Marketing Management Report

‘’Nokia”

Group Members

Adil Haroon (31652)

Suheer Patras (33604)
Sheikh Usman Ghani (27400)
Ubaiadullah (35731)
Zargham Zaidi (28345)
Muhammd Zakir (29816)

(Date)
7-08-2018
TABLE OF CONTENTS

S.NO TOPICS PAGE NO

1 Industrial Analysis 3-6

2 Company Description 6-8

3 SWOT Analysis 9-11

4 Ansoff Matrix 12-14

5 Brand portfolio collection 15

6 BCG matrix 16

7 Conclusion 16-18

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INDUSTRY ANALYSIs

Definition:

This PESTEL analysis deals with the challenges that Nokia can come across and

how these various forces can impact its business in the international market. PESTEL is

an acronym for the six important forces that affect international businesses in the

21st century. These forces are Political, economic, socio cultural, technological,

environmental and legal. They are important forces which can have a direct or indirect

and deep impact on businesses.

Linkage to Nokia:

Political Factors Affecting Nokia

The impact of political factors on Nokia is hard to ascertain. The company is

based in the European nation of Finland, but the Finnish government has refused to give

it a bailout or special favors .This forced Nokia into an uneasy alliance

with Microsoft that has since fallen apart.

Unlike some tech companies, Nokia lacks strong government support because it is based

in a small country. This can both help and hurt the company because it is not associated

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with a major power, but it might lack the political clout of American- or Chinese-based

rivals.

Political unrest or other changes in China could disrupt production and limit

Nokia’s manufacturing capabilities in that country. This could force it to move

production to higher-cost locations such as the United States.

Economic Factors Affecting Nokia

Nokia suffered heavily from the European downturn of recent years. Economic

turmoil in Europe has hurt it badly by limiting buying power in its home markets.

Unlike Apple, Nokia has had a hard time tapping into the fast-growing Chinese market.

Nokia also lacks the vast economic resources available to some of its competitors, such

as Google, Apple and Samsung. In particular, Nokia seems to lack the research and

development capabilities that have enabled these companies to develop new devices and

tap new markets. One reason why it lacks those capabilities is that Nokia simply does not

have the money to finance extensive research and developments efforts like its

competitors do.

Social/Cultural Factors Affecting Nokia

The major cultural factor that has hurt Nokia has been the widespread

adoption of smartphones and the growing use of apps. Many of the most popular

apps, such as WhatsApp, are designed for more popular operating systems such as

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Google’s Android and Apple’s proprietary IOS. Nokia’s decision to utilize the

Microsoft Windows Phone instead of Android limited its appeal to many customers.

The popular association of Apple with smartphones in some countries—such as the

United States—has cut deeply into Nokia’s market by creating a generation of

customers that only buy one brand. In more recent years, Nokia has had to deal with

the popular misconceptions that there are only two brands of smartphone in the

market, Apple and Samsung, and only two operating systems: IOS and Android. This

has kept many customers from even considering Nokia products.

Technological Factors Affecting Nokia

The technological challenges affecting Nokia are at the root of the social

factors limiting its business. The development of open sourced operating systems

such as Android and the invention of apps radically changed the mobile phone

market. Mobile phones were transformed from simple communications devices into

handheld computers. This led to a situation in which customers wanted to perform a

wide variety of tasks with phones, including taking photographs, watching streaming

video and performing business functions. The problem was compounded by Nokia’s

decisions to utilize the less popular Windows Phone operating system and to stick

with its own operating system. This limited customers’ choices and made it difficult

to sell Nokia products to younger consumers.

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Environmental Factors Affecting Nokia
Like other electronics manufacturers, Nokia is faced with the problem of

safely and economically disposing of its used products in an environmentally-

friendly manner. One costly requirement that it could face in the years ahead is laws

making electronics manufacturers responsible for the disposal or recycling of used

devices, a potentially costly expense, particularly if the devices use lithium batteries.

Another environmental concern that could affect Nokia is increased costs for

materials and components, particularly lithium for batteries. Increased demand for

lithium for other uses such as electric cars could limit its supply and raise costs.

A long-range challenge could be climate change created by global warming, which

could disrupt transoceanic shipping and Nokia’s supply chain. New environmental

laws in China designed to curb greenhouse gases could increase production costs in

that country and affect Nokia’s costs.

Legal Factors Affecting Nokia

Nokia’s legal environment is extremely challenging because it operates within

the European Union. That body’s regulators have been investigating Google’s use of

Android for a possible antitrust case. EU action against Google could lead to radical

changes in Nokia’s market, such as Android being spun off into a separ ate company.

