Abstract

Nokia is a Finland based multinational communication, information technology and consumer

electronics company, founded in 1865. Nokia's headquarters are in Espoo, Finland in the greater Helsinki
metropolitan area. In 2017, Nokia employed approximately 102,000 people across over 100 countries,
did business in more than 130 countries, and reported annual revenues of around €23 billion. Nokia is a
public limited company listed on the Helsinki Stock Exchange and New York Stock Exchange. This case is
selected as per following basis: Case is related with Product innovation and brand equity, Opportunity
for company to re-enter into market, To understand reasons for failure of a business and To justify that
product and brand dies on the same day, but it is not true. Following are the sources of data collection:
Articles and review of students and people and Dr. Vivek Bindra’s videos. Following are the assumptions
of the case study: Nokia will reenter into the market and Sources of Data have right information
Following are the limitations of case study: Few sources of data collection, Lack of market related
information about case and Lack of financial data Problem of this case study is reasons behind the
failure of Nokia to cope up with the current product innovation in the cellular world. Many solutions are
given for problem of case study in this report.
TABLE OF CONTENT
 Introduction
 Background Brand
Brand Profile
Targeted Market
Competitor Analysis
 Academic Theory
 Secondary Research Findings
 Recommendation
 Conclusion
 References
 Appendix
INTRODUCTION

Brand equity refers to a value premium that a company generates from a product with a recognizable
name when compared to a generic equivalent. When a company has positive brand equity, customers
willingly pay a high price for its products, even though they could get the same thing from a competitor
for less. Building brand equity has become a major focus area for marketers. This research is an intent to
explore the declining brand equity of an international company and to understand the reasons behind it
and to suggest the possible recommendations based on the critical analysis.

Nokia is chosen to study and analyze for this research. This case is selected as per following basis:

• Case is related with Product innovation and brand equity.

• There are many opportunities for company to re-enter into cellular market.

• To understand reasons for failure of a business.

• To justify that product and brand dies on the same day, but it is not true
Background Brand
Nokia is a Finnish multinational communication, information technology and consumer electronics
company, founded in 1865. Nokia's headquarters are in Espoo, Finland in the greater Helsinki
metropolitan area. In 2017, Nokia employed approximately 102,000 people across over 100 countries,
did business in more than 130 countries, and reported annual revenues of around €23 billion. Nokia is a
public limited company listed on the Helsinki Stock Exchange and New York Stock Exchange. It is the
world's 415th-largest company measured by 2016 revenues according to the Fortune Global 500, and is
a component of the Euro Stoxx 50 stock market index. The company has had various industries in its
152-year history. It was founded as a pulp mill and had long been associated with rubber and cables, but
since the 1990s focuses on large-scale telecommunications infrastructures, technology development
and licensing. Nokia is a notable major contributor to the mobile telephony industry, having assisted in
the development of the GSM, 3G and LTE standards (and currently in 5G), and is best known for having
been the largest worldwide vendor of mobile phones and smart phones for a period. After a partnership
with Microsoft and market struggles, its mobile phone business was eventually bought by the former,
creating Microsoft Mobile as its successor in 2014

Brand Profile
Title of This Case Is Reasons Behind the Failure of Nokia: Nokia is the one of the successful leader in
mobile phone market and their products are top on selling and Nokia cover larger market share of
mobile phones. When time passes new players enter into the market with new innovations and ideas.
That time Nokia become a heavy loaded truck who runs in saturated road where new players enter with
new innovations and products. New players over take Nokia with its new mobile phones with new
features, Nokia has already very big, so they cannot over take others. Nokia think that no one can beat
them.

Targeted Market
The targeted market consists of particular categories of consumers with different age groups of
individuals. For Nokia, there are likely to be two main reasons; the first is to benefit and the second is to
target customers who need a means of communication. For example, it is mainly aimed at customers
searching for entertainment aged 19-39 years old. Nokia's target group is college students, who are
primarily between the ages of 18 and 25. They are identified as the target customers because the mobile
phone group has great potential. Their high disposable income can be the advantage of Nokia, so we can
see the promise of these future middle classes. Because of the continuous investment in education by
the government, the segment of college students is large enough. The number of college students is
growing exponentially, providing the mobile phone industry with a wide pool of potential target
customers.

