Final Project on the Nokia 3310 Model

A Final Paper
Submitted to the School of Management
University of Asia and the Pacific

In Partial Fulfillment
Of the Requirements for the Course
Project Management (BAM132A)

Mid-Year Term, Summer

S.Y. 2020-2021

Submitted by:
Alejandro, Patricia Renee
Feliciano, Mikaela Mae
Manglapus, Patricia Alexandra

July 14, 2021

 TABLE OF CONTENTS

OVERVIEW 3
OBJECTIVES 7
GENERAL APPROACH 8
CONTRACTUAL ASPECTS 11
SCHEDULES 15
RESOURCE REQUIREMENTS 16
PERSONNEL 19
RISK MANAGEMENT 23
EVALUATION METHODS 25
CONCLUSION 27
RECOMMENDATIONS 29
LEARNINGS 32
PEER GRADING 34
REFERENCES 36
 OVERVIEW

Nokia is a Finnish company founded in 1865 by mining engineer Fredrik Idestam.

Starting as a single-mill operation, the company started to explore a wide range of
industry sectors, including cable, paper products, rubber boots, tires, televisions, and
mobile phones (Nokia, 2021). In the 1990s, the company decided to focus solely on the
telecommunication industry, leading to its introduction of world-class cellular phones.
The company’s production of phones has come to success, especially with the
introduction of the 6100 and 3210 model series (Himanshu, 2015). These two
innovations had led to a reported increase of net sales over 50 percent year-on-year in
1998, operating profits of nearly 75%, and an increase of market capitalization from $21
billion to around $70 billion. The Nokia 3210 series model alone had over 160 million
units sold, making it one of the most popular and successful phones in history. Nokia’s
success in being a world leader in the industry has continued to transpire until the
2000s.

​Figure 1. Nokia 6100 Model Series (left) and Nokia 3210 Model Series (right).
 Around the mid-2000s, Nokia experienced a declining stage due to the
emergence of new technologies, specifically wireless and internet technologies. It
became a challenge for the company as its products are hitting off as outdated and
cannot seem to go with the advancements. Especially with the existence of the 3rd
generation of wireless technology, it was evolving and promising due to their enhanced
multimedia capability (Himanshu, 2015). The company’s decline further worsened with
Apple’s introduction of the iPhone in 2007, which other companies have followed. In the
following years, Nokia tried to catch up with its competitors by reinventing its products.
However, it found no success because, by 2013, its market value declined by about
90%, resulting in its acquisition by Microsoft (Brand Minds, 2018).

One of the prominent attempts of Nokia is the creation of the 2017 Nokia 3310
model series, which is a reinvention of the classic and iconic 3310 model that dated
back to 2000. With the 2017 model, its custom-designed user interface brings a fresher
new look of its classic, with a 2.4” polarized and curved screen window for better
readability in sunlight. Nokia claimed that the model has a long-lasting battery lifespan,
charged with a Micro-USB port if it loses battery. It also has its acclaimed legendary
snake game, with a little update of fun and color screen. Lastly, it came in four different
colors: warm red and yellow in gloss finish, and dark blue and grey in matte finish
(Nokia, n.d.).

Figure 2. A Comparison of the 2000 and 2017 Nokia 3310 Model Series.
 Despite its attempt to counteract the increasing success and prominence of
Apple and other Android-led companies, Nokia's 3310 Model Series' success can be
deemed inconclusive. In fact, its launch was met with somewhat mixed unfavorable and
favorable reviews and criticism. In a review by Andrew Hoyle of CNET (2017), the only
advantages of the new version of the 3310 model series are its stellar battery life, tough
build, and low price offer. Other than that, it has not much use and is not irreplaceable to
iPhone or any other smartphones as there are no wifi and applications. Hoyle said that
the model has no access to almost any of the modern features expected from
smartphones. The 2017 Nokia 3310 model series has not many significant changes
other than its nostalgic charms that old-school Nokia fans will love. Another review by
Carl Lamiel in Yuga Tech (2017) had the same sentiments as Hoyle’s. Lamiel said that
the new 2017 model brought a nostalgic feeling of what was iconic and popular back
then. Other than its feature of having a long-lasting battery life, there is not much
possibility that it can replace other phones. Its 2MP camera, the legendary snake
games, and no wifi availability seemed to be lackluster. Lamiel considers it more of a
spare phone, only to be used during emergencies.

Before Nokia’s attempt to reentering the selling of mobile phones, the company
first experienced several events and milestones. As mentioned, Nokia, specifically its
mobile devices division, was acquired by Microsoft in 2013. However, Nokia is
prevented from selling its devices until 2016 due to a non-compete agreement made by
Microsoft (Sun, 2018). During this period, Nokia still exhibited a keen interest in
producing mobile devices. In late 2014, the company partnered with Foxconn in creating
the N1 Android tablet, in which Nokia was only credited with the licensing payments.
Then at the end of the agreement period, HMD Global and FIH Mobile co-purchased
Nokia from Microsoft and finally started reinventing the Nokia brand. Sun (2018) also
mentioned that in early 2017, Nokia launched its first device, Nokia 6, catering to the
Chinese market. It was a commercial success, leading to the launch of Nokia 2, 3, 5, 7,
and 8 in other markets. Among other products that Nokia launched is the already
mentioned 2017 Nokia 3310 Model Series.
 The thought process in reinventing the classic Nokia 3310 Model Series is mainly
based on its classic reputation back in 2000. Its reputable and indestructible device sold
more than 125 million models and became a cultural icon (Pierce, 2017). HMD Global,
one of Nokia’s co-purchasers, wanted to restore the 3310 to its former glory while
bringing the beloved old phone into the new era. As HMD Global CEO Arto Nummela
said, there are only three things that matter: its battery to last a month, snake, and
ringtone. Definitely, the company had achieved these three things, as mentioned by the
reviewers. In terms of projected profitability, there are no statements or any reported
documents stated by Nokia or HMD Global. However, it is assumed that its profitability
may be high due to the high anticipation for the emergence of the classic product.
Especially at the beginning of launching, as Nayan (2017) reported, HMD Global said
that Nokia 3310 (2017) had sold out in many markets after its release, including India,
UK, Vietnam, Finland, European countries, and others. Besides this report, there are no
further reports to its succeeding profitability. In retrospect, assuming the existing reviews
made by mobile phone and tech experts, the model's profitability may not be
continuous. As said by Hoyle and Lamiel, the Nokia 3310 did not live up to its success
as it remained lagged behind its competitors.