It is not clear how exactly such action would affect Nokia, but it could create a more

level playing field and increase Nokia’s access to the European market. One possible

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game changer could be that popular Google solutions such as Gmail could be taken

off of Android, which could limit its popularity

COMPANY DESCRIPTION
Nokia was a world leading company in telecommunications. Nokia serfs its

products in 130 countries. It categorized the products in four category which is mobile

phone, multimedia, enterprise solutions and network. Mobile phone segment focus on

wireless voice and data, multimedia focus on mobile gaming networks, home satellite

systems, and cable television set-top boxes. The Enterprise Solutions group develops

wireless systems for use in the corporate sector. Nokia have strong manufacturing and

research and development opportunity it operates manufacturing facilities in nine

countries and in twelve countries operates research and development facility.

Nokia was founded by Nokia company in 1865 in a small town of the same name

in central Finland. Nokia has many products which is manufactured by natural resources

by vast forest. But nokia has strongly focus on telecommunications industry Nokia was a

market leader in telecommunications. Its established own power plants Nokia share were

listed first time in Helsinki exchange in 1915

Nokia faced first changes several years after world war II.Despite its proximity to

the Soviet Union, Finland has always remained economically connected with

Scandinavian and other Western countries, and as Finnish trade expanded Nokia became

a leading exporter.

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 During the early 1969s nokia wants to acquisition for expansion of its business so

that's why nokia acquired two well-known company which is Finnish Rubber Works,

which was founded in 1898, and Finnish Cable Works, which was formed in 1912, to

form Nokia Corporation. When the amalgamation was completed in 1966, Nokia was

involved in several new industries, including integrated cable operations, electronics,

tires, and rubber footwear, and had made its first public share offering.Nokia continued to

operate in a stable but parochial manner until 1973 when political accommodation is

occurred in worldly by oil crisis so nokia has also disturbed by this issue because nokia

has trade with Soviet union in exchange of oil rates and by this crisis Soviet union

purchasing power are declined.

Nokia has strongly market share in telecommunications at that time when it's

strong market share but when competitors are bring innovation nokia cannot grape

continuously after that because nokia did not bring change in strategy for innovation so

that's why nokia lost its market share and brand loyalty so that's the reason nokia sold its

business to Microsoft.

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SWOT ANALYSIS:

Strength Weakness

Opportunities Threats

Strength:

1. Partnership with Google.

2. Healthy growth in the Home appliance Business unit.

3. A Global Behemoth with strong brand image.

4. An Extensive distribution network.

5. Hardware integration with many open source OS and software.

6. Innovation and design.

7. 50 mega pixel camera at the back or 21 mega pixel camera at front which is not

come up in any other device.

8. 16 GB RAM the best among others.

9. 640 GB internal storage as big as PC Hard Drive.

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 10. Projector.

11. User friendly.

12. Product mix.

13. Straddle positioning of the product.

14. Nokia Electronic controls 114 local subsidiaries worldwide.

15. Nokia being a fast moving consumer durable company makes its products

available in the markets through its distribution partners.

16. Through its continuous branding efforts, sponsoring sporting & lifestyle events

like ICC cricket world cup, Formula one championship, soccer matches etc. LG

has created high visibility and thus is successful in its branding efforts.

Opportunities:

1. Growing and changing technological landscape.

2. Market expansion.

3. Growing urban population, Rise in disposable income, shift towards technological

products & migration from rural to urban areas are some of the factors that will be

the driving force for the home appliances, electronics goods.

4. Intense competition in the industry is helping Nokia in making their products

acceptable to the society. So Nokia can leverage out benefit of this & can increase

their market share by considering competitors move.

5. Strategic alliance/partnership.

6. By further penetrating to the emerging markets will help the company in

accelerating its growth rate.

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Weakness:

1. Muted Overall sales with mobile communication business unit action as a drag

factor.

2. In BCG matrix analysis. Cell phone is in the Dog category and smart watch is in

Question mark category.

3. Due to its extensive presence in the white & brown goods market they are not

able to focus on every single product category properly due to which they are

losing their market share in several products like T.V, Refrigerator etc.

4. Exposure to change risk.

5. Debt/Equity ratio.

Threats:

1. Price war with closet competitor / adoption of red ocean strategy.

2. Sluggish economic growth of advanced economics and rising raw material cost.

3. Every company in this industry is fighting hard to make their presence felt & hold

their market share. Majority of the players in the industry follows red ocean

strategy in order to kill the competition which is affecting the industry as a whole.

4. Government policies relating to use of innovative technology for energy & power

conservations is by & large affecting the industry & forcing them to switch to

renewable sources of energy.

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ANSOFF MATRIX
Definition:

The ANSOff Matrix is a strategic planning tool that provides a framework to help

executives, senior managers, and marketers devise strategies for future growth. There are

four strategies:

Market Penetration:

This strategy focuses on increasing the volume of sales of existing products to the

organization’s existing market.

Product Development

This strategy focuses on reaching the existing market with new products.

Market Development

This strategy focuses on reaching new markets with existing products in the portfolio.

