
Nokia’s new organizational direction consists of four pillars which are highlighted in their vision and highlight their new core competences. The most important of all is perhaps the launch of the new smartphone ecosystem with Microsoft – Nokia need it to be successful; Nokia highlights this worry within their most recent SEC Form-20 filing: “Our proposed partnership with Microsoft may not succeed in creating a competitive smart phone platform for high-quality differentiated winning smart phones or in creating new sources of revenue for us” (SEC, 2011). The strategy was put into action with the launch of the aggressively priced Lumia smartphone range.
Within emerging markets Nokia has adopted a two tiered approach – first, the provision of basic mobile phones for those consumers entering the market for the first time and second, the “upper-low” income consumers who cannot afford a fully-fledged smartphone but are aspirational. For this second tier, Nokia recently launched the “Asha” family of touch/type feature phones, which offer smartphone functionality including app downloads. These products will ship at the beginning of 2012, aimed at first time emerging market mobile data users. Competitive intensity in low and mid-range smartphones is increasing due to rapidly falling Android device price points.
The third aspect of Lipton’s “Vision” equation, culture, is especially interesting in Nokia’s case due to the fact that it has undergone significant changes recently, the direct result of an ‘internal shakeup’ which saw a new CEO appointed. The new leadership has been brought in to change an aspect of Nokia’s culture that was causing them to fall behind competition, speed of execution. This is typical of most large MNEs in which the time to change corporate direction is very lengthy. The new leadership team strive to change the operational structure; focusing on speed, accountability and results. Other foundations of Nokia’s culture such as “achieving together” reflect how Nokia reaches out to others, “very human” illustrating how they do business and work with one another, finally “engaging you” to reflect how Nokia engage customers, suppliers and their own employees (SEC, 2011).

ENVIRONMENTAL ANALYSIS (INTERNAL)

Internal analysis provides a useful method to establish the relationship between Nokia’s resources and capabilities, and how this is used to create value for the customer. The internal analysis can also help identify the limitations within Nokia’s operations (Johnson et al, 2011)

a) Mobile Phones

`
b) Smart Devices

c) Location & Commerce

ENVIRONMENTAL ANALYSIS (EXTERNAL)

a) Pestle Analysis

1) Political

The external political environment has the potential to impact Nokia significantly – especially due to the fact that Nokia is operating on a global scale and must abide to a whole host of nation specific platforms in which the political and legal systems could differ substantially. “To its success, Nokia surveys its scope of limits in order to isolate prohibited actions, regulations and aid from the government so as to withstand the international trade” (MBA Knowledge Base, 2011). Within the United States Nokia has to devote funds to lobbying on matters relating to patent protection, electronic waste exports and trade barriers (Implu.com, 2011) – in 2011, $500,000 has been spent thus far. Other political aspects that impact Nokia include new and existing laws or regulations, in 2010 Saudi Arabia suspended Blackberry’s messaging service – a critical core feature and competitive advantage – on the grounds of “national security” (Times, 2010) – illustrating how easily national laws can quickly impact and upset core competitive advantages. Labour laws have also impacted Nokia; Nokia China announced plans to cut the number of employees, to which they were accused of violating Chinese labor laws (Buzzom.com, 2011). Nokia works closely with national authorities in order to gain maximum advantage and to not incur any penalties.
2) Economic

Economic factors such as growth rates, interest rates, exchange rates and inflation rates are critically important to Nokia both in the short term and long term. The impact of these factors can have major implications, including how they operate and make decisions – such as what should be produced, how it should be produced and what demographic of customer the end product should be targeted toward. Gross Domestic Product (GDP), for example, dictates what strategies Nokia should implement and consequently what products should be offered in which countries. This helped shape Nokia’s “Next Billion” strategy for the emerging markets in which more basic cheaper phones are offered. The volatility of the Indian rupee is another example in which it affected Nokia’s top line growth, restricting in their ability to increase price to push the costs onto the consumer – high inflation within India causes price stability problems (India Times, 2011). The financial crisis has impacted Nokia as customers within developed nations saw their disposable income decrease, delaying new smart phone purchases or opting for less costly contracts with free phones (Times, 2011).