Since Nokia’s comeback in the mobile phones industry, its competitive edge
centers on the redefinition of its iconic mobile phones and, at the same time, instills the
advancement of technology. Just as HMD Global CEO Arto Nummela mentioned, the
latest Nokia 3310 Model Series, for instance, was a spin-off of the year 2000 series,
equipped with a more advanced user interface, screen, and updated legendary snakes
game (Pierce, 2017). With this, Nokia’s competitive effect may be inconclusive or more
so of an unsuccessful attempt in being at par with its competitors. It is only a matter of
fact whether their competitive edge suffices with its competitors. That is, consumers
would be willing to buy or replace their phones with Nokia’s. However, considering the
2017 Nokia 3310 Model Series case, Nokia still seemed to fall behind because it met
undesirable criticisms, noting that it was lackluster and could not keep up with the
existing phones (Hoyle & Lamiel, 2017).
 OBJECTIVES

The Nokia 3310 model was first introduced in 2000 and became the most
popular device of its time. It will be fondly remembered by many for its smaller size,
long-lasting battery and distinctive Nokia ringtone. Once the biggest mobile phone
manufacturer, the company that has taken over the Nokia name is trying to move
forward in an ever-more competitive market by taking a little step back. The relaunch of
the 3310 model introduces a colour screen, a two-megapixel camera, and a promising
25-day battery life on standby. It has been designed both as a back-up phone and a
souvenir for fans of 20th century nostalgia.

But for those younger generations who never used the old Nokia, the device is
not so impressive. The Millennial generation, born into a digital, connected world, has
always had smartphones. They will have never known life without a touchscreen,
multimedia apps and plenty of space for storing data. With that being said, this paper
will discuss the different aspects of the Nokia 33-10 model as well as the company in its
entirety. The main problem that will be addressed is the reason behind the failure of the
Nokia 33-10 as well as its failure to cope up with the current product innovation in the
cellular world. Moreover, the researchers will be presenting what Nokia did to come up
with the model and how they failed in executing said product for a long period of time all
in terms of their contractual aspects, schedules, resource requirements, personnel, risk
management, and evaluation methods.
 GENERAL APPROACH

Upon research on the managerial approach of Nokia, it is conclusive that the

advancement of technologies, especially in the mobile phones industry, is only a part of
the problem. Several researchers and observers have pointed out that the company's
demise mainly lies in the managerial aspect. According to Kenji Explains (2020), Nokia
was managed using the standard hierarchical organization in the early 2000s. This
organizational structure consists of a chain of command from the senior management
and executives down to general employees (Indeed Editorial Team, 2021). In 2004,
however, this structure changed after the company executives decided to reorganize it
into a matrix structure to reinvigorate Nokia's success. The difference between this
structure from the former is that the matrix structure has more than one line of reporting
managers compared to the hierarchical, which only has one. A probable reason why the
executives decided to transition is to achieve higher productivity that was crucial in
Nokia's dire situation.

Figures 3 & 4. Example of a Standard Hierarchical Organization (Left) and Matrix

Structure Organization (Right)
 Instead of an expected reinvigoration of Nokia's success, the company
experienced a more disastrous outcome. With the reorganization of managerial
structure, the management was mired with conflict and tension. Several managers now
had equal authority, resulting in power struggles and the inability to agree with each
other (Kenji Explains, 2020). According to Yves Doz (2017), a professor from INSEAD
Emeritus of Strategic Management, the reorganization led to more disharmonious and
poor decision-making. Besides, Nokia's situation further worsened due to the
organizational fear that transpired at every management level. According to a study on
the downfall of Nokia from the smartphone battle by Tim O. Vuori and Qui Huy in 2015,
both the top management and middle management experienced fear with Nokia's
situation and great pressure from each other. The top management was resistant to
admitting Nokia's outdated technology, changing its technology to be on par with
competitors, and accepting its decreasing success. On the other hand, the middle
management was afraid of telling the truth as they feared a possible termination. Due to
unsuccessful reorganization of management approach and organizational fear, many
managers, especially those with technological and strategic expertise, left Nokia,
leading to its eventual decay (Doz, 2017).

Under the leadership of HMD Global, Nokia was able to redefine itself in the
following years, both in management and technical approach. In terms of managerial
approach, Nokia changed its organizational structure once again in 2017. This time,
there was a separation of Nokia's current Mobile Networks business group into two
distinct but closely linked organizations. One is the Mobile Networks, which focuses on
products and solutions, and the other is Global Services for services (Nokia
Corporation, 2017). In addition, there is a change in the leadership approach. With the
lead of Joel Casse, the company's global head of leadership development, Nokia
created a leadership framework changing the manager's approach in redirecting its
needs of the future, which is highly crucial in their residing industry (Donaldson, 2019).
Moreover, HMD Global also assessed its technical approach, focusing on the consumer
wants and needs, and filling the gaps in the smartphone market. With this, Nokia
upholds four aspects: focus on seamless software updates and enhance performance,
strong product offering at a reasonable price, quick in getting the product to market, and
focus on effective partnerships.