Competitors Analysis
The mobile phone industry became more competitive with time and technological innovations. The
leading market competitors of early 90s later grew exponentially were Samsung and apple. Also the
other new brands like Huawei, HTC, MI, Vivo etc. were rapidly growing.
Samsung: SAMSUNG (Group) has maintained a mission statement since its founding in 1938that reacts
both to its own transformation and to new developments in the world. Samsung is evolving at a rapid
pace.

Apple: Apple remains the most valuable brand with an approximate valuation of almost $323billion,
according to the Best Global Brands 2020 list, while Amazon and Microsoft hold the second and third
slots, respectively.

Huawei: In its devotion to creativity and driving value for global customers, Huawei is steadfast. Huawei
is ranked 45th, up two positions from last year in the new Brands’ Top 100.

Current Trends
The mobile phone industry sees technological development at rapid pace. Traditional phones were
transforming into smart phones but Nokia had not changed. It was the initiator of the early
Smartphones. However, in 2002, Symbian smartphones were launched, but the company was unable to
sustain the speed of changing technology. Apple and Samsung both got hold of an outstanding game
plan that Nokia couldn't get. A flagship product has been developed by Apple and Samsung. Every year,
these companies release a new version of these products with additional functions. The consumers and
prospective customers of these brands keep an eye on the latest release until it is actually on the
market. This anticipation of the launch of the latest product with new features would increase the
consumer's interest in the product. This excessive growth over the period resulted in the company's
management choosing between innovations and funding for growth.
Discussion of Academic Theory:
The Nokia Company and its clients in B2B and end-users and users must maintain a respectable
approach to their company impulses. The brand must create a technical differentiation and initiative
based on its core brand competence. Nokia must reinvent the brand, since its achievement is not known
to the young and new audience. Some strategies to reinvent the lost brand equity are discussed below.

1. Market penetration

The market penetration strategy is used by businesses that seek growth for existing products in markets
where their brands are existing, and already operational.

 Increase production capacity

 Increased marketing investment
 Enhanced distribution
 Competitive pricing
 Reduce operational costs
 Acquiring competitors
 Partnerships and joint ventures

3. Market development

With market development strategies, the Nokia Corporation can enhance its business growth through
introducing existing products in new markets. This will be possible for the Nokia Corporation with
different strategies.

 Research and development

 Regional expansion
 International expansion
 New customer segments
 Brand awareness
 Customer education

4. Product development

When a company seeks to expand business growth in existing markets through new products, it is
termed as product development. The Nokia Corporation drives product development in different ways.

 Modifications to existing products

 Launch new products
 Research and development
 Strategic partnerships
 Product quality

5. Diversification
Diversification refers to business growth and development that occurs when a company engages in new
product development in new markets. Diversification is an important and allows businesses like the
Nokia Corporation to remain competent, innovative, and competitive – thereby remaining relevant for
the consumer markets.

 Vertical diversification
 Horizontal diversification
 Diversification towards a new business
 Mergers and acquisitions

Secondary research findings

Analyzing the case data:

Followings are the various reasons behind the failure of Nokia.

1.Nokia moved too slowly

Nokia was a pioneer in the smart phone market, literally introducing consumers to the smart phone
with its initial Symbian Series 60 devices in 2002. For the next five years, Symbian phones had little
trouble maintaining a leadership position in the smart phone pack. "They didn’t make the leap of faith
onto Windows Phone until 2011. Now they are suffering from their slow response." – Wayne Lambut

2. Lack of Strategic plan

Both Apple and Samsung got the hold of the excellent game plan, which Nokia could not manage to get
Apple and Samsung have created a flagship product. These companies release a new version of these
products every year with additional features. The customers of these brands and the potential
customers keep an eye on the new release along before it is actually in the market.

3. Nokia didn't have the panache

Consumers, especially in developing markets, associate the Nokia name with a different era of
technology. And in today's world, having the newest and shiniest device is what matters. "Nokia was
sort of an older brand; there wasn't a new panache to it.

