nokia"s fall down

2.  Nokia Corporation is a Finland based multinational company
 Headquarter -- Keilaniemi, Espoo, city neighboring Finland's
capital Helsinki.
 CEO -- Olli-Pekka Kallasvuo
 Chairman -- Jorma Ollila.
 Founder -- Fredrik Idestam in 1865.
 Nokia started as a pulp, rubber and cable manufacturer

5. Founded as a paper mill in Finland by Fredrik
Idestam
NOKIA CORPORATION
Nordic Mobile Telephone (NMT) launched
Telecommunication branch ‘Nokia-Mobira Oy’
formed
Mobira Cityman, 1st handheld NMT phone launched
Jorma Ollila becomes President and CEO of Nokia
1st GSM handset, Nokia 1011, launched
HISTORY

6. Number of mobile subscribers in INDIA has crossed the 250
million mark.
Mobile phone production in India was expected to grow
from 51 million units to 110 million units by 2011.
• Handset Market Share
 Nokia: 49.5%
 Sony: 10.1%
 Samsung: 12%
 Motorola: 9.9%
 Others: remaining

7. MARKETING STRATEGIES NOKIA…
Focused on Handset Manufacture only
Enhance Product Portfolio
Increase Distribution Channels
Adjust Preferences for specific markets
Customer Satisfaction
Focused on Replacement
Increase Commitment to Emerging Market
Improve Collaboration on Designs
Ensure Accountability and Quality
Aggressive Pricing

8. Macro Enviroment of NOKIA
POLITICAL FACTOR:
ECONOMIC FACTOR:
SOCIAL FACTOR:
Nokia has been a member of the United
Nations Global Compact since 2001
Nokia reported spending $5.4 million on lobbying
in the U.S. in 2007 and $2 million on lobbying in
2008.
Nokia had to change its functions from single
market to global market due to collapse of
Russian Federation.

9. TECHNOLOGICAL FACTOR:
LEGAL FACTOR:
Patents right on technology
ENVIRONMENTAL FACTOR:
Environmentally ethical considerations
amongst suppliers.
Life cycle impact of NOKIA throughout the
supply chain
Improvement or Changes in technology
Macro Enviroment of NOKIA

10. SEGMENTATION STRATEGY
 Geographic:
o Nokia immediate geographic target is
rural India.
o The total targeted population is
estimated at 100 million.
 Demographic:
o Male and female.
o Ages 25-50, this is the segment that
makes up 80% of the Nokia mobile
phone market

11. CONSUMER BEHAVIOUR
Cultural Factors
Social Factors
Close family relationships
Saving-oriented mentality
Need for communication
Need for low end mobile
phones
Personal
Factors
Status symbol
Family & friends
Age & occupation
•Students
•Working Professionals
•Housewives

12. POST SALES BEHAVIOUR
 Availability of service centers
 Online applications and applications stores
 Nokia Ovi Suite
 Nokia PC Suite
 Nokia Beta Labs
 Symbian OS
 Software upgrades
 Resale value

13. PSYCHOGRAPHIC SEGMENTATION
High Involvement
Low Involvement
Rational Aspirational

15. MARKETING MIX
PRODUCT
Classification of products based on:
Use
need
price
LIVE
CONNECT
BUSINESS
LIFESTYLE
Messaging
FM
 Ringtones
Color Screen
 Alarm
MP3
Camera
Bluetooth
GPRS
 Push mail
services
Mobile business
solutions
 Quick Office
 Call
conferencing

16. Nokia 1100
• SEGMENT - Low end basic phone
•TARGET GROUP - Lower class (first time users)
•POSITIONING - Highly reliable & durable
phone for working class India
•World’s best selling model- sold 250 million
phones
Nokia 5800
• SEGMENT - Mid-range multimedia phones
•TARGET GROUP - Young Generation from middle &
upper-middle class
•POSITIONING - device for the music crazy
customers.
•In 2008, Navigation Edition was released which
positioned it as much more than a music phone
with maps, navigation features, car charger and
car kit
Nokia E72
• SEGMENT - Mid-high end Business-cum-Smart
phones
•TARGET GROUP - Business professionals aged 25 -
50 with upper middle class incomes
•POSITIONING – Business phone to serve needs of
working professional + good multimedia support
Nokia N8
• SEGMENT - High End Smart Multimedia phones
•TARGET GROUP - Young Generation from the
upper middle class
•POSITIONING - device packed with must have
features like vibrant GUI, music, connectivity,
photography, games etc
PRODUCT