Having effective partnerships has led Nokia to have several collaborations and
partnerships with other entities, such as suppliers, carriers, and retailers, which were
vital in the production and distribution of its products. According to Charles Taylor
(2019), with the lead of HMD Global, Nokia was able to pair with large retailers such as
Amazon and Best Buy. As for carriers, it had collaborations with leading wireless
providers in the United States, including Cricket Wireless, AT&T, and Verizon. Then,
Nokia also worked with Google for updates and ZEISS for imaging and ensuring that
software innovation is instilled into the camera.
 CONTRACTUAL ASPECTS

Agreements made with client or third party

According to (Stinson et. al., 2020), the 3310 launched at £129.99 (around $160,
AU$210) on a pay-as-you-go contract through the likes of Orange in the UK (now part of
EE), Cellnet (BT's O2 predecessor) and One2One (which later became T-Mobile).
Moreover, the 3310 doesn't work on Sprint or Verizon at all. On T-Mobile, it's only
compatible with the sliver of a 1900MHz 2G network the carrier has left around for
Internet-of-things gadgets. The 3310 has better AT&T coverage on AT&T's 3G 850/1900
network. But there, too, AT&T has started to slowly cannibalize its older network for 4G.
Your best bet is to pair the 3310 with a low-cost carrier that uses the AT&T network. Red
Pocket's $10, 500-minute plan fits the bill nicely with no commitment.

In addition, customers can get Nokia 3310 insurance for just 10p a month! With
accidental damage cover as standard, Row.co.uk is betting its £1.20 a year mobile
phone insurance won’t receive many claim requests. The insurance website states
“We’ve been insuring mobile phones for what seems like forever. We know what’s most
likely to break and what isn’t. That’s why we’re able to offer the world’s cheapest mobile
phone insurance for the Nokia 3310.” It also states that “They are famous for being
indestructible, but in the rare situation something bad does happen, we’ll have your
back.” The cheap insurance also covers accessories, international trips, liquid damage
and breakdowns. For an extra £1 a month, Row.co.uk will also cover the phone against
theft, loss and unauthorised calls. (Row.co.uk, 2017)

Furthermore, the warranty period starts on the date the Product is sold to an end
user for the first time, as evidenced by the original proof of purchase. The Manufacturer
warrants that the Product (including non-user replaceable batteries) is free from defects
in materials and workmanship ("Defect") for twelve (12) months except for Products
purchased in the following Covered Countries and Region where the Warranty period is
twenty-four (24) months.
 The Manufacturer warrants that the Accessories (defined as user-replaceable
batteries, covers, cables, chargers, headsets and any other accessory included in the
sales package) are free from Defect for six (6) months in all the covered countries and
regions. During the Warranty period, any Defect covered by this warranty will, in a
reasonable time, be remedied free of charge by either repairing or replacing the
defective Product or Accessory or the defective part of it at its option, provided that you
have returned the defective Product or Accessory to the original point of purchase (or
Manufacturer or its authorised service centre, as specified from time to time) before the
Warranty period has expired. When repairing or replacing your Product or Accessory,
the Manufacturer may use new or reconditioned parts or provide a refurbished
replacement Product or Accessory except where the use of such reconditioned parts or
refurbished Product or Accessory is prohibited by local law. In case local law requires
the end user to be informed about the use of re-conditioned parts or refurbished
Products or Accessories, this Warranty document constitutes the necessary notice in
that regard. In case local law requires consent from the end user for the use of
re-conditioned parts or refurbished Products or Accessories, then such parts or
Products or Accessories will not be used until such consent has been obtained. (Nokia,
n.d.)

Reporting requirements

When making a Warranty claim, you must provide the legible and original proof of
purchase, clearly indicating the name and the address of the point of purchase, the
place and date of purchase, the Product type and the serial number together with the
defective Product or Accessory to the original point of purchase (or Manufacturer or its
authorised service centre, as specified from time to time).

Technical specifications
 The Nokia 3310 3G is an attractive, pastel-colored lozenge that comes in blue,
gray, red, or yellow. It measures 4.6 by 2.1 by 0.5 inches (HWD) and weighs a light 3.1
ounces The silver plastic buttons are clicky, if cheap-feeling. The top half of the phone is
a somewhat dim 320-by-240 color TFT LCD screen. The speakerphone, camera, and
flashlight are on the back panel. It isn't water-resistant, but by virtue of being a very
simple phone with a plastic screen, it'll likely handle minor drops without a problem.

Moreover, the phone works on the 850/1900MHz 2G and 3G GSM bands. If

you're going to connect to US cellular networks in 2017, and especially in 2019, you
really need LTE, and the 3310 doesn't support it. The 3310's Java-based Series 30+
interface has some of the standard old-phone apps. There's a calendar and contact
book, a basic music player, a basic video player, and Opera Mini as its Web browser.
You can download and run Java-based apps and games if you get hold of them, and
you can access mobile Web sites like Facebook, Twitter, and Gmail through Opera Mini.
The phone comes with a few games.

The Nokia 3310 has (1) up to 22 hours talk time, (2) up to 31 days standby time,
(3) pre-installed system software and apps use a significant part of memory space, (4)
battery has limited recharge cycles and battery capacity reduces over time. Eventually
the battery may need to be replaced. HMD Global Oy is the exclusive licensee of the
Nokia brand for phones & tablets. Nokia is a registered trademark of Nokia Corporation.
Variations on offering may apply, check local availability. All specifications, features and
other product information provided are subject to change without notice. All images
used are for illustrative purposes only. (Nokia, n.d.)

Delivery dates, incentives and penalties

 Customers can inform Servify about the damage through the Nokia My phone
app or at https://nokia.servify.tech within 72 hours from the time the damage has
occurred. You need to submit all claim related information and documents as mentioned
in the Nokia My phone app within 7 (seven) calendar days of raising the claim or within
the timelines as mentioned in the app or otherwise communicated to you by Servify.
(Nokia, n.d.)

Specific procedures for making changes

In using some features and services, or downloading content, including free

items, require a network connection. This may cause the transfer of large amounts of
data, which may result in data costs. You may also need to subscribe to some features.
Customers can only use their device on the GSM 900/1800 networks. You need a
subscription with a service provider.

In addition, the phone has 64MB of the built-in 128MB storage free, customers
may want to add a microSD card, which fits in a slot under the battery. The music player
will gather together MP3, WAV, and M4A files from the memory card, but not OGG or
FLAC. The video player handles old-school MPEG4 AVI files at up to VGA resolution,
but don't try decoding H.264. The phone's 2-megapixel camera feels like a lie. While it
snaps photos quickly, the images are covered in hideous artifacts that look like they
were upscaled or altered. The phone records 352-by-288 videos whose jerky quality
harkens back to the previous decade.