3) Social

Very few industries can rival the mobile phone industry in relation to constantly changing consumer tastes. Nokia’s products have relatively short product lifecycles; this means Nokia has to pay close attention to trends and social tastes. Developments in how mobile phones and smart devices are used have changed over the years, for example, the emergence of camera phones, touch screens and 3G. Failure to implement features when they first emerge can lead to significant market share erosion (Unwired View, 2011). Nokia operates in a huge number of markets mainly due to its strong distribution network – all of these markets have specific tastes, cultures and expectations; thus, Nokia caters to these differences by providing different models with both subtle and extensive differences throughout their entire range of products. Other social aspects such as advances in the workplace impact Nokia and its workforce; increased use of outsourcing of jobs to other countries, increased demand for work/life balance, and increased demand for job mobility and flexibility.
4) Technological

Within the telecommunications industry, specifically OEMs, the speed of change and adoption of new technology impacts incumbents significantly – the success of Nokia is based on constant innovation. Nokia analyses research and development advances by competitors – evident from their quick adoption of touch screen technologies and more recently through their research initiatives into devices such as Tablets that are similar to the iPad. Industry advances, for example cellular telephony spectrums – 3G and now 4G impact both Nokia’s business unit and corporate level strategies; examples of the Pareto principle in action.
Environmental
Changing public attitude towards environmental sustainability as well as product disposal and recycling have transformed considerably over the past decade. Nokia have been proactive with regard to environmental responsibility and sustainability, they put forward that it is “integrated into everything we do. From the devices we build and the suppliers we choose, to our mobile solutions that enhance people’s education, livelihoods and health”. With regard to product sustainability and the trend in recycling products, “Each and every Nokia device is created with the environment in mind. We don’t make one-off eco-friendly devices – all the handsets and accessories we produce fulfill our strict environmental criteria” (Nokia, 2011). Nokia also reduced the packaging size of most devices by 70% between 2005 and 2010. Nokia has set an aspirational target to reduce greenhouse gas emissions caused during the whole mobile device life cycle over 60% by the year 2020 to the level in 2000 (The Economist, 2010).

5) Legal

Nokia has over 132,000 employees in 120 countries (Mashable, 2011) and thus recognizes the importance of issues that relate to employment regulation as well as employee health and safety. For example, Nokia recently signed an agreement relating to the compensation packages to be received by the employees of Nokia working at the Jucu plant with the Romanian trade unions (Business Review, 2011). Product safety and security is another legal issue that is of utmost importance to Nokia – “All Nokia products are designed and manufactured to be safe for users… products have been designed to meet relevant safety guidelines for electromagnetic field emissions…” (Nokia, 2011)
As previously mentioned legal battles over patents and the protection of intellectual property are intense between the leading manufacturers – with many manufacturers usually trying to ban the importation of devices they believe infringe upon their patents (Economist, 2011). To illustrate one example, in June of 2011 Nokia claimed victory in a long running patent battle with Apple – Nokia had put forward that Apple’s iPhone violated at least 7 Nokia patents. As a result of the ruling Apple has now signed a patent licence agreement with Nokia (Financial Times, 2011). Nokia currently has one of the strongest intellectual property portfolios within the wireless industry – holding over 10,000 patents (SEC, 2011).

b) Porters Five Forces

Porter’s Five Forces analysis is used to assess the attractiveness of different industries and it can help illustrate the sources of competition in an industry (Johnson, Scholes & Whittington, 2011). The Porter’s Five Forces analysis has been conducted with attention on each of Nokia’s SBUs; mobile phones, smart devices and, location and commerce.

i. ) Porters Five Forces – Mobile Phones Threat of Entry of New Competitors – HIGH

Barriers to entry within the basic mobile phone industry are relatively low; hence Nokia stands to, and currently is subjected to, intense competition on their “next billion” strategy. The market within emerging markets is dominated by local OEMs and is extremely price competitive – illustrating those low cost rivals can enter at any time. Nokia’s awareness of this can be seen in their 20-F filing with the SEC: “In the mobile phones segment a different ecosystem is emerging involving very low cost components and manufacturing processes. In particular, the availability of complete mobile solutions chipsets from MediaTek has enabled the very rapid and low cost production of mobile phones by numerous manufacturers in the Shenzhen region of China which have gained significant share in emerging markets.” (SEC, 2011) Competitive advantages within distribution have somewhat cushioned the impact to Nokia; however, customer loyalty within emerging economies where disposable income is very low – means that cost will be the overall determinant of the product purchased.