17. PRICE
MARKETING MIX
Penetration
Pricing
Price
Skimming
Low end phones
High end phones
Price wars leading to lower
profits
Higher demand for advanced
features

18. MARKETING MIX
 Nokia has the largest mobile distribution network of
1,30,000 outlets
 Nokia ‘Concept Store’ setup in 9 major cities across India
to enhance customer experience
 Nokia Priority Dealers setup in all Tier- 1 and Tier- 2 cities
 Multi-brand stores like The Mobile Store, Hot Spot, Big C,
etc
PLACE

19. MARKETING MIX
 Below the line marketing
 Brand Ambassador Priyanka Chopra / Shahrukh Khan
 Digital marketing through social networking sites, mobile sites,
blogs, etc
 Extensive TV campaigns and Advertisements in regional languages
 Made For India advertisement for Nokia 1100
 The Har Jeb Mein Rang Advertisement Campaign
 Main sponsor of Kolkota Knight Riders in IPL
 Nokia India Fest 2011-Pan India College festival
PROMOTION

20. RURAL MARKET
 Nokia Life Tools (Jeevan Sadhan): SMS Mechanism, Sachet
Pricing, Daily cost of Rs 1 only
 ‘Showrooms on wheels’ and ‘Rural care on the go’
 Tie-up with major micro-finance institutions like SKS
Microfinance
PROMOTION

21. Public Relations ( PR )…
Nokia has strong PR. They keep on doing some or the other new
events, programmes and publicity, so as to keep up with the
brilliant image of the company and also to enhance the brand
equity.
• Direct Marketing :
• Nokia does not perform Direct Sales activities on its official
website www.nokia.com.
• Nokia use DEMO style of Direct Marketing.
• Nokia does not use Direct Mail or Telemarketing styles of
Direct Marketing.

22. RIVALRY AMONG COMPETITORS
 CONCENTRATION AND BALANCE: The major players are
Samsung, Micromax, Blackberry, LG, HTC etc
 INFORMATIONAL COMPLEXITY: Devices are becoming
more complex and getting features that are outside the
core competencies of traditional manufacturers
 CORPORATE STAKES: High stakes for the companies
because of huge investments into the business
 REDUCING PROFIT MARGINS due to intense competition &
price wars

23. COMPETITIVE ANALYSIS

24. A BRIEF COMPARISON
Nokia vs apple

25. START UP
Apple
 June 29,2007
 Investment in marketing – less than
$1 billion.
 No. of employees- 98,000.
 Revenue - $182.795.
Nokia
 1981 , In 2007, n95 was released.
 Investment in marketing - $1 billion
only in india.
 No. of employees – 61,656
 Revenue - $13.5

26. NOKIA MARKET ENTRY
Pros
 Less market competition.
Cons
 Less technological advancement.
 Less awareness among customers.

27. APPLE’S MARKET ENTRY.
Pros
 Respectful brand reputation in
existing market.
 Advance technology.
 Market awareness.
Cons
 Brand competitors.
 User’s preference.
 Consumer’s Idea about mobile
phones.

28. HANDSET MARKET SHARE
nokia samsung lg motorola
sony
ericson
rim htc apple others
2007 38% 14% 7% 14% 9% 1% 1% 1% 16%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2007
2007

29. HANDSET MARKET SHARE
apple nokia samsung zte lg motorola sony htc rim others
2011 8% 20% 21% 4% 3% 2% 2% 2% 2% 33%
0%
5%
10%
15%
20%
25%
30%
35%
2011
2011

30. FACTORS FOR RISE AND FALL.
 Before iphone, handset like Nokia with record selling was based
on fashion and brand rather than technological innovation.
 Apple proved phone was not just a communication tool but a
way of life.

