Table of Contents
This is an introduction.
The present state of affairs
An opening statement
Nokia is, in general, the world’s most popular and widely known company. Nokia may conjure images of phones, but there are also more abstract associations. The name Nokia may bring to mind happier memories. Nokia was probably the first phone that many of us had.
Nokia was once a company which did not do anything wrong. What’s this company’s story? What’s the story behind this company?
The RiseNokia history began in 1865, when Frederic Ida Stem, a mining engineer from southern Finland, built his first wood-pot mill. In a few more years, he built a second wood pot mill on the bank of the Nokian river. The river was the inspiration for his company’s name, Nokia. Nokia soon expanded into new industries, including rubber, tires, cables, TVs and boots. The early Nokia company was very different from the one we know.
The Cold War influenced many countries, including the United States and Europe. To help Finland realize its full potential in reliable military communication, the Finnish Government wanted to conduct research on radio-telephone communications. Nokia was awarded the contract due to their experience in communications, which led to the development of a civilian car radio telephone network. This network covered the entire country by the early 1970s.
Jorma Olila, an ex-Citibank banker took over Nokia in 1992. He shut down all extra profits and focused on Mobile, ensuring Nokia’s golden age which would shape its future for the next decade-and-a half. Nokia focused on emerging markets such as India, China, Russia and others. Nokia divided its strategy into four divisions: Multimedia Phones (Multimedia Phones), Mobile Phones (Mobile Phones), Enterprise solutions, and Networks. Nokia controlled 40% of the GSM handset market and 5% to 7% of CDMA handsets. Nokia had ruled the market for over a ten-year period, and they thought that there was nothing that could be done wrong.
The FallAll-of-a-sudden, Steve Jobs (cofounder of Apple Inc.), released the iphone in 2007. This was the beginning of the touch phone revolution. Nokia was also inspired by this new idea but did not realize that consumers were more interested in applications and a good user interface than the hardware itself. Nokia was responsible for 60% of phones sold around the globe, but in just two short years sales had dropped to only 10%. In 2013, they laid off over 25000 people and closed down the majority of their production plants. Microsoft acquired them later in the year. The company which had a valuation of more than $50 Billion was sold only for $7 Billion.
Current SituationEnvironment: PESTLE
PESTEL is a powerful tool that can be used to analyze a situation and identify external forces (at the macro-environment level) that may affect an organization. These forces can both create opportunities and threaten an organization. PESTLE is a model that can help us categorize these factors. This classification is based on the following:
Nokia’s political impact is difficult for analysts to gauge. Finland is home to Nokia but it has been refused a bailout by the government. Nokia was forced into a uneasy alliance that eventually fell apart. Nokia is not as well supported by the government as some other tech firms because it’s based in such a small nation.
Nokia was severely affected by the recent European recession. The European economic downturn has severely hurt Nokia’s home market by reducing its buying power. Nokia hasn’t been able, like Apple, to penetrate China’s fast-growing market. Nokia lacks some of the resources that its competitors like Apple, Google and Samsung have.
Nokia has suffered from the proliferation of apps and smartphones in the world. Apple has become synonymous with smartphones in certain countries, including the United States. This has led to a generation that only purchases Apple products. Nokia had to fight the common misconceptions of the past few years that there was only one smartphone brand on the marketplace, Apple, and Samsung. And only two operating platforms: iOS and Android.
Nokia’s problems are not just a result of technology. They also have a social component. Mobile phones evolved from simple communication devices to handheld computers. It was then that the customers started to want to perform many tasks on their phones. This included taking pictures, watching video streaming and doing business. Nokia hasn’t been able to capture the profitable market that exists for other mobile technologies, like tablets or wearable technology.
The legal atmosphere
Nokia operates in Europe, so its legal environment can be very difficult. Google’s Android usage has been under investigation by regulators from the European Union in preparation for an antitrust lawsuit. EU action towards Google could have a radical impact on Nokia’s markets, for example by separating Android from Nokia.
Nokia faces the same challenge as other electronic manufacturers in disposing its products in an eco-friendly way. The future could bring Nokia a number of costly requirements, including laws that require electronics manufacturers to be responsible for the recycling or disposal of their used products.
IndustryNokia tries to recover from its biggest ever downfall in the tech industry. HMD Global Oy produces the Nokia phones through a licensing agreement. The Finnish mobile phone manufacturer, HMD, has been producing Android phones since early 2017. Nokia phones have officially gotten a rebirth. Nokia has a 1.1% share of the mobile phone market worldwide according to nokiamob.net.
Nokia has never been able to escape the news despite its poor sales figures. Nokia’s revenue in 2018 was 24.8 Billion Dollars, thanks to over 100,000 workers around the globe.
Nokia wants to invest in smartphones of a middle-range price range that do the job. That is desirable and fashionable from a trusted name. HMD’s new business can be a great success if it can achieve this. Nokia 6 is the benchmark, but it’s now time to create a phone that’s more affordable. Nokia’s market value is around $8.4billion. Apple-926billion, Samsung 325.7billion, Xiaomi $100billion are its main competitors.
OrganizationObjectives of Nokia:
Connecting the World – Drive innovative technology and ideas to revolutionize the way people work, live and communicate.
Customer – Maintaining customer trust by providing quality services that are specifically designed to satisfy their needs.
Market – Be recognized for being a market leader in mobile phones, and improving business practices.
Nokia’s “connect the World” objective is a bit unrealistic. It is a clear and achievable goal, as Nokia was one of history’s most beloved companies.
Nokia is known for its high quality products, which are considered by many to be the main element of satisfying the needs of customers.
Nokia’s product range is wide and caters to all types of users.
Nokia’s product are reliable, and they’re durable. That’s what most of the population wants.
It took a long time for the company to establish itself in a market that is booming and highly productive. As a consequence, the company’s once massive market share was significantly reduced.
Nokia’s product range is expensive, especially for the middle-class and lower-class consumers.
Because of Android’s and iOS’s constant competition, Windows Lumias’s sales have fallen sharply.
There are basically five Business Departments that report directly to Nokia’s Chief Executive Officer and President, Rajeev Suri. These Business Units are:
Applications & Analytics
Each business unit is led by a president group who reports directly to the CEO. Each business section has its own strategic, operational, or financial tasks. Nokia Group Leadership Team is Nokia’s main decision-making group.
Market ProgramThe Management Program has as its objectives to identify, gather and use data relevant to Nokia’s marketing strategy. Nokia is planning to further accelerate 5G by year’s end.
Nokia’s products are priced between Rs. 1500 and Rs. Nokia products are priced between Rs. There is a Nokia set for every budget. Nokia sets cater to all types of people and tastes. Nokia has spent a lot of money on advertising to reach the target market. All platforms are used to keep customers updated about new updates and developments regarding Nokia phones. They need to do more research and change their promotional strategy to increase demand among people.
Nokia uses two main strategies to price their products. Nokia has two main pricing strategies:
Nokia launches its product at a high price. The prices are gradually reduced after some time, when the competition enters the market. This technique is known as Market Skimming.
On the other hand, the prices are placed within a range of prices that is similar to their competitors.