TABLE OF CONTENTS

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

This report analyses the impact of external an internal influences on the business
strategies of Nokia Corporation, evaluates the factors, modifiers of Nokia’s advancement,
and also considers the environment policies, and technology development in the future.

Analyzing current business situation shows that Nokia needs to:

 Differentiate its products capability between old and new category.

 Enhance its products with computer IT compatible, focusing on new technology
users.
 Maintain its price reasonably.
 Follow, practice and promote its environment policies.

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

The result of the report finds that Nokia does not only want to occupy the position in
mobile phone market, but also to base on its technology development to approach to the
PC market. In addition, Nokia should not only develop new technology, but also has
other responsibilities for human, such as to reduce pollution and waste, which are
produced by the process of production.
Introduction
The mobile Internet has attracted numerous media attention. We know need to consider
why it is important to create new products of mobile in the market, what does consumers
needs, and what kinds of social activities changes affected Nokia to change its main
product line..
1.1 Company History
Nokia was a manufacturer of paper in 1865. After World War II industrial products
were increased substantially. Nokia had change its function to an industrial enterprise and
produce industrial products, such as chemicals and rubbers. Until 1960s Nokia had set
electronic department and focused on develop transmission systems this was the factor
that Nokia became a famous company in the world.
1.2 Nokia’s change in focus between 1988 and 2000
Business (1988) % Of sales Survived Business (2000)
Floorings 1% No Transmission systems
Chemicals 2% No Fixed networks
Machinery 4% No Access networks
Electrical wholesale 4% No Wireless/mobile data
Mobile telephones 5% Yes Tetra networks and terminals
Telecommunications 5% Yes GSM networks
Rubber 6% No Smart traffic products
Information systems 23% No Multimedia
Cables 9% No Internet
Paper 10% No Digital exchanges
Consumer electronics 31% No Mobile phones Base stations

1.3 PEST Analysis

Nokia is classified as international organization. It’s basic for global brand which is
required to focus on macro environmental factors. Macro environmental factors include
Political, Economics, Society, and Technology analysis. It is necessary force that Nokia
has to concern and know what is happening in the other countries at the moment because
there are different culture and different external factors between countries. Nokia has to
adjust its strategic plan in order to develop international market.

1.3.1 Political
It is important of a company to acquire resources from government such as economic,
science and technology policy. The success of Nokia has obtained the resources from
Finnish policies, which assist Nokia to advance its products.
As Zheng (2001) has observed:
The Finnish policies are the most important factors of Nokia. To operate efficiently in
modern, knowledgeable and technology based economy that is highly specialized,
internationalized and undergoing rapid structural change requires active support from the
public sector.
Finnish government best facilitate the efficient functioning of the economy by directing
its resources to the reduction of market failures. The state must also pursue an industrial
and economic policy that provides a stable macroeconomic environment for enterprises.
General macroeconomic stability, low interest rates, stable currency conditions and the
international competitiveness of the tax system form the foundation for the growth of
business an improvement in employment.
As the result of this, not only Finnish Government but also international companies, such
as Nokia, have play very important roles to develop their information society and national
technology strength.

1.3.2 Economic
According to the fact that Russian Federation was collapsed in early 1990s and it
assaulted with Finnish economics (OECD, 1996). Nokia also face with the problem, and
changed its functions from single market and overall products to global market and
focusing mobile phone market.

1.3.3 Society and Technology

In the 1980 people trend to microcomputers and Nokia try to match the tendency to
produce its main products such as computers, monitors and TV sets. According to the
changes in 1990 Nokia also changes its functions to mobile phone market. The global
market trends to connect PC and mobile phone even if to combine these two products
together.
On the other hand one important future challenge of Nokia is to establish its policy to
follow up the environmental policy, science and technology policy of the Finnish
Government.
As Zheng (2001) has report:
Sustainable development and environmental protection have various effects on the
operation of the innovation system. Innovation also creates new opportunities for
promoting sustainable development. The markets for environmental products are
expected to grow rapidly in the near future. The Finnish government offers goods
facilities for taking this opportunity.
The main reason of Nokia has success to advance its products are the policies and
technology development of Finnish Government. It can not be separate between Nokia’s
successful of advance its product and Finnish Government’s policies both of Nokia and
Finnish Government are the winner in the international market. Nokia has obtained the
success of mobile phone market, and Finnish Government has established its position of
technological development.