i. ) Threat of Substitute– HIGH

Within emerging markets the buyers’ propensity to substitute is relatively high, with the one overarching factor being price. Switching cost is minimal, especially with regard to the handset, rather than the network. If the customer has a laptop and internet connection VOIP services such as Skype could challenge the need for a basic mobile phone. ii. ) The Bargaining Power of Customers – HIGH

The bargaining power of mobile phone customers is high within both developed and developing markets as switching costs are low, and competition between manufacturers is high. Brand loyalty is the only real defense that manufacturers can use to prevent switching; Nokia recently saw its brand value fall $9.9 billion in the Brand Finance Global 500 listings – the largest decline of any name. iii. ) The Bargaining Power of Suppliers – LOW

Nokia has an extremely complex supply chain that handles 100 billion components, 60 strategic suppliers, and 10 factories worldwide (IBM, 2006). Nokia strives to build partnerships with its suppliers linking supply chain objectives to corporate objectives; within this supply chain redundancies are built so that no one supplier is critical to the production process. The power is further reduced by Nokia’s upstream and downstream vertical integration at its own factories as well as by its strong brand and bulk purchase agreements. Many factories and companies exist solely because they are suppliers to Nokia. Nokia constantly ranks amongst the leaders in supply chain management; historically being a strong innovator (Business week, 2005) supply chain best practices have turned ideas into profitable businesses. iv. ) The Intensity of Competitive Rivalry – HIGH

Within developed markets the intensity of competition in basic mobile phones has curtailed, with the product line currently in significant decline. Within emerging markets Nokia is facing strong competition not only from the usual players but also domestic firms who are both able to provide innovative basic mobile phones for low cost. China was 21% of Nokia’s sales in 2010 but sharp decreases in revenue in 2011/2012 are expected (Goldman Sachs, 2011).

1) Porters Five Forces – Smart Devices Threat of Entry of New Competitors – MEDIUM

Production of smart devices involves highly advanced research and development divisions; with strong knowledge of patents and proprietary technology critical. Significant investment is needed for any potential competitors to achieve economies of scale; it would be difficult for the new entrant to compete against the incumbents that are already operating on cost and differentiation strategies. Although, the smartphone market does boast attractive growth rates – 30% in 2010 (Reuters, 2010) – and high margins; thus, it is not unfeasible that a new player could enter the market, for example what Apple achieved in 2007.
2) Threat of Substitute– LOW

There are few substitutes for smart phones; those people who require a basic device will purchase a mobile phone; those who want a device for applications and other related services will purchase a smart phone. There may be some pressure from tablet devices; however, these will lack the basic functionality of phone calls. Net books and laptops could potentially be a substitute. Because the smart phone serves as a consolidation of several technologies – the treat of it being substituted is weak.

3) The Bargaining Power of Customers – HIGH

Buyers have high bargaining power and will pay for what they value the most; thus, they have a willingness to switch to more innovative products. Customers are also armed with knowledge about which smart phone platform has the best and most interesting applications, functionality and other factors such as battery life through extensive reviews and information. Bargaining power will be predominantly through switching brands rather than substitution of smart phones overall. Bargaining power is diluted by network providers with the inclusion of long contracts, meaning customers are tied to a phone for typically between 12-24 months.

4) The Bargaining Power of Suppliers – LOW

The bargaining power of suppliers over Nokia is relatively low. Through industry leading and prudent supply chain management, Nokia have many fail safes in place if one supplier was to suddenly shut. For the suppliers that do exist – Nokia orders in huge quantity and is such an important customer that most suppliers would not want to risk damaging the relationship.

5) The Intensity of Competitive Rivalry – HIGH

In developed markets competitive rivalry within the smart phone market is intense – Nokia, industry leader, faces constant competition from manufacturers such as Apple, HTC, RIM and Samsung.

SWOT ANALYSIS

MARKET / COMPETITOR ANALYSIS

Global Handsets Shipments: 2010 to 1Q-2012 (millions)
COMPANY 2010 2011 1Q 2012
Nokia 453 417 82.7
Samsung 280.2 322.5 93.8
LG 116.7 90.4 13.7
SonyEricsson 43.1 34.2 7.3
Motorola 37.2 42.8 8.8
Blackberry 48.0 54.0 11.1
Apple 47.5 93.1 35.1
HTC 24.6 45.1 6.7
Huawei** 27.4 51.6 10.5
ZTE** 36.1 73.6 18.9
TCL 32.0 34.0 7.8
(Alcatel
Mobile
Phones)**
Others 214.6 307.9 66.6
Total 1360.4 1566.2 363

