Prepared By:

Komal (021)
Heena Rajora (024)
Annu (030)
Richa Sharma (035)
Pooja Rana (075)

Industry: Telecommunications equipment, internet and computer software

Founded: Tampere, Grand Duchy of Finland (1865). Incorporated in Nokia (1871)

Founder(s): Fredrik Idestam, Leo Mechelin

Headquarters: Espoo, Finland

Area served: Worldwide

Key People: Risto Siilasmaa (chairman) & Stephen Elop (president & CEO)

Products: Mobile phones, smart phones, mobile computers, networks

Services: Maps and navigation, music, messaging, and media software solutions

Revenue: $30,176 billion (2012)

Operating income: $2,303 billion (2012)

Net income: $3,106 billion (2012)

Total assets: $29,949 billion (2012)

Total equity: $8,061 billion (2012)

Employees: 97,798 (2012)

Divisions: Mobile solutions, Mobile phones, Markets

Subsidiaries: Nokia Siemens Network (50.1%), Navteq

Nokias vision is simply

Connecting People

Our strategic intent is to build great mobile products our

job is to enable billions of people everywhere to get
connected.

To build great mobile products

To help people feel near to what matters to them

To enable billions of people to more of lifes opportunities through

mobiles

To capture volume and growth to connect the next billion people

to the internet in developing growth markets

Nokia corporation has created an alliance with the Microsoft

Company through which it has gained the opportunity to launch
new mobile phones in the market which would be based on
Windows 7 operating system.

Nokia corporation has basically adopted the strategy of New

Product Development and Horizontal Integration Strategy
through which Nokia corporation plans to launch new mobile
phones which already has a great acceptance in the world to
compete in the market against other mobile manufacturers in the
world.

Strengths
Nokia worlds largest producer and manufacturer of cell phones as
well as has the largest distribution network around the world.
It is also known for the Creativity, Innovativeness, durability &
reliability.
It has very good financial position, higher return on equity(ROE),
return on assets (ROA) and net profit margins (NPM)
Nokia sharpen focus on business customers
Nokia has a Strong R & D facilities.
Nokia also possessing the all fashion strategies and four style new
generation characteristic from manufacturers
It has diverse work force and advanced technology.

Weaknesses
It has declared its profits had dropped by 40 % in 2010.
Nokia mobile phones prices are higher as compare to the prices
of china mobiles handsets.
Nokia presence in the US cellular industry is very low and in
Japan it has very weak position.
In India Nokia has few service centers and very appalling after
sales service
In Japan Nokia closed the mobile handset distribution and also
canceled the distribution of E71 handset due to low market
preference.

Opportunities
The global cell phone industry expected to grow by double digits
Today, Asia-Pacific mobile phone industry is one of the fastestgrowing industry in the world.
Developing countries like China, Bangladesh, India and Pakistan has
enormous demand potential.
Nokia had a 50-50 joint venture with Siemens of Germany
Youth wants the stylish aesthetics, fashionable handsets, it drive the
new market for players.

Threats
Consumers are becoming more complicated in the choice of
handset due to new styles by china mobiles.
Difficult for sellers to differentiate their products and retain
loyalty.
Nokia is facing very strong price pressure from china and other
mobile producers
Nokia is losing global market share after the arrival of several
Chinese producers
In the Asia/Pacific emerged competitive forces.
Apple, RIM and the other different sellers have created strong
pressure for Nokia

VALUE CHAIN ANALYSIS

OF NOKIA

Given by Michael Porter in 1985.

It explain how the firm create the competitive advantage and value
after some specific activities which deemed as value-adding
process.

It was spited into two parts in Porter's Value chain mode and they
are

"primary

activities"

and

"support

activities".

Primary activities" include following steps:

1. Inbound logistics
2. Production/operation
3. Outbound logistics
4. Sale and marketing
5. Maintenance

Inbound logistics:
The firm receive the goods from the supplier and stored them
until firm need on production or assembly line.
Production:
Where goods

are

manufactured

and

assembled.

Outbound logistics:
Goods are finished and ready to send to wholesaler's, retail
sellers
or
customers.

Sale and marketing:

The firm try to meet the targeted customers needs with
sort of

marketing communication, promotion mix.

Maintenance :
Different kinds of service such like: deliver, install ,after

sell

service

and

so

on.

After the "Primary activities" are "support activities" that also the

value-adding activities to the origination. The "Support activities"

are known as :
1. Administrative infrastructure management

2. Human resources management

3. R&D
4. Procurement

Administrative infrastructure management:

The activities are driven by the corporate strategy
Human resource management:
Human resource is expensive and vital resource and any firm
need
take
care
and
respect
their
staff.
R&D (Research and development):
The innovation in any corporate is necessary thing that the
firms need reduce the cost of sell and create competitive
advantage.
Procurement:
The aim is to secure the lowest possible price for purchases
of
the
highest
possible
quality.