31. INNOVATION.
 Iphone - June 29,2007
 Iphone 3G – July 11,2008
 I phone 4S – October 4 ,2011
 Iphone 5S – Sept. 12 ,2012
 Iphone 5C & 5S – July 22, 2013
 Iphone 6 & 6 plus – Sept 9,2014
 Mobira series(1982-1990)
 Original series(1992-1999)
 4-digit series(1994-2010)
 Lettered series(2005-present)
 3-digit series(2011-present)
 Worded series2011-present)

32. PICTURE VIEW COMPARISON
Apple – keeps on
changing and advancing.
Nokia varied models.

33. ROLE OF OS
ios android windows basic
2014 48% 46% 3% 3%
0%
10%
20%
30%
40%
50%
60%
2014
2014
 Advancement.
 Awareness .
 User-friendly.

34. REVENUE SECTOR
 Q4 of 2008, apple was third largest mobile phone manufacturer
by revenue after Nokia & Samsung.
 By 2011,apple became mobile handset vendor in the world by
revenue surpassing long time leader NOKIA.
 Q1 0f 2012, 99% of industry profits taken by apple & Samsung ,
nokia going on a loss with other companies.

35. Strengths Weakness
Threat Opportunity
SWOT

36. Strong Corporate Brand & the largest cell phone vendor
User-friendly features
Strong Distribution Network
Best Navigation (Nokia OVI Maps)
High resale value of hand-sets compared to other handsets
Slow to adopt new ways of thinking (for example, launch of dual sim mobiles)
High prices compared to other domestic companies
Symbian OS lost out the race with Google’s Android and Apple iOS
Too many products & very little product distinction
No of features offered in the lower end Nokia models are very little and stagnant
STRENGHTS
WEAKNESS
SWOT ANALYSIS

37. Nokia can expand its market share by introducing a new low cost brand in competition to
companies like Micromax, GFive etc
Increase their presence in CDMA market
They can target the smart phone in the low to medium segment with MS Windows- 7 platform
OPPORTUNITIES
Threats from emerging domestic companies like Micromax, Karbonn, Maxx, Lava, Spice etc who
offer similar features at lower prices
In the higher segment it is losing market share to players like Apple, HTC, Blackberry, Samsung, etc
THREATS
SWOT ANALYSIS

38. THE TUMBLE DOWN!
First hit when
competition
started.
Second hit
when
Competitors
took over

39. COMPETITION…
 While it was not totally unexpected, what caught Nokia off-guard is the
rate at which competitors where innovating new technology.
 Since the launch of the iPhone/Android phones, Nokia failed to keep up
with the industry. While other kept proceeding ahead aggressively by
‘hook or crook’.

40. MARKET SHARE
76.1
5.9
38.5
25.6
23
41.8
Nokia Samsung Nokia Samsung Nokia Samsung
2010 2011 2012Mar
Market share (%)

41. HOW NOKIA FAILED IN CONNECTING 'TO'
PEOPLE
 Introduction of Iphone in 2007.
 Nokia relied too much on Windows platform which was
proved as another costlier step for the brand.
 Apple redefined smart phones with touch screen and
Blackberry with email. Android proved that software matters
more than hardware. Nokia was slow to respond to these
trends.
 In India, local brands stole the lead on dual SIMs, low-end
Qwerty and long-battery-life phones.

42. ANDROID WEAKENED ROOTS OF NOKIA?
 In 2008, brands like Samsung, HTC, and Micromax found roots to extend
their market.
 Samsung's Android phones are user friendly and budget friendly too.
 Google bought a company called Android and announced an Open Handset
Alliance, a grouping of industries players who would come together to build
an OS for smart phones. But Nokia refused the invitation.
 Nokia's entrance into Windows platform is quite late.
 Finally Nokia gave up for a 7.1 billion to Microsoft.

43. MISTAKES THAT LEAD TO NOKIA FAILURE
1. Failure of Symbian OS:
 Nokia launched its Symbian 60 series in year 2002 which initially
had a good market response.
 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 is lack of applications and
UI (User Interface).
 After facing competition from iOS and Android, Nokia continuously
tried to improve their Symbian OS but was not creating something
unique.

