TABLE OF CONTENTS

EXECUTIVE SUMMARY
1 INTRODUCTION
1.1 COMPANY HISTORY
1.2 NOKIA`S CHANGE IN FOCUS BETWEEN 1988 AND 2000
1.3 PEST ANALYSIS
2 RESEARCH ANALYSIS
2.1 SWOT ANALYSIS
2.2 ENVIRONMENT POLICY AND TECHNOLOGY DEVELOPMENT IN
THE FUTURE
3 CONCLUSION
4 RECOMMENDATION
5 REFERENCES
5.1 BOOK
5.2 PERIODICAL
5.3 WEBSITE
6 APPENDICES

Executive Summary

This report analyses the impact oI external an internal inIluences on the business strategies oI
Nokia Corporation, evaluats the Iactors, modiIers oI Nokia`s advancement, and also considers
the environment policies, and technology development in the Iuture.

Analyzing current business situation shows that Nokia needs to:

DiIIerentiate its products capability between old and new category.
Enhance its products with computer IT compatible, Iocusing on new technology users.
Maintain its price reasonably.
Follow, practice and promote its environment policies.

The purpose oI this report is to evaluate how successIully does Nokia advance its
products. Due to the modern trends oI social development, whether Nokia`s
environment policy is accurately operated or not will be related to improve its
reputation. In addition, the grow oI mobile terminals leads Nokia to modiIy its
changes, thereIore, Nokia has to develop new technology to approach to a new
market, which combine with PC market not only to occupy the position in mobile
phone market. Moreover, to connect PC and mobile phone is a tendency in mobile
phone market, even though to combine these two products together. Because oI this
trend, Nokia creates new products to match with the market.

The result oI the report Iinds that Nokia does not only want to occupy the position in mobile
phone market, but also to base on its technology development to approach to the PC market. In
addition, Nokia should not only develop new technology, but also has other responsibilities Ior
human, such as to reduce pollution and waste, which are produced by the process oI production.

1 Introduction
In present years, the mobile Internet has attracted numerous media attention. We know need to
consider why it is important to creative new products oI mobile market, what does consumers
need, and what kinds oI social activities change aIIected Nokia change its main starching.
In this report, it is important to Iind some inIormation Irom Nokia`s background and to analysis
Nokia`s Iurther decisions in the Iuture. Focus on Nokia`s strength, weakness, opportunity,
threat, environmental policies and technologies development, to know more about Nokia`s vision
and action in the Iuture.
Company History
At beginning, Nokia was a manuIacturer oI paper in 1865. It had a dramatic changes in last
centary. (Nokia, 2002) AIter World War II, the require oI industrial products were increased
substantially.(Liu, 2001) Nokia had change its Iunction to an industrial enterprise and produce
industrial products, such as chemicals and rubbers. Untile 1960s, Nokia had set electronic
department, and Iocused on develop transmission systems, this was the Iactor that Nokia became
a Iamous company in the world.
Nokia's change in focus between and
Business (1988) OI sales Survived Business (2000)
Floorings 1 No Transmission systems
Chemicals 2 No Fixed networks
Machinery 4 No Access networks
Electrical wholesale 4 No Wireless/mobile data
Mobile telephones 5 Yes Tetra networks and terminals
Telecommunications 5 Yes GSM networks
Rubber 6 No Smart traIIic products
InIormation systems 23 No Multimedia
Cables 9 No Internet
Paper 10 No Digital exchanges
Consumer electronics 31 No Mobile phones Base stations
Source: Merriden, T. (2001), Business the Nokia Way, overview, pp Xiii
Background (PEST AnaIysis)
In the case oI Nokia, it can be classiIied as international organization. It basic Ior global brand,
which is required to Iocus on macro environmental Iactors, such as Nokia. Macro environmental
Iactors comprise Political, Economics, Society, and Technology, viz, PEST Analysis. It is
necessary Iorce that Nokia has to concern and know what is happening in the other countries at
the moment. Because there are diIIerent culture and diIIerent external Iactors between diIIerent
countries, Nokia has to adjust its strategic plan in order to develop international market.

1.3.1 Political
It is important oI a company to acquire resources Irom government, such as economic policy,
and science and technology policy. The success oI Nokia has obtaine the resources Irom Finnish
policies which assist Nokia to advance its products. As Zheng (2001) has observed:
1he Finnish policies are the most important factors of Aokia. 1o operate efficiently, a modern
knowledge- and technology-based economy that is highly specialized, internationalized and
undergoing rapid structural change requires active support from the public sector. In its
widest sense industrial policy and science and technology (S&1) policy comprise all those
measures by which the public sector shapes the operating environment for business and thus
fosters public welfare. Both policies ursued by Finnish government and Parliament are
crucial for the development bothe of the Finnish Economy and of national information
society.

