BUSINESS ORGANIZATION MANAGEMENT NOKIA

NAME: SHALINI DEVI A/P MANOHARAN ID NUM: DCA 07-04101148 LEC NAME: MR SELVAMATHAN

SUBMISSION DATE: 28 MAY 2012

TABLE OF CONTENT

INTODUCTION

Nokia is a multinational corporation engaged in the manufacturing of mobile phones devices, in converging internet and communication industries, having about 132,000 employees working worldwide. The organization is the Worlds largest mobile manufacturing company and is operational is 150 different countries having an approximate global annual sales revenue of 42 billion and operating profit of 2 billion in the preceding year 2010. The organization has a market share of about 28.9% as of the preceding year 2010 and is still the market leader in the world of mobile phones. Nokia Corporation has a history of 146 years and it wasn't the way it is today, it took Nokia decades to reach at this point. The first Nokia century began with Fredrik Ides tams paper mill on the banks of the Nokian virtual River. Between 1865 and 1967, the company would become a major industrial force, but it took a merger with a cable company and a rubber firm to set the new Nokia Corporation on the path to electronics. From 1968-91, the newly formed Nokia Corporation was ideally positioned for a pioneering role in the early evolution of mobile communications. As European telecommunications markets were deregulated and mobile networks became global, Nokia led the way with some iconic products. In 1992, Nokia decided to focus on its telecommunications business. This was probably the most important strategic decision in its history. As adoption of the GSM standard grew, the CEO put Nokia at the head of the mobile telephone industrys global boom and made it the world leader before the end of the decade. And in the current century Nokias story continues with 3G, mobile multiplayer gaming, multimedia devices and a look to the future.

ABOUT NOKIA
1865: Nokia Company is founded as a maker of pulp and paper. 1898: Finnish Rubber Works is founded. 1912: Finnish Cable Works is formed. 1915: Nokia shares are first listed on the Helsinki exchange. 1967: Nokia merges with Finnish Rubber Works and Finnish Cable Works to form Nokia Corporation. 1979: Mobira Oy is formed as a mobile phone company. 1981: The first international cellular system, the Nordic Mobile Telephone network, comes on line, having been developed with the help of Nokia. 1982: Nokia acquires Mobira, which later becomes the Nokia Mobile Phones division. 1986: Company markets internationally the first Nokia mobile telephone. 1993: The first Nokia digital cellular phone hits the market. 1998: Nokia surpasses Motorola as the world's number one maker of mobile phones.

Company overview
Based in Espoo, Finland, Nokia Corporation is a mobile-communications company, primarily offering voice-centric mobile telephones, enhanced communicators, entertainment and gaming devices, and media and imaging phones. It is also one of the top four suppliers of wireless infrastructure. As of January 1, 2008, three mobile device business groups, Mobile Phones, Multimedia and Enterprise Solutions, and the supporting horizontal groups were replaced by an integrated business segment, Devices & Services. Nokias infrastructure and related services business is conducted through Nokia Siemens Networks, a separate company jointly owned by Nokia and Siemens and consolidated by Nokia. On October 16, 2009, NOK and Accenture announced the completion of Accenture's acquisition of Nokia's Symbian Professional Services, which was initially announced on July 17, 2009. With this transfer, Accenture assumes full ownership of Nokia's Symbian Professional Services unit responsible for Symbian OS customer engineering and customer support. Effective from October 16, 2009, the acquisition is a natural continuation of Nokia's Symbian acquisition in 2008, creating an independent provider of professional services in the Symbian ecosystem. As a result of the transaction, 157 people were transferred from Nokia to Accenture. Further information about the Company can be obtained from its website: www.nokia.com. The Company operates on a calendar year basis. Key investment considerations as identified by the firms are like, Key Positive Arguments Key Negative Arguments Competitive Position Leading provider of wireless technology, including mobile handsets, base stations, transmission equipment, and wireless LAN products Launch of new Windows 7.5 smartphones based on Mango software. Nokia Corporations dominant intellectual property rights in WCDMA provide significant barriers to entry Significant production advantages Compelling Fundamentals Solid cash flow and balance sheet Improved 3G traction and market share gains Plans for share repurchase and increase of dividends Growth Improving product portfolio NOK-MSFT joint venture for developing more user-friendly operating system will help drive market share. Nokia Corporation has strengthened its offerings in the mid and high end portfolio Nokia-Siemens joint venture creates the third largest communications infrastructure vendor worldwide, and creates compelling synergies and economies of scale. Strong volume growth expected due to increased shipments of dual- sim handsets in emerging countries. Competitive Pressure Mobile handset market is highly competitive and consumer-based in nature Increased competition from AAPLs iPhone and other

android-based devices .Lack of low-end smartphones as well as few new product launches. Pricing pressure from Korean and Chinese vendors Other top players in handsets like, Motorola, Samsung, Sony Ericsson, and LG have re-established profitable businesses Growth Impediments Handset growth rate is expected to decelerate Potential adverse macroeconomic conditions Emerging markets handset sales generate less cash due to lower ASP on handset devices. Fundamental Risks Integration risks and execution risk involved with MSFT and its new Windows Phone 7 software in NOKs handsets. Declining trend in ASP is expected to continue Weaker margins Overhang on renegotiation of cross licenses between NOK and QCOM Supply chain constrain caused due to the recent earthquake in Japan. Delay in the launch of Window based smartphones. Nokia reports in , several analysts translate back and forth between and . Price per share is always in $.November 8, 2011Long-Term Growth NOK is aggressively realigning its business for long-term growth of sales, profits, market share as evidenced by the recent initiatives taken in CDMA and Networks businesses.