Furthermore, customers can use one of 12 tinny ringtones or your own MP3, but
you can't assign ringtones by person or by group. The phone supports SMS and MMS,
but not emoji (they just appear as boxes). Predictive text is not turned on by default, and
it's oddly hidden in the settings: You have to go into the Settings menu and press the left
function key, which isn't labeled, to activate it. (Segan, 2017)
 SCHEDULES

In terms of schedule, there were very limited sources of information found

regarding the 2017 Nokia’s 3310 Model Series. There are no announced or reported
specifications to its work breakdown structure or the time requirement for each task
completion. However, one can assume that the 2017 model came into fruition due to
Nokia’s desire to make a comeback in the mobile phone industry to rekindle its success
and reputation. As stated by Arto Nummela, HMD Global’s CEO, the company wanted
to bring back the iconic 3310, which many Nokia fans demanded. Moreover, considering
the purchase of the Nokia brand by HMD Global in 2016 and its 3310 Nokia Model
Series launched in May 2017, the time allotted for this would be a short amount of time.
This amount of time for the series is reasonable given that the product was already
existing beforehand. As stated in the overview, the difference between the 2017 and the
2000 3310 Nokia Model Series was that the former was just reinvention and
modification of the latter. Nummela said that the 2017 model series specifications
include the increase of talk time, one month of standby time, the legendary snake, and
the once-ubiquitous Nokia ringtone (Vizard, 2017). There are not many significant
changes with the model considering these specifications.
 RESOURCE REQUIREMENTS

The problem that Nokia constantly faces is that it is getting more revenue from
selling phones - but its profits are falling. As the graph below - drawn from Nokia’s
financial results going back to the start of 2002 - show, the mobile phone division (which
is what these figures show; they exclude the enterprise and Nokia Siemens Networks
revenues and profits) has been doing well, in money terms.

But the profits are heading south. The long-term trend actually flatters Nokia; its
problems have been accentuated since the third quarter of 2008 - when Android began
to become a factor in smartphone sales. If you drew the line using the past couple of
years, then you'd hit zero profit before the end of 2012. That's highly unlikely, but trends
are something for executives to be aware of - and to reverse where necessary.

By the end of 2009, despite smartphone sales having increased by 24%

worldwide according to Gartner, Nokia's phone profits (which includes smartphones and
"dumb" mobile phones) were - on an annualised basis - the lowest they'd been in the
entire eight-year period, despite the revenues being the second-highest. That speaks of
Nokia's product being commoditized - that the average price and profit per phone sold is
dropping (The Guardian, n.d.).

In addition, here are Nokia’s annual/quarterly operating expenses history and growth
rate from 2006 to 2021:

● For the quarter ending March 21, 2021 were $5.600B, a 1.73% increase
year-over-year
● For the 12 months ending March 21, 2021 were $24.046B, a 2.9% decline
year-over-year
● Nokia annual operating expenses for 2020 were $23.951B, a 6.33% decline from
2019.
● Nokia annual operating expenses for 2019 were $25.57B, a 4.29% decline from
2018.
● Nokia annual operating expenses for 2018 were $26.717B, a 2.19% increase
from 2017.

The problem here is that Nokia is burning cash. As the chart above documents,
Nokia’s Net Cash went down 24% in one year. From page 5 of the Earnings Release:
“Year-on-year, net cash and other liquid assets decreased by $2B, sequentially
[emphasis added], net cash and other liquid assets decreased by $.9B”. Nokia’s
operations have in fact consumed $1.15B, a significant fraction of the company’s$6.4B
Net Cash. According to Henry Blodget, this cannot continue for very long or else Nokia
could go bankrupt in two years or less. His view might be a bit extreme; Nokia has
assets they could convert to cash, thus giving itself more runway for its recovery efforts.
But, as the table below will show, the company’s prospects in both phone categories
don’t look stellar. And bad things happen to cash when the market loses confidence in a
company’s future; vendors want to be paid more quickly, customers become more
hesitant, all precipitating a crisis.
 Nokia’s volume is huge, about 70.8M units; it dipped 16%, which is not a good
sign. Worse, the Average Selling Price (ASP) went down 18% to $44. Mostly in
developing countries, Nokia is now losing ground to the likes of Huawei and ZTE selling
feature phones and smartphones, both very inexpensive. Unsurprisingly, Nokia claims
they will counterattack with their Asha family of mobile phones. Few, outside of Nokia,
or even inside, believe they can win a btrual price cutting fight against those
adversaries. As the chart above shows, Nokia’s smartphone business keeps sinking:
-51% in volume compared to the same quarter last year. And, with a $189 APS, it can’t
make any significant money as $189 is about what it costs to build one (Gassee, 2012)
 PERSONNEL

Workforce

In 2020, Nokia had 92.04 thousand employees situated in around 130 locations
throughout the world, with around 38 thousand each in Europe and a further 20
thousand in the Asia-Pacific region. In comparison, Nokia’s net revenue was largest in
North America at 7.12 billion euros, where about 13 percent of Nokia’s employees are
located, and second to that was Europe with 6.62 billion euros. (Alsop, 2021)

Special skill requirements

Nokia is an equal opportunity employer that is committed to diversity and

inclusion. At Nokia, employment decisions are made regardless of sex, gender identity
or expression, sexual orientation, race, ethnic origin, color, creed, religion, national
origin, citizenship, age, marital status, physical or mental disability, genetic information
or ancestry, protected Veteran or military status, or other characteristics protected by
law. (Google, n.d.)
 At Nokia, a team that is made up of individuals from an enormous variety of
personal and professional backgrounds, expertise and experience. It’s something the
company celebrates; it’s one of its strengths and sets it apart. Nokia has a diverse
culture and wide range of backgrounds means that working at Nokia is a collaborative
experience. No matter what part of the world it is in, whether work from home or the
office, the company enables and supports collaboration through advanced virtual
meeting and knowledge sharing tools and systems. Its people are passionate about the
work they do and the impact they can make, and many have built flourishing careers
with Nokia. The company makes it easy for employees to develop their career beyond
their established function and role. It provides the freedom and flexibility to diversify
careers while remaining in a supportive and nurturing environment. Opportunities are
available to work in locations around the world through international career opportunities
or temporary assignments. Furthermore, Nokia Garage is a place created by employees
for you to go beyond your boundaries and catalyse innovation. Garage represents a
mindset and offers physical possibilities for you to hack, make, dream and share
innovative ideas, without R&D regulations, without bureaucracy and without boundaries.
(Nokia, n.d.)