Samsung In Q1 Samsung took the handset shipment crown from Nokia which had held the No. 1 spot for over a decade. Additionally Samsung widened its lead in smartphone shipments over Apple with 42 million units shipped. With pre-orders of the Galaxy S3 already in the millions and the continued success of the Galaxy S2 and the 5" Galaxy Note 'Phablet,' it appears that Samsung will only widen its lead over competitors in 2012.
Nokia The No. 2 position is new territory for Nokia, as its handset shipments dropped 24% YoY and 27% sequentially. Nokia is not just losing share to competitors in the smartphone space where its shipments declined to 11.9 million from 19.6 in Q4 2011; Nokia's portfolio low end of devices also saw shipments decrease by 23 million from the previous quarter. The problem is not just a regional collapse as every region except North America saw a precipitous drop in shipments. To put it in perspective, Nokia's single quarter shipment decline is equal to ZTE and LG combined shipments this quarter. Two more quarters of this and Nokia will have to struggle to remain in the top ten. ABI Research believes it is time to put Nokia on death watch.
Apple Apple's shipment decline of 5% can be attributed to seasonality and the regularly expected drop in shipments from a post launch quarter. Although ABI Research estimates shipments will decline again in Q2, this should not be viewed as a decrease in demand for iPhone, but a buildup in demand for the next iPhone expected to be released in Q3. If Apple can maintain its current rate of growth with its upcoming iPhone, ABI Research believes Apple could become the No. 2 handset OEM by 2013.
ZTE ZTE remains a bit of a dark horse in the global handset race, as it continues to show annual shipment growth and plans to double is smartphone shipments in 2012. ZTE continues to focus on becoming a globally recognized consumer brand and believes the U.S. will be its largest market by 2015. ZTE's low cost handsets are ideal for the growing interest in prepaid smartphones, but ABI Research believes that by 2015, China will be ZTE's (and others) best bet for smartphone sales.
LG LG Shipments declined 44% YoY and the company continues to lose market share in the collapsing feature phone market. Despite LG's continued decline in shipments, the company did something highly remarkable in the handset industry: after 7 quarters in the red, LG is back in the black! ABI Research notes that historically when a handset company with declining sales slips into the red, over 90% of the time, the company never recovers and is either acquired or goes out of business. It has been LG's slowly improving performance in the smartphone segment that has taken the handset division off of life support, but ABI Research still believes this patient will require careful monitoring before a clean bill of health can be given.
Blackberry (RIM) RIM has faced numerous challenges over the past year which has led to sweeping changes in its top management. RIM's shipments continue to decline as its portfolio of devices continues to look somewhat archaic against its competitors in developed markets. While RIMs handsets continue to have a Luke warm reception outside of North America, ABI Research believes that it was RIM's loss at home that sparked its general global decline. Furthermore in Q1, RIM was not profitable, which when combined with declining shipments is the telltale sign of impending doom for a handset company. Despite all signs pointing to serious trouble, it should be noted that RIM does have enough cash to keep running for another year and that RIM will release new BB10 smartphones before time runs out. If RIM can deliver the type of smartphones that will win back North American consumers, RIM could be one of the lucky few to come back from the red. Considering early demonstrations of the BB10 devices, ABI Research is not fully convinced that RIM is down for the count.
Huawei Historically considered a low cost Chinese handset OEM, Huawei shares the international stage with ZTE and TCL/Alcatel, as a rising star from China. Huawei has leveraged its prolific set of carrier infrastructure relationships to deploy its low-cost handsets in nearly every region. Huawei continues to grow from low-cost handsets to low-cost Android smartphones and like its Chinese brethren is one of the few OEM's that can deliver a sub-$150 smartphone today. With China's appetite for Apple's smartphones increasing every day, Huawei is seeking to move up the value stream with its smartphones and hopefully get a piece of Apple's pie.
Motorola As Google gains approval from China for its acquisition of Motorola, overall handset shipments continued to decline 2% YoY while smartphone shipments were up 20%. Despite the improved smartphone to feature phone ratio, Motorola failed to be profitable for the fifth consecutive quarter. With Samsung and Apple pushing other OEMs out of Motorola's primary U.S. market it will be increasingly important for Motorola to find greater success overseas. Motorola will need to depend on more than the U.S. market if it does not want to be a weight on Google's profits and OEM relationships.
TCL (Alcatel) TCL is a well-known electronics brand in China that had formed a joint venture with Alcatel of France to leverage new markets and carrier relationships. For TCL this means strong growth of sales of entry- to mid-level devices in EMEA and LATAM. The Alcatel / TCL device portfolio is a mix of low- end candy bar devices and colorful clamshell devices with basic media capabilities. Most TCL handsets are designed to meet the universal needs of all regions served by Alcatel and TCL, allowing for greater production volume per device model. TCL's efficient production has allowed it to offer low-cost 3G handsets that are sought after by consumers moving from 2G. TCL is continuing to leverage its low-cost production capabilities to offer sub-$150 Android smartphones, and remains one of the few OEMs that can do that today.
Sony Mobile Sony Mobile Communications (formerly Sony Ericsson) will become the first handset OEM to fully complete a transition from feature phones to smartphones. While some issues are to be expected when simultaneously shifting product strategies and ownership, Sony has continued to grow its smartphone shipments but not its profits. ABI Research believes that with a 100% (currently at 90%) smartphone portfolio, Sony will have to begin finding its way to profitability in the very near future or its appearance in the top 10 list will be short lived.
HTC While technically not in the top ten this quarter, HTC's historic performance has earned itself a mention on this list regardless. HTC shipments experienced its second sequential 30% decline in a row. North America used to account for 50% of HTC shipments (currently 25%), but HTC's rush to produce LTE smartphones for the U.S. has been halted by terrible battery life, mediocre performance and the iPhone 4S. HTC has all but conceded the North American market to Samsung and Apple and will refocus on developing its presence in China and its new One series devices that ABI Research believes are the most technologically sophisticated devices HTC has ever accomplished.