44. 2. WRONG DEAL WITH WINDOWS
 The company made the biggest mistake to take a leap of faith in Windows
in 2011. At that point of time, the company already was in declining
condition and trusting Windows which was new in the field to regain its
status was the biggest mistake the company made.
 All these phones which the company launched were comparable to other
competitor devices but OS was the problem which lead to ultimate collapse
of company.

45. 3. NOKIA BECAME LAGGARD IN
SMARTPHONE MARKET
 COMPLACENCY:
 Stiff competition from Samsung and Apple.
 Lack on focus on innovation was the second big reason of
collapse.
 Nokia seemed to be lagging in the race. Where Samsung from
nowhere entered the race and focused on innovation as its
core competence to gain the market share, Nokia was very
late to realize this fact.

46. COMPETITION…
 LACK OF INNOVATION:
 If analyzed through the Technology Lens, Nokia primarily failed to innovate
attractive technology and features.
 For example:
 1. Nokia had touchscreen phones, it did not attract customers as much as
compared to Apple iPhones.
 2. China Mobile- it made exact copies of Nokia
 The software being developed were using old development models and newer
concepts such as User Experience and User Interface were being neglected.
 Nokia was clinging onto Symbian OS
for too long. It had reached its peak.

47. REDRAFTING STRATEGIES
 In September 2013, Nokia announces that it has entered into an
agreement with Microsoft whereby Microsoft would purchase
substantially all Devices & Services, the Nokia business which makes
mobile phones and smartphones.
• Stephen Elop facilitated this
deal and his role in it has been
questionable.
• Though Nokia is now
reporting profits, it had lost its
glory in the market it once
dominated single-handedly.

48. WHAT DID STEPHEN ELOP DO
WRONG ?
Inspecting with the organization and human performance lens.
WOULD TECHNOLOGICAL CONVERGENCE LEAD TO
TECHNOLOGICAL OBSOLESCENCE?
Awareness Stage
Consideration Stage
Decision Stage

50. WRONG DECISIONS.
 While the entire smartphone OS industry was evolving, manufacturers
moved on and adopted various operating systems like Android,
Windows, Bada, Meego, et cetera, Nokia decided to stick to Windows
OS only.
 As Android and iOS became more popular, Nokia and its windows
phones failed to attract any attention.
• Though the new technologies developed by Nokia
were ground breaking, they were not promising
enough.

51. RESULTS
 During the 3 years Elop was Nokia CEO, Nokia revenues fell 40%, Nokia profits
fell 95%, Nokia market share collapsed in smartphones from 34% to 3.4%
 Nokia's credit rating went from AAA to junk, Nokia's share price dropped 60% in
value and Nokia's market capitalization lost a minimum of $13 Billion in value.
• The Financial Times calculated that Nokia
shareholders ended up paying Elop a bonus of 1
million Euros for every 1.5 Billion in market capital
that Elop was able to destroy while Nokia CEO

52. RUMOR MILL
 Stephen Elop was working with Microsoft’s Business Division before
moving to Nokia.
 He was the first non-Finnish CEO of Nokia and it is argued that Stephen
was sent with the sole purpose of devaluating Nokia as to make it easier
and cheaper for Microsoft to buy it.
 Microsoft being a software giant always had ambitions to acquire a
hardware sector firm and as Nokia dipped to the bottom, Microsoft
announced that it had bought Nokia for $7.2 Billion.
• While all this happened, Stephen comes
back to Microsoft as VP of Microsoft's
Devices & Services business unit and gets a
signing bonus of $25 Million

53. CONCLUSION
 From Technology perspective, Nokia did not deliver as per expectations
based on previous performance
 From the Strategy perspective, though Nokia did eventually come up
with nice lucrative products, it lost in the race against time due to poor
strategies and sly competition.
 From the organizational and people perspective, the new CEO’s
attitude and competency proved to be fatal for the company.
 The entire Rubik of Organization , people and strategy failed to deliver
for Nokia.

54. Questions are welcomed.