Finnish government best facilitate the efficient functioning of the economy by directing its
resources to the reduction of market failures. 1he state must also pursure an industrial and
economic policy that provides a stable macroeconomic environment for enterprises. Ceneral
macroeconomic stability, low interest rates, stable currency conditions and the international
competitiveness of the tax system form the foundation for the growth of business an
improvement in employment.
As the result oI this, not only Finnish Government but also international companies, such as
Nokia, have play very important roles to develop their inIormation society and national
technology strength.

1.3.2 Economic
According to the Iact that Russian Federation was collapsed in early 1990s and it assaulted with
Finnish economics (OECD, 1996). Nokia also Iace with the problem, and changed its Iunctions
Irom single market and overall products to global market and Iocusing mobile phone market.

1.3.3 Society and Technology
In the 1980s, people trend to microcomputers and Nokia try to match the tendency to produce its
main products, such as computers, monitors and TV sets.(Merriden, 2001) According to the
changes in 1990s, Nokia also changs its Iunctions to mobile phone market. Nowadays, the
global market trends to connect PC and mobile phone, even though to combine these two
products together.

On the other hand, one important Iuture challenge oI Nokia is to estblished its policy to Iollow
up the environmental policy and science and technology policy oI the Finnish Government. As
Zheng (2001) has report:
Substainable development and environmental protection have various effects on the operation
of the innovation system. Innovation also creates new opportunities for promoting
sustaainable development. 1he markets for environmental products are expected to grow
rapidly in the near future. 1he Finnish government offers goods facilities for taking this
opportunity. Aational and European reforms arising from environmental objectives influence
the perequisites from innovation. [Aokiaj must be used to find solution which help to
implement environmental objectives as well as the objectives of innovation policy in a
balanced way.(Science and 1echnology policy council of Finland, 199)
To sum up, the main reason oI Nokia has success to advance its products are the policies and
technology development oI Finnish Government. It can not be separate between Nokia`s
successIul oI advance its product and Finnish Government`s policies, both oI Nokia and Finnish
Government are the winner in the international market. Nokia has obtain the success oI mobile
phone market, and Finnish Government has establish its position oI technology development.

2 Research analysis
2.1 SWOT Analysis
Strength and weakness analysis can be deIined as internal Iactor in order to show how well they
are perIorming inside the company at a moment. In case oI Nokia, there is much strength where
it was success in its company, whereas weakness point has only one where it was inevitable Ior
high price- high quality. Clearly, the business does not have to correct all its weaknesses,
however it should retain its strength as long as they can. In the same way, they do have to
research and develop their company continuously in order to achieve the goal.

In contrast, the opportunity can be classiIied because oI their attractiveness. The key success
requirement Ior operating in the target market is basically depended on the external Iactor
(opportunity). In case oI Nokia, it has numerous opportunities to be able to enlarge their market
share. Conversely, Nokia still have threat, which mean a challenge posed by an unIavorable
trend or development that may lead into the absence oI deIensive marketing action, to diminish
in sales and gross proIit. Consequently, Nokia have to create more strength and opportunity,
then it needs to correct its weakness and threat as well.

2.1.1 Strength
lobal marketing (product)
Nokia is the global product so it is undoubted true that its products should be at least passed
worldwide qualiIication, viz, ISO. This is the reason oI why Nokia can be entrust around the
whole world.

igh product quality
Nokia concerns about product quality, which is the most important Iactor to satisIy customers`
needs. Nokia adds more values by superior quality or diIIerentiated Ieatures to the market. In
the meantime, Nokia still produces the products with high quality and continuously improve to
the particular market.

ashionable product (serve new trend )
'The rise in number oI users by 700 million in a little over three years will be driven by a huge
rise in the number oI young style conscious users (Nokia, 2002). That is the reason why they
have to serve Ior young people who use their mobile Ior text messaging rather than phone call.

Wide range of product
Based on the contemporary data (see appendices),, it can be determined that Nokia has the
highest number oI product line compared to its competitors (more than 10 models) accordingly;
it covered every class oI people Irom (low to high class). Comparing data with Ericsson,
Motorola, Sony, Samsung, siemens and other companies. (see appendices), it illustrates that
other brands have narrow shape oI product lines (not more than 5 models per brands).

Product warrantee worldwide
No matter where Nokia`s customers are, iI they got a problem Irom Nokia`s mobile phone. OI
course, they can use Nokia service worldwide wherever Nokia centers are. These can ensure
customers who worried about service system.