Strategic Analysis
Nokia has three Strategic Business Units/Divisions (SBUs): Mobile Phones, Smart Devices and Location and Commerce.
a) Mobile Phones
Its Mobile Phone team focuses on bringing a modern and affordable mobile experience to people around the world (Nokia.com, 2011).
b) Smart Devices
The Smart Devices team focuses on the creation of smart phones – this is the SBU responsible for the partnership with Microsoft and the Windows Phone platform (Nokia.com, 2011).
c) Location and Commerce
The Location and Commerce team are responsible for developing a new class of integrated social location products and services for consumers, Nokia Maps. In addition to the services based aspect the Location and Commerce SBU provide digital map information, related location based content and services for mobile navigation devices, automotive navigation systems, governments and business solutions through Navteq, which was acquired in 2008

SBU Identification Matrix
Application Geographical Developed Markets Emerging Markets
Mobile Phones √ √
Smart Devices √ √
Location & Commerce √ √

On 11 February 2011, Nokia's CEO Stephen Elop, a former head of Microsoft business division, unveiled a new strategic alliance with Microsoft, and announced it would replace Symbian and MeeGo with Microsoft’s Windows operating system except for mid-to-low-end devices, which would continue to run under Symbian. Nokia was also to invest into the Series 40 platform and release a single MeeGo product in 2011.
As part of the restructuring plan, Nokia planned to reduce spending on research and development, instead customizing and enhancing the software line for Windows Phone 7. Nokia's "applications and content store" (Ovi) becomes integrated into the Windows Phone Store, and Nokia Maps is at the heart of Microsoft's Bing and AdCenter.
On 19 June 2006, Nokia and Siemens AG announced the companies would merge their mobile and fixed-line phone network equipment businesses to create one of the world’s largest network firms, Nokia Siemens Networks. Each company has a 50% stake in the infrastructure company, and it is headquartered in Espoo, Finland. The companies predicted annual sales of €16 bn and cost savings of €1.5 bn a year by 2010. About 20,000 Nokia employees were transferred to this new company.
In October 2007, Nokia bought Navteq, a U.S.-based supplier of digital mapping data, for a price of $8.1 billion. Nokia finalized the acquisition on 10 July 2008.

a) Corporate level Strategy

On the corporate echelon Nokia is cultivating a growth strategy. Its growth is obsessed principally by acquisitions and concentrated R&D. During the past few years Nokia has been vigorously obtaining companies with new technologies and competencies, including besides investments in alternative positions. All of these acquisitions and investments were embattled to improve Nokia's ability to assist form the Mobile World.

b) Business Level Strategy

Nokia's trade level strategy is based on a cost leadership. Nokia has an outsized product portfolio which would gratify consumers all over the world. It strives to keep low costs for its products throughout firm costs management and economies of scale. Nokia utilizes strategic suppliers all over the globe to attain extremely modified subassembly apparatus which are used to generate its elevated tech savvy devices.