2 Research analysis
2.1 SWOT Analysis
Strength and weakness analysis can be defined as internal factor in order to show how
well they are performing inside the company. It should retain its strength as long as they
can. They have to research and develop their company continuously in order to achieve
the goal.
The key success requirement for operating in the target market is basically depended on
the external factor. In case of Nokia it has numerous opportunities to be able to enlarge
their market share. Nokia still have threats to diminish in sales and gross profit.

2.1.1 Strength
 Global marketing (product)
Nokia is the global product so it should be at least passed worldwide qualification by
ISO. This is the reason of why Nokia can be entrusted around the whole world.

 High product quality

Nokia concerns about product quality, which is the most important factor to satisfy
customers needs. Nokia adds more values by superior quality or differentiated features to
the market. Nokia still produces the products with high quality and continuously improve
to the particular market.

 Fashionable product (serve new trend )

“The rise in number of users by 700 million in a little over three years will be driven by a
huge rise in the number of young style conscious users”. That is the reason why they
have to serve for young people who use their mobile for text messaging rather than phone
call.

 Wide range of product

Based on the contemporary data it can be determined that Nokia has the highest number
of product line compared to its competitors (more than 10 models) accordingly it covered
every class of people from. Comparing data with Ericsson, Motorola, Sony, Samsung,
siemens and other companies. It illustrates that other brands have narrow shape of
product lines.

 Product warrantee worldwide

No matter where Nokia’s customers are if they got a problem from Nokia’s mobile
phone. They can use Nokia service worldwide wherever Nokia centers are. These can
ensure customers who worried about service system.

2.1.2 Weakness
 High price
After compared the price between Nokia and others it can be established that Nokia has
highest price in every type of its products. It can be conclude that Nokia still have a weak
point as higher price than the competitors.

2.1.3 Opportunity
 Product launch continuously
It has determined that Nokia uses Total Quality Management (TQM), which mentions
more about training worker program, and makes the higher product quality. All
employees are well-trained and motivated consecutively afterward production processes
also developed as well. Nokia established Research and Development department (R&D)
where developers develops product line into modern modification as well quality as the
existing products.

 Users Availability
Mobile phone retail stores, the link Phone 4U and Car phone warehouse, which is spread
around London in every street. Every store has not missed the opportunity to choose
Nokia as their product line. All the customers can be guaranteed that any damaged or loss
of Mobile phone will be service through those retail shops.
 Necessary Product For People Now
Mobile phone has become a popular device for everybody in the world now especially for
businessmen who really need everything in advance during specific time because time is
money for them. Mobile phone has already become a necessary device for every ultimate
user nowadays.

 New Software Market

. People around the world are using new mobile services which are directly relevant to
personal needs. It can access anytime, anywhere and the innovative are fully provided to
customer’s Nokia. Nokia has already added value through MMS for Messaging and E-
mail, Java for download any applications and HTML especially for content search. So it
may attract those businessmen and teenagers who are interested in the new software
market.

 Joint Venture In Technology

Nokia has already joint with Hewlett Packard (HP) company it has a well reputation
about computer programs for many years. Nokia has a considerable opportunity for
enlarge their market size into PC user who prefers mobile phone compatible with PC
device as well.

2.1.4 Threats
 Obsolete about PC tools if compare with new comers who have more specialize
on PC tools
Due to fierce competition in mobile phone a market nowadays caused new technology
compatible with PC computer such as Sony Ericsson, which specializes on PC computer
now. Sony applied their computer system into mobile phone as well as PC computer on
hand at the same time. People are interested in advance of computer as similar as mobile
phone market.
It is important that most companies have moved on the PC connected and try to bread
into the PC market. People want to use mobile anywhere and want to connect Internet,
therefore to own or to corporate with Internet Network Service company it is the chance
to join into the new PC market.

MARKET ANALYSIS:

MARKET MIX:

Price
Product
Placement
Promotion

Price:
Market Skimming: Nokia sets the high price of their some product to earn more
revenues e.g.; N series and E series.
Market Penetration: Nokia sets the low price of their some product to earn market value
as in 11 series.
Optional Product: Nokia optional product with their basic product is Bluetooth, hand
free etc.
Captive Product: Nokia captive product is batteries and chargers.
Product:
Core Benefits: To facilities people with Tele communication through their product.
Basic Product: The basic product of Nokia is mobile phones.
Expected Product: They are joining with H.P for the technology enhancement.
Augmented Product: They are hand free, Bluetooth, memory card etc
Promotion:
Promotional Strategies of Nokia

1. Customer satisfaction: Market research must be used to find out whether customers'
expectations are being met by current products or services.