2.1.2 Weakness
igh price
AIter compared the price between Nokia and others, it can be established that Nokia has highest
price in every type oI its products. In this report it can be conclude that Nokia still have a weak
point as higher price than the competitors. (See appendices)

2.1.3 Opportunity
Product launch continuously
In this report it has determined that Nokia uses Total Quality Management (TQM) which
mentions more about training worker program, and makes the higher product quality. All
employees are well-trained and motivated consecutively aIterward production processes also
developed as well. In addition, as Merriden (2001) claims that Nokia established Research and
Development department (R&D) where develops its product line into modern modiIication as
well quality as the existing products.

&sers Availability
Nowadays, the business has steadily recovered during this period so that there are so many retail
stores where it grew up continuously in London. Especially mobile phone retail stores, such as,
the link, Phone4U and Carphonewarehouse, which is spread around London in every
street. And, oI course, every stores have not missed the opportunity to choose Nokia as their
product line. Consequently, all the customers can be guaranteed that any damaged or loss oI
Mobile phone will be service through those retail shops. Likewise, in opportunity aspect, Nokia
has an opportunity to convince the prospects to buy Nokia in those plenty oI stores around the
town. However the key to success oI Nokia will be services that are relevant with Ilexible
changing capabilities.(Nokia, 2002)

Necessary Product or People Now
In recent years, businesses are involving among the downturn session, then every people are
more concerned about business. Especially, time is speciIic in rush hours. As a result oI this,
mobile phone has become a popular device Ior everybody in the world now, especially Ior
businessmen who really need everything in advance during speciIic time because time is money
Ior them. Certainly, mobile phone has already become a necessary device Ior every ultimate
user nowadays. And both Nokia and Ericsson have Iorecasted that number oI global mobile
phone subscribers would increase Irom the current 300 million to a billion by 2003.(Merriden,
2001)

New Software Market
ReIerring to the amount oI data traIIic in mobile networks is growing at a tremendous
rate. People around the world are using new mobile services, which is directly relevant to
personal needs. DeIinitely, it can access anytime, anywhere and, oI course, the innovative are
Iully provided to customer`s Nokia. And nowadays Nokia has already added value through
MMS Ior Messaging and E-mail, Java Ior download any applications and HTML especially Ior
content search. So it may attract those businessmen and teenagers who are interested in the new
soItware market.(Nokia, 2002)

oint Venture In Technology
It is be known that, Nokia has already joint with Hewlett Packard (HP) Company; it has a well
reputation about computer programs Ior many years. As a result oI this, Nokia has a
considerable opportunity Ior enlarge their market size into PC user who preIers mobile phone
compatible with PC device as well.(Merriden, 2001)

2.1.4 Threats
Obsolete about PC tools if compare with new comers who have more specialize on PC
tools
Due to Iierce competition in mobile phone amarket nowadays caused new technology
compatible with PC computer such as, SonyEricsson which specialize on PC computer
now. Sony applied their computer system into mobile phone as well as PC computer on hand at
the same time. Furthermore, nowadays people are interested in advance oI computer as similar as
mobile phone market.

It is importat that most companines has move on the PC connected and try to bread into the PC
market. People want to use mobile anywhere and want to connect Internet, thereIore to own or
to corporate with a Internet Network Service company is the chance to join into the new PC
market.

2.2 Environment Policy and Technology Development in The uture
2.2.1 Environment policy
Nokia`s slogan is 'Technology is connecting with people, which is explained that Nokia
respecte humen`s needs. Because oI this reason, Nokia is dedicating to Iollow environment
policy, including environmental design, supply Ior network management, systems oI
environmental management, and recycle practices. This has became an important part oI
Nokia`s corporate culture. Indeed, Nokia had guarantee to improve in environmental issues and
had been published in 1994. ThereIore, Nokia has Iour dimensions oI environment
policy.(Nokia, 2002)

Environmental Design
Design Ior Environment means to consider the environmental system into the development oI all
products, processes and services. It involves design processes that minimize material and
consume with energy while maximizing the prospective Ior reuse and recycling.

Supply for Network Management
Nokia set oI environmental requirements Ior its suppliers strictly. The process Ior a Nokia
supplier included environmental assessment.

Systems of Environmental Management
With ISO 14001 and certiIied environmental management system (EMS), which is to reduce
energy consumption and improve waste management, Nokia has not only improved its
production processes but also enhanced employee trainings. In addition, the suppliers oI Nokia
have been also required to Iollow the same rules. Indeed, Nokia has practice the environmental
issues and reduced costs.