Necessary training

According to (Andrejs, n.d.) Nokia supports its employees’ careers and personal
development by giving them a certain freedom to choose where they want to develop
and providing opportunities for that. In particular, he states that “besides my regular job
description, I (and other Nokia colleagues) am always encouraged to engage in projects
or activities that are linked to the areas that interest me - be it proposing and leading an
initiative to develop soft/leadership skills or participating in a specific project to gain
competence and broaden my knowledge & network. This approach helps us explore our
interests and encourages us to look for areas where we can improve and learn the
most.” On top of that, Nokia also offers formal coaching for those who are serious about
advancing their careers and want a second pair of eyes on their personal and
professional development.
Special legal arrangements

Nokia wins its business on merit. The company does not tolerate improper or
corrupt payments, including bribes or kickbacks, made directly or indirectly to or from a
customer, government official, or third party, including: Improper gifts; Entertainment,
gratuities, favors, donations; Any other inappropriate transfer of value. Facilitation
payments (sometimes referred to as “grease payments”) are likewise prohibited. Nokie
will engage only reputable third parties who share our commitment to integrity. Nokia is
committed to complying with all applicable financial record-keeping and reporting
requirements and all other applicable anti-money laundering laws and regulations, as
well as laws and regulations applicable to terrorist financing and facilitation of tax
evasion. Nokia conducts business only with customers involved in legitimate business
activities with funds derived from legitimate sources. (Nokia, n.d.)

Security clearances and nondisclosure agreements

The Finnish company has transitioned from producing cellular devices to network
equipment, a shift that is accompanied by ongoing cost-saving initiatives. One of
Nokia’s cost-cutting strategies is layoffs, including 350 jobs in its home country of
Finland, out of the 6000 employees based there. The company hopes to save 700
million euros in annual costs over 2019 and 2020. In total Nokia currently spends more
than six billion euros annually on salaries and wages.
Time phasing of all personnel

According to a talent acquisition manager at Nokia, the employees’ daily

activities will vary according to their role and your expertise. It's different when you are
on a sales team, that working on legal, finance or HR. Even technical teams have
different activities of course, and inside HR have teams who support different areas and
topics. She stated that, “a typical day for me starts with several calls to discuss current
topics or ongoing projects. We review the status, propose new ideas and prepare
material for our teams and stakeholders. While working in Nokia, I have had the chance
to connect with people located in different countries, and roles. Personally, I really enjoy
this, as it is a great opportunity to learn and develop new skills. I also take some time to
do research on new trends and from time to time, I invest a couple of hours on training
myself on topics I find interesting, like project management.” (Catalina, n.d.)
 RISK MANAGEMENT
List of frequent disasters like tardiness, subcontractor, deliveries, bad weather,
unreasonable deadlines etc.

Phillips Semiconductor was a US maker of these microchips, located in

Albuquerque, New Mexico. They used a new technology to produce them. Chips were
first soldered, then hundreds of them were placed on cooking trays that looked like
something you bake pizzas with. The chips were baked in an oven, then cooled. The
production process took place in a sterilized environment because even a speck of dust
could ruin the chips.

One stormy night in March of 2000, lightning struck a power line outside of
Albuquerque. The power went out at the Phillips plant and the cooling fans shut down,
which caused a fire. The fire was contained quickly, though eight trays of chips were
destroyed in the process. All in all, Phillips did not expect production to be offline for
more than a week. Both Nokia and Ericsson bought sizable quantities of chips from
Phillips, and the way each company reacted to this incident would have a big impact on
their futures. Nokia and Ericsson faced many risks in their global operations, including
supply chain disruptions like the fire at Phillips. But their approach to these risks was
much different.

Preplanning to prevent these crises

Nokia has a systematic and structured approach to risk management. Key risks
and opportunities are primarily identified against business targets either in business
operations or as an integral part of strategy and financial planning. Risk management
covers strategic, operational, financial, compliance and hazard risks. Key risks and
opportunities are analyzed, managed and monitored as part of business performance
management with the support of risk management personnel and the centralized
Enterprise Risk Management function.
 The principles documented in the Nokia Enterprise Risk Management Policy,
which is approved by the Audit Committee of the Board, require risk management and
its elements to be integrated into key processes. One of the core principles is that the
business or function head is also the risk owner, although all employees are responsible
for identifying, analyzing and managing risks, as appropriate, given their roles and
duties. Our overall risk management concept is based on managing the key risks that
would prevent us from meeting our objectives, rather than solely focusing on eliminating
risks. In addition to the principles defined in the Nokia Enterprise Risk Management
Policy, other key policies reflect implementation of specific aspects of risk management.

Key risks and opportunities are reviewed by the Group Leadership Team and the
Board in order to create visibility on business risks as well as to enable prioritization of
risk management activities. Overseeing risk is an integral part of the Board’s
deliberations. The Board’s Audit Committee is responsible for, among other matters, risk
management relating to the financial reporting process and assisting the Board’s
oversight of the risk management function. The Board’s role in overseeing risk includes
risk analysis and assessment in connection with financial, strategy and business
reviews, updates and decision-making proposals.
 EVALUATION METHODS

According to research, Nokia ensures safety, quality, productivity, cost, delivery

and the environment in their quality policy as their check points. Each factory does three
types of quality checking such as aesthetics, functionality, and accessories. They check
scratch guards, display checking and cracking, missing parts (i.e. chargers, battery, air
phone, etc.). Moreover, as part of their Standard Operating Procedure (SOP), Nokia
does an Incoming Quality Checking (IQC), wherein they check if the material is good or
not (i.e. plastic material as A cover, B cover, C cover, or D cover) - and of course each
model has a different check point. Another quality checking Nokia does is the Outgoing
Quality Checking (OQC) wherein they check the delivery documents, International
Manufacturing Equipments System (IMES).