2. Customer perception: this is based on the images consumers have of the organization
and its products, this can be based on; value for money, product quality, fashion and
product reliability.

3. Customer needs and expectations: This is anticipating future trends and forecasting for
future sales. This is vital to any organization if they wish to keep their entire current
market share and develop more.

4. Generating income or profit: This principle clearly states that the need of the
organization is to be profitable enough to generate income for growth and to satisfy
stakeholders in the business. Although satisfying the customer is a big part of a
companies plans they also need to take into account their own needs.

5. Making satisfactory progress: Organizations need to make sure that their product is
developing along with the market if a product is developing well then income should
increase if not then the marketing strategy should be revised.

6. Be aware of the environment: An organization should always know what is happening

within their designated market, if it is changing, saturation, technological advances,
slowing down or rapidly growing, being up to date on this is essential for companies to
survive.
Placement:

Finance Analysis:
 • NOKIA CORP Earnings Analysis
Earnings Summary: NOK

EPS (TTM): 1.08591 Current P/E Ratio: 10.74669

Last Quarter's Earnings: 0.13 Current Quarter Estimate: 0.175
Last Fiscal Year Earnings: 1.98 Next Fiscal Year Estimate: 1.136
Analyst Consensus: Buy Dividend Rate: 0.518
Last Dividend: 3.70

• NOKIA CORP Top Competitors

•
%
Symbol Company Name Last Change Change Volume

NOK NOKIA CORP 14.00 -0.282 -1.97 28.13

M

ERIC ERICSSON L M TEL CO 9.48 0.29 3.16 6.93 M

MOT MOTOROLA INC 5.81 0.30 5.44 28.11

M

Human Resource:
Nokia'S Human Resource Management
Nokia: Human Resource Management (HR) Personnel management
To maintain a healthy, successful and efficient environment Nokia collaborates with its employees
under the main goal to create an environment for all its employees where they can fulfill their
potential. Motivation, encouragement and maintaining employees satisfaction and well-being at
work is vital for Nokia to perform at its best. As a goods manufacturer Nokia collaborates with its
employees within formal and informal networks to allow ideas to be exchanged easily. To
encourage their employees, Nokia has adapted various HR techniques including pay system,
training and developing employees, and fringe benefits.

FACTORS NECCESSARLIYLY FOR EMPLOYEE:

Rewards and Packages:

The total compensation of employees aims to not only maintain a healthy working environment,
but to also fulfill Nokia’s goal to fulfill employees potential. Nokia rewards its employees for good
performance, competence development, and company success rewarding higher performance
and contribution with higher rewards. Every employee receives an annual base salary according
to his or her position in the firm. Together with the annual base salary come bonuses such as the
Nokia Connecting People Bonus programme.

Professional and Personal Growth:

The employees of Nokia are encouraged to fulfill their potential. Nokia tries to achieve this by
encouraging employees to develop their own competencies and to stay up-to-date with
technology to allow maximum performance.
Workforce planning and recruiting

Manager shall have a system to ensure the availability of workforce for current and future
business needs, in a sustainable and ethical manner, at both organizational and unit level.

Resource planning

Resources need to be available to meet both current and future business needs according to
company strategy.

Occupational health and safety protection

Manager shall ensure that physical and mental working conditions allow employees to perform
their tasks safely and efficiently. Supplier shall have procedures for identifying, minimizing and
preventing hazards. They shall be implemented as, for example, safety instructions, work
procedures, preventive maintenance, employee training, identification of potential hazards and
appropriate safety devices, personal protective equipment and clothing, hearing protectors,
chemical control or machine safeguarding.

Employee amenities

Manager shall ensure that employees are provided with access to potable water and clean toilet
facilities. Canteen facilities and food preparation areas shall be clean and safe, and food shall be
provided at reasonable cost. Employee dormitories shall be clean, safe (equipped with, e.g., fire
extinguishers and exits), adequately ventilated and/or heated, shall provide reasonable personal
space and shall be provided at reasonable cost.

Competence and development

Manager shall ensure that employees have the education, training and competences required for
their position and tasks.