Diversification

This strategy focuses on reaching new markets with new products. Diversification can

be either related or unrelated.

 Related Diversification: The organization stays within a market they have

familiarity with.
 Unrelated Diversification: The organization moves into a market or industry

they have no experience with. This is considered a high risk strategy.

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Linkage to Nokia

ANSOFF MATRIX FOR NOKIA

Every organization occasionally has to take some momentous decisions that affect

the entire destiny of the organization for years into the future. These decisions are

considered to concentrate on the major and most significant issues facing an organization.

Market penetration: (existing markets, existing products): Market penetration is the

least risky way for a company to grow.

The aim of market penetration is to sell existing products to an existing market, to do this

Nokia must do a few things:

1. The pricing scheme should be reasonable (for example, penetration or competitor

based)

2. Introduce discounting offer

3. Start up a different advertising campaign or consider changing an existing one.

4. Improve better quality of consumer services.

Market development: (existing markets, new products): new product development

can be a crucial business development strategy for firms to stay competitive.

To complete market development successfully, Nokia must look into the following:

1. Researching and selling to a different market (in case of saturation or poor market

share)

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2. Lower current prices to help the products appeal to a wider range of consumers.

Product development: (new markets, existing products)

An established product in the marketplace can be tweaked or targeted to a

different customer segment, as a strategy to earn more revenue for the firm. For example,

WAP (Wireless Application Protocol) phones are aimed at more professional people

while Camera phones are aimed at the youth market.

Diversification: (new markets, new products)

This refers to developing technology that offers consumers something new or

different, this is the most common way of companies trying to gain greater market share

and increase their profits.

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BRAND PORTFOLIO COLLECTION

HMD Global, which designs and sells Nokia brand of phones is focusing on

expanding product range and deepening retail presence in the smartphone market. The

company, which counts Asia among its top markets, Nokia returned to the market with

HMD as the new owner of the brand and lined up 11 devices in 12 months with unveiling

three new high-end devices,

Nokia 6, 6.1 series, Nokia 7 Plus and Nokia 8 Sirocco

Nokia's brand portfolio adds the mid-range smartphones

Nokia 4 series, Nokia 3, 3.1 series

Further Nokia has entry-level smartphones phones

Nokia 2 series, Nokia 1 series and Nokia 3310, Nokia 8810 banana phone which uses

YunOS.

All these smartphones prices starts Rs 10,999-69,999. They have sold 70 million devices

globally. The old beloved mobile manufacturer have already reached 80 countries

directly.

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BCG MATRIX
To look at each of these quadrants, here are some tips:

 Dogs: Nokia 3310, Nokia 8810 banana phone which uses the YunOS, Nokia might
end these two models in 2019.

 Question marks: Nokia 2 series, Nokia 1 series are not making their benchmark that the
company was expecting to.

 Stars: Nokia 6, 6.1 series, Nokia 7 Plus and Nokia 8 Sirocco are very successful in the
market.

Cash cows: Nokia 4 series, Nokia 3, 3.1 series are midrange smartphones and beside all the
computation in the market they are doing great, but Nokia has to consider investing some to make
these smartphones publics favorites.

CONCLUSION

 Nokia is one of the companies which deal in similar products, because of its

experience, innovation; it provides reliable and protected solutions. The main

product of Nokia is mobile phone and its offices are located all over the world.

The mission statement of the Nokia is very attractive “CONNECTING PEOPLE”.

 Some of the factors that effects the organization are such as customers, suppliers,

political environment, technical environment, social environment etc.

 Nokia first started its business by producing equipment and tools which were used

to cut down woods in Finland. Then it further changed its business to paper, from

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 paper to paperless office related to IT and from afterwards it changed its business

into mobile telephone

 It is not clear how exactly such action would affect Nokia, but it could create a

more level playing field and increase Nokia access to the European market.

 One possible game changer could be that popular Google solutions such as Gmail

could be taken off of Android, which could limit its popularity Originally a

manufacturer of pulp and paper,

 The government, however, hoping to rationalize two underperforming basic

industries, favored Nokia expansion within the country and encouraged its

eventual merger with Finnish Rubber Works, which was founded in 1898, and

Finnish Cable Works, which was formed in 1912, to form Nokia Corporation.

 Nokia could count on a substantial share of the high end of the market, a segment

that continued to thrive midway through the decade, but the company’s greatest

strength was in the lower end of the market.

 In countries such as China, Brazil, and India there was a tremendous demand for

inexpensive mobile phones, with analysts expecting 50 percent of the one billion

handsets sold between 2005 and 2010 to be sold in developing economies.

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 Nokia is a dynamic company in a fast-changing and fluid environment, Kallasvuo

said in a November 29, 2005 interview with the South China Morning Post.

 Nokia faces serious challenges in the mobile market which automatically concise

it's market due to which it is unclear that Nokia will ever become the business

model or not.

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