The third quality check they do is the Product Quality Checking (PQC) which
helps evaluate a new product that is running in the production line. Here, the visuals of
the phone are checked, specifically in terms of material and parts. Materials wise, items
are reviewed like the MOSS or Mobiran Object Specified Standard, which includes the
A cover, B cover, LCD, printing, BOX checking, etc. The parts on the other hand, deals
with the visual quality document, under this is the DOT, dent, color and reviewing of the
rubber, plastic, printing, and fabric parts of the phone. After this, Nokia goes under the
Process Quality Control (PQC) wherein they check the classes (1, 2, 3), if there are any
inner defect, sim lock, memory lock and all outer finishing will be checked through this
process. Other items are checked like the language country code customer specification
as well as the bill of material. Lastly is the Re-Quality Checking process wherein they
check how long the product will work and its stability. Parts of the product will be rotated
multiple times to ensure the overall stability. Moreover, there will also be a final
inspection of its outer later to check the finish product, particularly its heating capacity,
specific weight, and performance function. After this stage, if there is still a defect
detected, then the product is given to the Diagnostic Department team and processes
the rejection of all the products with defects.
 Nokia actually uses the “5S” as quality tools. It is the name of a workplace
organization method that uses a list of five Japanese words: seiri, seiton, seiso,
seiketsu, and shitsuke. Translated into English, they all start with the letter S. The list
describes how to organize a work space for efficiency and effectiveness by identifying
and sorting items used, maintaining the area and items, and sustaining the new order.
The decision making process usually comes from a dialogue about standardization,
which builds understanding among employees of how they should do the work. The 5S
program focuses on having visual order, organization, cleanliness, and standardization.
The results you can expect from a 5S program are: improve profitability, efficiency,
service, and safety.
 CONCLUSION

Nokia has an opportunity to re-enter into the market with strong manners.
Moreover, they have different ways to solve their problems and come back again with
solutions. The managerial problems faced by Nokia is also clearly evident from the fact
that Nokia has actually developed few products and designs, but the managers within
the company failed to introduce them into the market on time. This is the major strategic
blunder on the part of management of the company. Furthermore, its inability to
compete with the iPhone has resulted in the shift in its focus from smartphones to its
basic phones. This is the major contributing managerial problem which led to the
problem of declining market share of Nokia (Smith, Collings and Clark, 2005).

According to a study conducted by Rosier Morgan and Cadogan (2010), the

principal challenge to firms is with respect to the ways in which strategies developed are
implemented successfully by them. The managers within the organizations have a
critical role to play in the case, as the management of the company has failed to cope
up with the market situation. Nokia led the wireless revolution in 1990 and it was the first
company to enter into the world of smartphones. However, with the introduction of the
smartphone era, the company is racing to roll out the competitive products, as it is
unable to launch a competitive smartphone like the Apple iPhone. This aspect clearly
indicates the lack of sufficient ability of the management at Nokia to revolutionize the
market through its smartphones (Rosier, Morgan and Cadogan, 2010).
 In conclusion, the investigation of the researchers revealed a significant number
of issues that are faced by the organization behind its core problem of not being able to
successfully sell the Nokia 3310 model. The researchers found out that Nokia had
problems with its profitability, marketability, and its potential for innovation. It did try to
perform innovatively but they were not that innovative to compete against iPhones and
other smartphones by Samsung, and lastly, even after devising important concepts, it
failed to introduce them into the markets. This is mainly because of ineffectiveness on
the part of management at Nokia, as they failed to create an impact in the market with
their windows smartphones.
 RECOMMENDATIONS

If you were the PM, what would you have done differently?

The phone industry is undergoing profound changes. Industrial automation and

digitalization are increasing customer demand for high-performance networks, with a
trend towards open interfaces, virtualization, and cloud native software. This will
revolutionize how companies design, deploy, manage and sell their products and
solutions.
 As a Project Manager, our recommendation is that Nokia needs to be systematic,
thoughtful and challenging when engaging with its future. Nokia is on a multi-platform
stage which is a single answer will not transform the company. The company needs to
do the following in order to shore up its strategic positioning: (1) create scenarios of
different futures, centered around different futures for markets. Countries that expect
low-end products today, will not continue to require low-end products tomorrow. Nokia
needs to model potential transformations within the consumer and business markets
and create plans to deliver products and services in anticipation of those
transformations. The company needs to work rapidly to remain credible as a
transformation agent. It needs to be radically thoughtful so its customers trust and
anticipate its next move and build an expectation into its brands within its segments; (2)
figure out what Nokia wants to be. Nokia needs to figure out its strategic competitive
reason for existence and then execute to get there. Some of the following comments
assume part of that mission is to be a leader in mobile communications for consumers
and businesses; (3) Nokia needs to address issues in a product that either offers a
significantly new and positive user experience, or meets existing user experiences and
then shores up the weaknesses of other device OSs. This plan needs to be rapid, and
constantly monitored and revised to stay ahead of the market because the competition
isn’t sitting still; (4) re-create customer service. Device experiences aren’t consistent
and customer service lives at the mercy of carriers and device manufacturers. Nokia
needs to out service its competitors and use that as a means of gathering sophisticated
customer intelligence. Nokia should keep pushing innovation into the market by making
sure that Apps and devices are easily upgraded and patched; (5) Radically simplify the
company. Eliminate barriers to execution. Empower people. Kill meetings that don’t add
value; (6) Carrier partnerships. Work the deals. Keep the carriers as close as the
customers and even shore up their shoddy customer service. Be the advocate of the
customer to the carrier, not the excuse for the carrier to the customer; and finally, (7)
executives have to model the behavior they want adopted. This is the starting point for
change, from empowerment to innovation.
 LEARNINGS

Indeed, the advancement of technology was only a part of the decay of Nokia.
Based on the findings of this research, what mainly led to its demise is the internal
conflict within the management itself. The reorganization of the company’s structure led
to constant disagreement between employees, especially managers of equal authority.
Besides, the management could not accept that Nokia was lagging behind and that they
remained cooped up in their comfort nest instead of venturing out. With this, there are
three key takeaways that Nokia has shown, making it a lesson to other companies.
These three are the importance of management, meeting with the customer’s needs
and wants, and change.