Recycled Practices
Nokia claimed that it has operated recycled practices, such as energy returns and materials back
to circulation. According to these environmental policies, it is debatable whether the
environment policies oI Nokia work. Actually, Nokia has promote its products but does not
promote its environment policies. Nokia has produce new products to the mobile market, but
sometime, these products have diIIerent Iunctions and diIIerent components, such as
batteries. Although, Nokia develops recycled batteries, but while customers change diIIerent
type oI mobile phones, the batteries can be used. Nokia wants to promote new products and the
same systems oI componets but the promotion activities do not work to reduce the wast oI
natural resources. Indeed, there is a conIlict between the environment policies and promotion
activies oI Nokia.

2.2.2 Technologies Development In The uture
Generally, Nokia always improve their product line through Research and development process,
beside this Nokia also has multimedia compatible improvement with mobile at the same time,
such as, GPRS and WAP Service. Nokia has numerous technologies which can satisIied those
end-users need, such as, Bluetooth, Symbian, SYNCML, M2M, Wireless LAN and Java.
Research (see appendices) and development can ensure that it stays ahead oI the existing
products, which seen to be shortening liIe cycles oI product.(Marriden, 2001) And Nokia
employed more than 17,000 people in R&D department over Iourteen countries
worldwide. Moreover, Nokia do not only mention on product. Nokia also provided customers
to choose the Ieatures and service that they personally want and need. It means Nokia does not
develop only their product line, but they improve their service process to provide the most
appropriate service to those customers eIIiciently. (Research and Development also included
in technology development)

3 Conclusion
It may be argued that brand extention Iollowing the stretching path may be too absurd. Crainer
(1995) said, building business through elasticity may cause risks to disperse the power oI a
brand, and to inIluence consumers` loyalties. However, Nokia has been successIul at brand
stretching Irom a paper manuIacturer to supply mobile phones and network service.

This report has argued about the kind oI technology consumer need. 'How to promote the Iuture
oI phones?(BBC, 2001) Nokia has already joint with Hewlett Packard (HP) Corporation
Company. As a result oI this, Nokia has a considerable opportunity Ior enlarging its market size
into PC users who preIers mobile phone compatible with PC devic. In Iact, Nokia has
established some types oI mobile phones that are similar with handhold PC, like Nokia 9210, or
Nokia 9110. These kinds oI mobile phone have diversiIied Iunctions, such as colour screen,
connecting with Internet, and interacting with PC soItware. For instance, Nokia 9210 and Nokia
9110 consist oI MicrosoIt Word, MicrosoIt Excel, and MicrosoIt Power Point and other PC
soItwares. (Nokia, 2002)

However, Nokia does not promote these kinds oI product deeply and widely. It seems that
Nokia can not successIully join into the new market. For example, comparing with other brands`
mobile phones, Nokia is more expensive than its competitors. Moreover, based on the limited
technological resources, Nokia can not improve its technology to attach with new PC age. For
example, a comparation between Nokia and Sony in terms oI technological development is that
Nokia has less abilities to develop high technologcial mobile phones which combine with PDA
or computer than Sony. In addition, Sony also has combine with Erisson to produce mobile
phones, and to improve its technological development.

Finally, the environment policy is also one oI the most important business strategies Ior Nokia,
but it seems does not be operated well. For example, Nokia develops recycled batteries, but
while customers change diIIerent type oI mobile phones, sometimes the batteries cannot be
used. Although, Nokia is successIul in saling new products, and building consumers`
loyties. There is a conIlict between the environment policies and promotion activies. Nokia, oI
course, has responsibilities to change its promotion and development plans.

Recommendation
Nokia Company can be classiIied as market leader hereunder mobile phone market, and it can be
easily observe their wide range oI product which may be too oIten to change its model within
one series e.g., Nokia 3210 until now Nokia 3350. Despite the rapid change in one series, it still
looks quite similar as the old model which has just launched in the short period beIore. Because
oI this problem, in this report it recommens Nokia to launch the product timely, and Nokia
should have product liIe- plan (speciIic time table) in order to inIorm and ensure the end-users
who need to buy a really new model. Nobody in the real world is willing to buy the product,
which is going to change and obsolete in the next Iew days. These can be helping Nokia in the
aspect oI customer`s satisIaction and give the chance to the users to select.

On the other hand, Nokia has already become a partner oI Hewlett Packard i.e. HP where they
specialize at computer tools, so it was a good chance Ior Nokia to compete with the new
competitors who specialize at computer, such as Sony, Samsung and other companies. However,
Nokia mobile company is too strong Ior Sony and other new comers to Compete with it. In this
report it recommens Nokia to take this emerge opportunity to come over those competitors,
because Nokia & HP are strong enough to be the market leader as well as it was doing now. Due
to this Iactor, Nokia has highest price range compares with all brands; we can just recommend
Nokia that iI price is Iloated unreasonably to the end-users, it is not the good way Ior Nokia to
achieve a long term goals. Reasonable price is the best way Ior Nokia to gain both proIitable and
customer`s satisIaction.