Nokia specific training and certification

Manager shall ensure, on request, that personnel allocated to Nokia work have the necessary
training on Nokia policies, products, processes and guidelines and, if needed, have necessary
licenses and certificates. Supplier shall ensure such licenses and certificates are valid in terms of
time and scope. Supplier, providing services at Nokia facilities, including (Nokia's) customer sites,
shall ensure that its personnel act in accordance with Nokia values and Code of Conduct.

Working time and time off

Manager shall ensure that employees can perform assigned tasks efficiently without exceeding
the maximum working hours as defined by local labor laws or applicable collective agreements.
Supplier shall ensure that employees have at least one day off per seven-day week, and that
overtime work is voluntary. Holidays (e.g., public holidays) and leaves of absence (e.g., medical
or parental) shall comply with local labor laws or applicable collective agreements.

Compensation and benefits

Manager shall provide all employees (permanent, temporary, apprentices and contract workers)
with fair compensation (wages /salaries) meeting or exceeding local legal and industry minimum
standards, for regular as well as overtime work. Supplier shall also provide employees with
benefits to reward contributions, skills and behavior considered vital to success. Compensation
and benefits shall be aligned with relevant company policies.

Fair treatment

Manager shall ensure that employees at its facilities are treated with respect and dignity, equal
opportunity and are safe from abuse, harassment or bullying of any kind (e.g., physical, verbal,
mental, sexual, racial, cultural, age or disability related). Supplier shall ensure company rules /
guidelines are communicated to employees. Supplier shall ensure that disciplinary procedures
prohibit physical punishment and do not support financial deductions, or the threat thereof.

Performance management

Manager should have a system to manage employee performance. Supplier should ensure
individual objectives are derived from company strategy and policies. Supplier should ensure
performance is evaluated fairly and objectively, against defined criteria and on a periodic basis, to
identify ways to improve performance.

Communication and coordination

Manager shall ensure that information relevant to employees (about, e.g., business activities,
changes and results) is communicated across the organization. Supplier shall ensure employees
can share such information fast enough to be able to align their activities efficiently. Supplier shall
respect the right of all employees to form and join trade unions of their choice and to bargain
collectively, and in cases this is restricted by law, facilitate parallel means to ensure that
individuals or groups are able to raise concerns to the attention of the management.

Employee satisfaction

Manager should have the means to evaluate and improve employee satisfaction. A company of
substantial size (i.e. headcount exceeding 100) should have an employee satisfaction program
based on employee opinion surveys and should take action based on the results of the program.

Feedback and complaint channels

Manager shall have a system through which employees can give feedback or complain about
unethical conduct, unfair treatment or practices, violation of company values, policies and
procedures, or improvement ideas and suggestions. Management shall, when appropriate, act
upon this feedback and handle it confidentially and anonymously. Management shall ensure that
there are no adverse consequences as a result of giving feedback.

MANAGEMENT RESPONSIBILITY
Company values and business conduct
Manager shall have an ethical conduct policy, such as a code of conduct, defining how Supplier
understands and manages the ethical impacts of its business operations and reflecting its
company values and culture. The policy shall reflect respect for human rights and demonstrate
commitment to them, ethical business conduct and to continuous improvement.
Management shall ensure all relevant personnel is trained in and aware of the ethical conduct
policy and related practices and risks and shall be able to provide evidence of employee
awareness. Records of training shall be kept.
Environment

Manager shall have an environmental policy, defining how Supplier manages environmental
issues related to its business. The policy shall state a commitment to environmental protection,
pollution prevention, compliance with environmental legislation and continuous improvement.
Management shall be able to provide evidence of employee awareness.

Human resources

Manager shall have a Human Resources (HR) policy(ies), defining how Supplier manages its
employees. The policy shall be applicable locally and globally, as relevant, and ensure
employees are treated with respect and dignity and in compliance with local labour law and
recognized international labour standards (i.e. ILO and relevant UN conventions). The policy(ies)
shall cover, for example, recruitment and exit, occupational health and safety and equal
opportunity. Where applicable, it shall cover also temporary labor and employees working outside
Supplier’s premises (e.g., at Nokia’s premises). Management shall ensure that the associated HR
processes are communicated and understood by HR personnel.

Programs for improving environmental and ethical performance

Manager shall set environmental and labor condition requirements (e.g., occupational health and
safety, ethical conduct) for its sub-suppliers, including waste handling/recycling sub-suppliers.
Evaluate their performance and set improvement targets. The requirements shall be aligned with
Nokia requirements. If a sub-supplier is used for waste disposal, Supplier shall ensure it is
appropriately authorized and licensed.