Firstly, management is one of the central fundamental aspects of a company. It

acts as the skeleton, in which the company would not be able to function well without it.
In the case of Nokia, it experienced managerial problems wherein there were constant
conflicts, pressure, fear, and disagreements between employees. The company’s
environment and atmosphere were no longer healthy, leading to its eventual decay. The
employees must have felt dissatisfied, leading to some leaving. Suffice to say, the
transition of the organizational structure from the standard hierarchical to matrix
structure can be deemed unnecessary. The structure itself was mainly the problem, but
most probably the people itself.

Secondly, it is also important to note the importance of meeting the customer’s

needs and wants. It seemed like Nokia was too attached to their mobile phone products
to the point of being unable to let go. With the advancement of technology and
competitors such as Apple and Samsung, there is inevitably an increasing customer
wants and needs. Nokia’s goal of redefining its products while remaining a nostalgic
experience was a good idea. However, it did not meet the expectations because it failed
to consider what the customers truly wanted. It would probably have been a good idea if
Nokia could execute their products, especially the Nokia 3310 model, in a way that is on
par with other smartphones like iPhone or Samsung.
 In connection with the first and second takeaways, Nokia’s situation has shown
the importance of change. As a lot of people say, ‘change is the only permanent thing in
this world.’ Likewise, especially in the industry Nokia is residing in, change is inevitable
as innovation continues to persist, acting as a driver to success. Nokia’s persistence in
staying true to its roots had led them to remain stagnant. The products remained behind
the competitors. For instance, the 2017 Nokia 3310 model series does not have
significant changes and, more so, still lag behind other competitor phones.

Concludingly, the case of Nokia's decline is an excellent demonstration of how a

once used-to-be successful company has found its demise due to its failure to manage
and follow. We need to learn not to be comfortable and complacent when running a
business, as other competitors are lurking around waiting for an opening to take
advantage. Moreover, it is essential to accept the fact that no one is resistant to change.
Change and success are interchangeable in a way that it helps minimize an eventual
decline. It is most likely that Nokia would not have suffered if they recognized the need
to change.
 PEER GRADING

Grader’s Name: Manglapus, Patricia Alexandra

Group #: 2

Members’ Name:
1. Alejandro, Patricia Renee - 1.00
2. Feliciano, Mikaela Mae - 1.00
______________________________________________________________________

Grader’s Name: Alejandro, Patricia Renee

Group #: 2

Members’ Name:
1. Manglapus, Patricia Alexandra - 1.0
2. Feliciano, Mikaela Mae - 1.0

______________________________________________________________________

Grader’s Name: Feliciano, Mikaela Mae

Group #: 2

Members’ Name:
3. Alejandro, Patricia Renee - 1.0
4. Manglapus, Patricia Alexandra - 1.0
 REFERENCES

Ahmer, A. (2019, July). Why Nokia Failed? Retrieved from

https://www.doersempire.com/why-nokia-failed/

Alsop, Thomas. (May 12, 2021). Nokia number of employees worldwide from 2005 to
2020. Retrieved from
https://www.statista.com/statistics/275358/number-of-nokia-employees-since-200
5/
Andrej, B. (November 22, 2019). “How did this company support your career growth?”.
Retrieved from
https://nokia.career-inspiration.com/app/discussions/view/90820/how-did-this-co
mpany-support-your-career-growth

Brand Minds. (2018, July). Why did Nokia fail and what can you learn from it? Retrieved
from https://medium.com/multiplier-magazine/why-did-nokia-fail-81110d981787

Catalina, G. (October 6. 2019). Everyday Life. Retrieved from

https://nokia.career-inspiration.com/app/discussions/view/85994/i-want-to-know-
more-about-the-typical-day-at-work-at-nokia

Donaldson, C. (2019, July). Nokia’s 7-step approach for turning its managers into real
leaders. Retrieved from
https://www.insidehr.com.au/nokias-managers-real-leaders/

Doz, Yves. (2017, November). The Strategic Decisions That Caused Nokia’s Failure.
Retrieved from
https://knowledge.insead.edu/strategy/the-strategic-decisions-that-caused-nokias
-failure-7766
Euronews. (2017). Millennial triese to relaunched Nokia 3310 and fails. Retrieved from
https://www.euronews.com/2017/03/01/millennial-tries-a-relaunched-nokia-3310-
and-fails

Galleon. (n.d.). [Photograph of Nokia 3210 Phone]. Retrieved from

https://www.galleon.ph/cell-phones-accessories-c870/unlocked-cell-phones-c327
8/nokia-3210-phone-p5137836

Google. (n.d.). Nokia Careers. Retrieved from

https://www.google.com/search?q=nokia+careers&rlz=1C1CHBF_enPH879PH87
9&oq=nokia+care&aqs=chrome.0.0i433j69i57j0l3j69i60l3.4535j0j4&sourceid=chr
ome&ie=UTF-8&ibp=htl;jobs&sa=X&ved=2ahUKEwj3wZvtt9_xAhWWvZ4KHdGm
DDMQkd0GMAd6BAgKEAE#fpstate=tldetail&htivrt=jobs&htiq=nokia+careers&hti
docid=j908J8TXJF5E2dQpAAAAAA%3D%3D