c) Operational Strategy
In 2011 Nokia had 130,000 employees in 120 countries, sales in more than 150 countries, global annual revenue of over €38 billion, and operating loss of €1 billion. It was the world's largest manufacturer of mobile phones in 2011, with global device market share of 23% in the second quarter.
The Nokia Research Center, founded in 1986, is Nokia's industrial research unit consisting of about 500 researchers, engineers and scientists; it has sites in seven countries: Finland, China, India, Kenya, Switzerland, the United Kingdom and the United States. Besides its research centers, in 2001 Nokia founded (and owns) INdT – Nokia Institute of Technology, a R&D institute located in Brazil. Nokia operates a total of 9 manufacturing facilities located at Salo, Finland; Manaus, Brazil; Cluj, Romania; Beijing and Dongguan, China; Komárom, Hungary; Chennai, India; Reynosa, Mexico; and Changwon, South Korea. Nokia's industrial design department is headquartered in Soho in London, UK with significant satellite offices in Helsinki, Finland and Calabasas, California in the US.

d) Supply Chain Strategy

Nokia’s supply chain strategy is decentralized as its operational and marketing facilities are world wide.

e) Defensive Strategy

In order to go with iPhone and Blackberry smart phones and protect its share in the converged handsets market, Nokia introduced 5800 touch screen. As a consequence, after the first quarter of 2009, Nokia's market shares in smart phones augmented by 3%.

f) Competitive generic strategies

In particulars, the competitive strategies lead the success in the marketing. The key attitude for a competitive strategy is how to build advantages in market competition. Cost leadership differentiation and focus are three competitive generic

1) Cost leadership Strategy

Nokia claims a cost reducing on its capital markets day at the end of this year. Nokia CFO, Rick Simonson emphasized that Nokia is practicing a cost reduction which is effective now and is continuing to keep the strategy for 2009 and 2010 ((Nokia Capital Markets Day, 2008). Nokia is always using a highly variable, low fixed cost business model. The balance sheet of 2007 gives us a clearer view of this. the cost leadership strategy is possible to follow and the switching cost for customers of mobile telecommunication industry is very low, almost zero. So it's rather easy for a customer to purchase another brand of mobile phone only for a lower price.

2) Differentiation Strategy

Differentiation strategy means providing diverse products or services from competitors to attain competitive advantages focused on enormous market.
Modern telecoms market is changing quickly, grows up rapidly, and compete fiercer than most other markets. So it is quite vital to keep competitive by maintaining up to date and spotlight on modernization. The marketplace is shifting all the time and the conventional mobile device industry is implicated with internet services, therefore, the products and services Nokia offers should be totally change (People management, 2008). Seeing this trend, Nokia amalgamated with Nokia Siemens Networks.

NOKIA TARGET MARKET STRATEGIES
a) Segmentation By Geographically

SALES VOLUMES BY GEOGRAPHIC AREA million units 2011 Region Sales in % age 2010 Region Sales in % age YoY Change
Europe 87.8 21% 112.7 25% -22%
Middle East & Africa 94.6 23% 83.8 19% 13%
Greater China 65.8 16% 82.5 18% -20%
Asia-Pacific 118.9 29% 119.1 26% 0%
North America 3.9 1% 11.1 2% -65%
Latin America 46.1 11% 43.7 10% 5%
Total 417.1 100% 452.9 100% -8%

b) SEGMENTATION BY AGE GROUP
• Nokia customer age group is male and female between 18 to 50 years.

c) SEGMENTATION BY CONSUMER / BUSINESS GROUP
1. CONSUMER SEGMENT Light/Medium users
• Price
• Low information search
• Package deals Heavy users
• Functional & Psychological reasons
• High information search

2. CONSUMER SEGMENT Functional motive
• Battery life, capabilities, etc. Buyers; Company or individual employees
• Criteria
• Employees; capabilities, brand
• Company; price, capabilities, provider deals

MARKETING MIX STRATEGIES a) PRODUCT

Variety: In every series of Nokia there are large numbers of sets thus large variety
Quality: Nokia gain brand personality and market shares of 35% because of its quality.
Design: Nokia sets have various designs such as flip sets, Flat sets, Slide sets, Sets with rotating Camera etc
Features: Each set of Nokia has its own features.
b) Price