INFORMATION SYSTEM:
It include GPRS, SMS, MMS, NET BROWSING, BLUETOOHT, High Quality Music
(Xpress 5310 and 5800) TOUCH SCREEN, SENSOR MONITOR SCREEN.
It helps to gain market share and market penetration in 3rd generation. It even join hands
with Hewlett Packard for software designing to compete with in market.
It’s competitors having low quality music player and lack in hard ware technology
components but rated high in software tools. Nokia is also having advantage on high
capacity of storing data. The N-96 is giving 24G.B memory.

3 Conclusion

Crainer (1995) said, building business through elasticity may cause risks to disperse the
power of a brand, and to influence consumers’ loyalties. Nokia has been successful at
brand stretching from a paper manufacturer to supply mobile phones and network
service.

This report has argued about the kind of technology consumer need. “How to promote
the future of phones?” Nokia has already joint with Hewlett Packard (HP) Corporation
Company. Nokia has a considerable opportunity for enlarging its market size into PC
users who prefers mobile phone compatible with PC device. Nokia has established some
types of mobile phones that are similar with handhold PC, like Nokia 9210, or Nokia
9110. These kinds of mobile phone have diversified functions such as color screen,
connecting with Internet, and interacting with PC software. For instance, Nokia 9210 and
Nokia 9110 consist of Microsoft Word, Microsoft Excel, and Microsoft Power Point and
other PC software’s.
Nokia does not promote these kinds of product deeply and widely. It seems that Nokia
can not successfully join into the new market. Comparing with other brands. Nokia is
more expensive than its competitors. As the limited technological resources Nokia can
not improve its technology to attach with new PC age. For example a comparison
between Nokia and Sony in terms of its technological development is that Nokia has less
abilities to develop high technological mobile phones which combine with PDA or
computer than Sony. Sony also has combine with Erisson to produce mobile phones and
to improve its technological development.
The environment policy is also one of the most important business strategies for Nokia
but it seems does not be operated well. Nokia develops recycled batteries but while
customers change different type of mobile phones sometimes the batteries cannot be
used. Nokia is successful in sailing new products and building consumers loyalties.
There is a conflict between the environment policies and promotion activities. Nokia has
responsibilities to change its promotion and development plans.

4 Recommendation
Nokia Company can be classified as market leader in mobile phone market and it can be
easily observe their wide range of product which may be too often to change its model
within one series e.g., Nokia 3210 until now Nokia 3350. Despite the rapid change in
one series it still looks quite similar as the old model which has just launched in the short
period before. Because of this problem in this report it recommends Nokia to launch the
product timely and Nokia should have product life- plan in order to inform and ensure the
end-users who need to buy a really new model. Nobody in the real world is willing to buy
the product which is going to change and obsolete in the next few days. These can be
helping Nokia in the aspect of customer’s satisfaction and give the chance to the users to
select.
Nokia has already become a partner of Hewlett Packard i.e. HP where they specialize at
computer tools so it was a good chance for Nokia to compete with the new competitors
who specialize at computer such as Sony, Samsung and other companies. Nokia mobile
company is too strong for Sony and other new comers to compete with it. In this report it
recommends Nokia to take this emerge opportunity to come over those competitors,
because Nokia & HP are strong enough to be the market leader as well as it was doing
now. Nokia has highest price range compares with all brands we can just recommend
Nokia that if price is floated unreasonably to the end-users it is not the good way for
Nokia to achieve a long term goals. Reasonable price is the best way for Nokia to gain
both profitable and customer’s satisfaction.

5 References
5.1 Books
 Crainer, Stuart (1995), “The Real Power of Brands”, published by Great Britain, pp
122-137
 Merriden, Trevor (2001), “Business the Nokia Way”, October, published by
Capstone Publishing Limited
 Zheng, Wen Bi (2001), “A Strategic Approach of Building National Techonology
Strength – Finland as Case Study”, 30 June

5.2 Website
 BBC Online News (2001), “Promoting the future of phones”, 23 December,
(http://news.bbc.co.uk/1/hi/sci/tech/1723738.stm)
 Corporation Nokia (2002), “Nokia Connecting People,” 06 Auguest,
http://www.Nokia.com and http://www.Nokiainfo.com
 Liu, Wei Yi (2001), “The Global Enterprise of Finnish: Nokia” 26 June
(http://home.kimo.com.tw/liutaho/A54.htm)