Himanshu. (2015, August). The rise, dominance, and epic fall - a brief look at Nokia’s
history. Retrieved from
https://www.gsmarena.com/the_rise_dominance_and_epic_fall__a_brief_look_at
_nokias_history-blog-13460.php

Hoyle, A. (2017, June). Nokia 3310 review: 6 reasons you’ll love the Nokia 3310.
Retrieved from https://www.cnet.com/reviews/nokia-3310-review/

Huy, Q. (2018, October). How Nokia Bounced Back (With the Help of the Board).
Retrieved from
https://knowledge.insead.edu/strategy/how-nokia-bounced-back-with-the-help-of-
the-board-10211
Indeed Editorial Team. (2021, February). Hierarchical Structure: Definition and
Examples. Retrieved from
​https://www.indeed.com/career-advice/career-development/hierarchical-structure
-definition-and-examples

Jean-Louis Gassee. (2012, April). Nokia: Three Big Problems. Retrieved from
https://mondaynote.com/nokia-three-big-problems-2ffc0f274918

Kenji Explains. (2020, August). What Happened to Nokia? Retrieved from

https://medium.com/swlh/what-happened-to-nokia-2a920b622d52

Lamiel, C. (2017, July). Nokia 3310 (2017) Review. Retrieved from

https://www.yugatech.com/mobile/nokia-3310-2017-review/#sthash.Dvp8IOmH.L
EjBfldo.dpbs

Macrotrends. (N.d.). Nokia Operating Expenses 2006-2021. Retrieved from

https://www.macrotrends.net/stocks/charts/NOK/nokia/operating-expenses

Nayan. (2017, June). HMD: Nokia 3310 (2017) enjoying great demand globally. Sold out
in many markets. Retrieved from
https://nokiapoweruser.com/hmd-nokia-3310-2017-enjoying-great-demand-global
ly-sold-many-markets/

Nokia. (n.d.) Careers. Retrieved from

https://www.nokia.com/about-us/careers/life-at-nokia/feel-inspired/

Nokia. (n.d.) Code of Conduct. Retrieved from

https://www.nokia.com/sites/default/files/2020-01/Code%20of%20conduct-ENG-
FINAL.pdf
Nokia. (n.d.). Manufacturer’s Limited Warranty. Retrieved from
https://www.nokia.com/phones/en_in/support/warranty/nokia-3310/PH/en

Nokia. (n.d.). Nokia 3310. Retrieved from

https://www.nokia.com/phones/en_int/nokia-3310

Nokia Corporation. (2017, March). Nokia announces changes in its organization and
Group Leadership Team to accelerate the execution of company strategy.
Retrieved from
https://www.nokia.com/about-us/news/releases/2017/03/17/nokia-announces-cha
nges-in-its-organization-and-group-leadership-team-to-accelerate-the-execution-
of-company-strategy/

Pawar, Y. (2018, March). Importance of Organizational chart in the workplace. Retrieved

from https://upraise.io/blog/importance-organizational-charts/

Pierce, D. (2017, February). Nokia Reviews Its Indestructible Candy Bar - and Shows
Off Three New Phones. Retrieved from
https://www.wired.com/2017/02/nokia-new-phones-3310/

Taylor, C. (2019, December). Nokia’s Customer Focus is Bringing Back Smartphone

Customers. Retrieved from
https://www.forbes.com/sites/charlesrtaylor/2019/12/01/nokias-customer-focus-is-
bringing-back-smartphone-customers/?sh=33f936123fa7

Tech 2 News Staff. (2017, May). The Nokia 3310 is Priced at RS 3310 in India and Will
Be Available at Offline Retailers from 18 May. Retrieved from
https://www.firstpost.com/tech/news-analysis/nokia-3310-here-is-how-you-can-ge
t-your-hands-on-the-latest-nokia-mobile-phone-3702853.html
The Economic Times. (2021, July). Definition of ‘Matrix Organization.’ Retrieved from
https://economictimes.indiatimes.com/definition/matrix-organization

Trading Economics. (N.d.). Nokia Operating Expenses. Retrieved from

https://tradingeconomics.com/nokia:fh:operating-expenses

Row.co.uk. (February 28, 2017). World’s Cheapest Mobile Phone Insurance for
‘Indestructible’ Nokia 3310, by Row.co.uk. Retrieved from
https://row.co.uk/blog/post/2017/02/28/worlds-cheapest-mobile-phone-insurance

Segan, Sascha. (November 14, 2017). Nokia 3310 3G Review. Retrieved from
https://www.pcmag.com/reviews/nokia-3310-3g

ShopMuscat. (n.d.). [Photograph of Nokia 6100 (Only Mobile)]. Retrieved from

https://shopmuscat.com/product/nokia-6100-only-mobile/

Stinson, Ben. (September 2, 2020). The Nokia 3310 just turned 20 years old – here's
what made it special. Retrieved from
https://www.techradar.com/news/the-nokia-3310-just-turned-20-years-old-heres-
what-made-it-special

Sun, L. (2018, February). Nokia Makes a Surprising Comeback in Smartphones.

Retrieved from
https://www.fool.com/investing/2018/02/21/nokia-makes-a-surprising-comeback-i
n-smartphones.aspx

The Guardian. (N.d.). Nokia’s revenue and profit trends point to its key problem:
commoditization. Retrieved from
https://www.theguardian.com/technology/blog/2010/sep/10/nokia-profits-falling-ex
planation
Vizard, S. (2017, February). The Nokia 3310 is back as a ‘modern classic reimagined.’
Retrieved from https://www.marketingweek.com/nokia-3310-back/

Walsh, James. (n.d.). Business Case Study: Risk Management at Nokia vs. Ericsson.
Retrieved from
https://study.com/academy/lesson/business-case-study-risk-management-at-noki
a-vs-ericsson.html

Wikipedia. (n.d.). [Photograph of Nokia 3310 Phone]. Retrieved from

https://en.wikipedia.org/wiki/Nokia_3310

Wikipedia. (n.d.). [Photograph of Nokia 3310 (2017) Phone]. Retrieved from

https://en.wikipedia.org/wiki/Nokia_3310_(2017)