4.Complacency/satisfaction
As a market leader for over a decade, Nokia didn’t really plan for the future as it seemed a bit
complacent with its products. When Apple launched the iPhone in 2007, the first touch phone, Nokia
was still priding in its E-series by when the definition of smart phone had undergone a tremendous
change. That was least expected from the pioneer in the smart phone market.
5.Lack of product innovation
While Samsung comes up with new phones almost every year with a slight modification from the
previous launch, Nokia’s Windows phone which came in 2011 lacked some basic technology essential to
drive its sales. Nokia’s Lumia series was launched with a bang, but didn’t click. Reasons can be its design,
which wasn’t as attractive as Samsung phones or the iPhone.

6.Failure of Symbian OS and wrong deal with windows

Nokia launched its Symbian 60 series in year 2002 which initially had a good market response but with
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 are lack of applications and UI (User Interface).
After facing competition from iOS and Android, Nokia continuously tried to improve their Symbian OS
but it was mostly following the UI of Android and iOS and was not creating something unique. Secondly,
the company failed to look into the need of available applications in gaining market share.

7.Losing market share on both ends

Nokia not only failed to realize competition from Apple, Samsung, Sony, and Blackberry in high end
smart phones, they also failed to notice the stiff competition in the lower segments of phones. Where
Nokia was losing charm in high end phones, the competition from Micromax, HTC, Huawei and ZTE
squeezed the company’s market share in lower segment too. This led to double trouble for the
company. The company which used to have epic models like Nokia 1100 suddenly started losing at lower
ends too. Very lately company realized this thing and launched their Asha series but by that time they
had already lost the game.
Reccomendations:
1.360 analysis of market and company

Nokia should analyze current market situation and trend in market; also they make 360 analyses of its
own. Nokia should analyze all aspect regards current customer need and demand.

2. Be a fast mover

Nokia firstly remove myopia i.e. threat to change, and be a fast mover in industry by different ways to
survive in industry.

3. Increase product Innovation

Innovation is a key to survive in the market for a Nokia. If Nokia wants to recover it market and position
in India, they require increasing innovation activities. Through new innovation Nokia able to creates its
old brand image in customer’s mind. There are different sources of innovation like customers, suppliers,
competitors etc.

4.Convert feed back into value

One of the important solutions for Nokia is to convert customers feed backs into value, i.e. if customers
are not satisfied with anything, listen their problems and try to solve it.

5.Implement right umbrella brand strategy

Nokia have different products with its brand name. But they not properly adjust their products in
umbrella brand. So Nokia wants to implement right umbrella brand strategy

6.Retain customer base is main goal of company

Customer is a person who purchases your product. Without customers you don’t operate your business
in day. Nokia aim to retain customer base for growing in market.

7.Build a unique business plan and marketing strategy

Business plan and marketing strategy help to implement your plans regard to achieve company goals.
Marketing strategy includes marketing mix. For Nokia marketing mix strategy is very important for come
back.
CONCLUSION

Nokia have an opportunity to re- enter into the market with strong manner. Also they have different
ways to solve their problems and issues and come back again with its solutions. Nokia have threat to
changes and it is the biggest reason for its failure in market. Also there are others reasons which effect
on Nokia failure. There are many solutions and ways given in this case study by researcher which helps
Nokia to overcome its problems and issues.
References
[1] Dr. Vivek Bindra’s Videos

[2] http://www.ciol.com/three-reasons-nokia-failed/

[3] https://www.linkedin.com/pulse/nokia-failure-story-ibrahim-abd-elaziz

[4] https://www.wired.com/2012/04/5-reasons-why-nokia-lost-its-handset-sales-lead-and-got-
downgraded-to-junk/

Appendix
Nokia's sales volumes are seen in the first graph, both in emerging markets (China, Asia Pacific, Middle
East, Africa and Latin America) and in their overall sales volume. It should be noticed how much of their
market volume was actually distributed in developing countries. Interestingly, in developed countries
(Europe and the US), where the organization lost 47 percent of its volume from 2008 to 2012 compared
to 22 percent in developing economies, the fall is much steeper.