Nokia's PESTLE
Analysis

POLITICAL FACTOR:
In 2007 it was reported that Nokia spent $5,4 million
on lobbying in the U.S. and $2 million on lobbying in
2008
ECONOMIC FACTOR:
Nokia had to change its functions from single
market to global market
SOCIAL FACTOR:
Nokia has been a member of the United Nations
Global Compact since 2001

TECHNOLOGICAL FACTOR:

Substantial improvement and rapid Change in

technology

LEGAL FACTOR:

Patents right and copyrights on technology

ENVIRONMENTAL FACTOR:

Great awareness of environmental ethics

amongst suppliers.

Porters 5 Forces Model

SUPPLIER POWER
MODERATE
Supplier concentration
Relative bargaining
power

THREAT OF ENTRANTS
LOW
Capital requirements
Economies of scale
Product differentiation
Access to distribution
channels
Legal/ regulatory barriers

COMPETITIVE
RIVALRY
HIGH
Motorola, Sony ericcson
Diversity
Intense Advertising

BUYER POWER
HIGH
Buyers price sensitivity
Relative bargaining
power

THREAT OF SUBSTITUTE
PRODUCTS
LOW
Buyers propensity
to substitute
Relative prices &
performance of
substitutes

The mobile phone industry is already a well established market and

the threat of a new entrant is quite low

The technology needed to rival the devices already available is quite

advance if they want to differentiate from them.

The barriers to entry in the mobile phone industry is high because

any new entrants will need high investments in R&D, technology and
marketing in order to compete with the established organisations.

Supplier concentration : Nokia suppliers for hardware components

are not concentrated

High differentiation of inputs : Nokia does not depend on a key

equipment manufacturer

Low bargaining power of suppliers : Strong position of Nokia when

bargaining with suppliers

Impact of Microsoft as a Strategic Partner and as a Supplier

Low Buyer inclination to substitute: Mobile phones have become

necessity for everyday lives of people and its hard to replace with
any substitute products.

High switching costs

High price-performance value: The idea of being in constant

communication with someone at anytime and anywhere makes the
mobile phone a very important device to people and the perceived
value by user (price-performance) ratio is very high.

Increased price sensitivity: With a lot of the Nokia competitors all

offering similar packages (e.g. unlimited texts and calls) the industry
is very price sensitive with customers seeking out the best value for
money.
Increasing Buyer volume: The continued fall in handset prices in
most segments, notably smartphones, with devices with greater
capabilities now available at a lower price point have also lead to
increase in consumer volumes.
Many of the consumers are tied into long term contracts so switching
from one handset to another will be difficult and expensive for the
consumer, as a result they may not want to change until the contract
is finished.

Nokia rivals have moved to smart phones and androids while Nokia
have only just recently released their first smart phones leaving them
trailing their rivals such as Apple and HTC.

There is also very little differentiation between the competitors

which means any new smart phones in the market, like Nokia Lumia,
will find it difficult to tempt existing iphone and HTC customers to
switch.

Intense competition from large companies such as; Apple, HTC,

Blackberry, Sony Ericcson and LG, ect.

Profitable growth
Improving its operating model
Increasing focus on smart phones and feature phones, including
an increased emphasis on location-based services.

Invest strongly in products and experiences that make Lumia

smart phones stand out and available to more consumers;
Invest in location-based services as an area of competitive
differentiation for Nokia products and extend its locationbased platform to new industries; and
Improve the competitiveness and profitability of its feature
phone business.

"We

are increasing our focus on

the products and services that
our consumers value most while
continuing to invest in the
innovation that has always
defined Nokia," said Stephen
Elop, Nokia president and CEO.

Planned acquisition of assets from Sweden-based

Scalado, which currently has imaging technology on
more than 1 billion devices. This acquisition is aimed at
strengthening Nokia's imaging assets.

Nokia plans to differentiate its portfolio of Lumia smart

phones with leading location-based services including
navigation and visual search applications such as the
recently announced Nokia City Lens.
Additionally, the company plans to extend its mapping
technology to multiple industries to strengthen the
platform and generate new revenue

In Mobile Phones, Nokia intends to improve its

competitiveness and profitability.
Nokia aims to further develop its Series 40 and Series 30
devices, and invest in key feature phone technologies like
the Nokia Browser, aiming to be the world's most data
efficient mobile browser.
Early results of this innovation can be found in Nokia's
latest Asha feature phones which offer a full-touch
screen experience at lower prices.

As part of these planned changes, Nokia will closely

assess the future of certain non-core assets.
In line with this, Nokia announced plans to divest Vertu,
its luxury mobile phones business to EQT VI, a European
private equity firm.

Reductions within certain research and development

projects, resulting in the planned closure of its facilities in
Ulm, Germany and Burnaby, Canada;
Consolidation of certain manufacturing operations,
resulting in the planned closure of its manufacturing facility
in Salo, Finland.
Focusing of marketing and sales activities, including
prioritizing key markets;
Streamlining of IT, corporate and support functions; and
Reductions related to non-core assets, including possible
divestments.

To execute this strategy, Nokia is making changes to its

management team by tapping into the strong leadership
bench at the company.
Significantly reducing its Device & Services operating
expenses, substantially reducing its headcount and reducing
its factory footprint.