Prices start from low level to upper all class of people.
Nokia also offer cash allowances it uses skimming price strategy
c) Promotion

Advertising – Through TV, Sign boards, Bill boards, Radio and Newspaper, Broachers, Posters Dummies and display stands
Personal selling – By product training to Distributor (what is product)
Sale promotion – Gift like Yamaha bike, Philips TV, Mitsubishi split AC, watches and digital diary, With N73 mobile offer 2500Rs original Blue tooth free With 6220 offer leather Wallet,
Public relation – Nokia spot light

Road shows – N-gage.com for game lovers, Nokia football crazy.

d) Place

Nokia products are available at Nokia gallery
Established mobile phone dealership such as Car phone warehouse & Link
Retailers like Dixon & other electrical products suppliers

Key Strategic Issues Face Nokia

• Nokia had missed the major change in its market - the Smartphone revolution
• Rapidly declining market share.
• Nokia had continued to focus on mobile phone devices (hardware) rather than mobile phone applications (software)
• The consumer transition from traditional mobile phones to smart phones has been dramatic, and caught Nokia off-guard
• Nokia has faced intense competition from mobile phone producers in emerging markets who can make fast, cheap handsets at the lower end of the mobile phone market
• Poor leadership and complacency (bred from success in non smart-phones)
• The wrong culture - over-consensual; lacking innovation and entrepreneurial spirit
• Complex, overly-bureaucratic organizational structure with poor accountability
• Nokia had become “clogged with bureaucracy”
• Decisions being made within the firm were often cancelling each other out!
• “A series of committees, boards and cross-functional meetings held-up decisions

NOKIA MAJOR MOBILE PHONES SERIES

a) Nokia N series

The Nokia Nseries is Nokia's most advanced smartphone series. It is for people who wish to have advanced multimedia and connectivity features and as many other features as possible into one device.

Phone model Released Phone model Released
Nokia N70
2005 Nokia N85
2008
Nokia N70
2006 Nokia N86
2009
Nokia N71
2006 Nokia N9
2011
Nokia N72
2006 Nokia N90
2005
Nokia N73
2006 Nokia N900
2009
Nokia N73
2006 Nokia N91
2005
Nokia N75
2006 Nokia N92
2007
Nokia N76
2007 Nokia N93
2006
Nokia N77
2007 Nokia N93i
2007
Nokia N78
2008 Nokia N95
2006
Nokia N79
2008 Nokia N95
2007
Nokia N8
2010 Nokia N950
2011

Nokia N80
2006 Nokia N96
2008
Nokia N81
2007 Nokia N97
2009
Nokia N81
2007 Nokia N97 mini
2009
Nokia N82
2007

b) Nokia E series The Nokia E series is an enterprise-class series and includes business-optimized smart phones.

Phone model Released
Nokia E50
2006
Nokia E51
2007
Nokia E52
2009
Nokia E55
2009
Nokia E60
2006
Nokia E61
2006
Nokia E61i
2007
Nokia E62
2006
Nokia E63
2008
Nokia E65
2007
Nokia E66
2008
Nokia E6
2011
Nokia E70
2006
Nokia E71
2008
Nokia E72
2009
Nokia E73
2010
Nokia E75
2009
Nokia E5-00
2010
Nokia E7
2011
Nokia E90
2007

c) Nokia X series
The Nokia X series targets a young audience with a focus on music and entertainment.

Phone model Released
Nokia X2-00
2010
Nokia X2-01
2010
Nokia X2-02
2011
Nokia X3-00
2009
Nokia X3-02
2010
Nokia X5
2010
Nokia X6
2009
Nokia X7-00
2011

b) Nokia Asha series

The Nokia Asha series is an affordable series optimized for social networking and sharing. Operating system used is Series 40

Phone model Released
Nokia Asha 200 2011 Q4
Nokia Asha 302
2012 Q1
Nokia Asha 303
2011 Q4
Nokia Asha 305
2012 Q3
Nokia Asha 306
2012 Q3
Nokia Asha 311
2012 Q3

c) Nokia Lumia series
The Nokia Lumia series is a series running Windows Phone OS.

Phone model Released
Nokia Lumia 610
2012
Nokia Lumia 710
2011
Nokia Lumia 800
2011
Nokia Lumia 900
2012
Nokia Lumia 820
2012
Nokia Lumia 920
2012

References

Wikipedia
Nokia websites
Forbes
Economist
Research Papers, Essays, Notes

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