NOKIA HISTORY
Nokia Corporation is the world's largest manufacturer of mobile phones, with a worldwide market share of about 27 percent, far surpassing the number two player, Ericsson, which has about 17 percent. About two-thirds of the company's net sales are generated by the Nokia Mobile Phones business group. Nokia's other main business group is Nokia Networks, which is responsible for about 30 percent of net sales. Nokia Networks is a leading global supplier of infrastructure for mobile, fixed, broadband, and Internet Protocol (IP) networks. With a sales network that spans 130 nations, Nokia Corporation generated more than half of its sales in Europe, a quarter in the Americas, and about 22 percent in the Asia-Pacific region. Over the course of its more than 135 years in business, the company has evolved from a concentration in pulp, paper, and other basic industries to a focus on telecommunications. 19th-Century Origins Originally a manufacturer of pulp and paper, Nokia was founded as Nokia Company in 1865 in a small town of the same name in central Finland. Nokia was a pioneer in the industry and introduced many new production methods to a country with only one major natural resource, its vast forests. As the industry became increasingly energy-intensive, the company even constructed its own power plants. But for many years, Nokia remained an important yet static firm in a relatively forgotten corner of northern Europe. Nokia shares were first listed on the Helsinki exchange in 1915. The first major changes in Nokia occurred 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. During the early 1960s Nokia began to diversify in an attempt to transform the company into a regional conglomerate with interests beyond Finnish borders. Unable to initiate strong internal growth, Nokia turned its attention to acquisitions. The government, however, hoping to rationalize two underperforming basic industries, favored Nokia's 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. 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.

In 1967 Nokia set up a division to develop design and manufacturing capabilities in data processing, industrial automation, and communications systems. The division was later expanded and made into several divisions, which then concentrated on developing information systems, including personal computers and workstations, digital communications systems, and mobile phones. Nokia also gained a strong position in modems and automatic banking systems in Scandinavia. Oil Crisis, Corporate Changes: 1970s Nokia continued to operate in a stable but parochial manner until 1973, when it was affected in a unique way by the oil crisis. Years of political accommodation between Finland and the Soviet Union ensured Finnish neutrality in exchange for lucrative trade agreements with the Soviets-mainly Finnish lumber products and machinery in exchange for Soviet oil. By agreement, this trade was kept strictly in balance. But when world oil prices began to rise, the market price for Soviet oil rose with it. Balanced trade began to mean greatly reduced purchasing power for Finnish companies such as Nokia. Although the effects were not catastrophic, the oil crisis did force Nokia to reassess its reliance on Soviet trade as well as its international growth strategies. Several contingency plans were drawn up, but the greatest changes came after the company appointed a new CEO, Kari Kairamo, in 1975. Kairamo noted the obvious: Nokia was too big for Finland. The company had to expand abroad. He studied the expansion of other Scandinavian companies and, following their example, formulated a strategy of first consolidating the company's business in Finland, Sweden, Norway, and Denmark, and then moving gradually into the rest of Europe. After the company had improved its product line, established a reputation for quality, and adjusted its production capacity, it would enter the world market. Meanwhile, Nokia's traditional; heavy industries were looking increasingly burdensome. It was feared that trying to become a leader in electronics while maintaining these basic industries would create an unmanageably unfocused company. Kairamo thought briefly about selling off the company's weaker divisions, but decided to retain and modernize them. He reasoned that, although the modernization of these low-growth industries would be very expensive, it would guarantee Nokia's position in several stable markets, including paper, chemical, and machinery productions, and electrical generation. For the scheme to be practical, each division's modernization would have to be gradual and individually financed. This would prevent the bleeding of funds away from the all-important effort in electronics while preventing the heavy industries from becoming any less profitable. With each division financing its own modernization, there was little or no drain on capital from other divisions, and Nokia could still sell any group that did not succeed under the new plan. In the end, the plan prompted the machinery division to begin development in robotics and automation, the cables division to begin work on fiber optics, and the forestry division to move into high-grade tissues.

Rise of Electronics: 1980s Nokia's most important focus was development of the electronics sector. Over the course of the 1980s, the firm acquired nearly 20 companies, focusing especially on three segments of the electronics industry: consumer, workstations, and mobile communications. Electronics grew from ten percent of annual sales to 60 percent of revenues from 1980 to 1988. In late 1984 Nokia acquired Salora, the largest color television manufacturer in Scandinavia, and Luxor, the Swedish state-owned electronics and computer firm. Nokia combined Salora and Luxor into a single division and concentrated on stylish consumer electronic products, since style was a crucial factor in Scandinavian markets. The Salora-Luxor division was also very successful in satellite and digital television technology. Nokia purchased the consumer electronics operations of Standard Elektrik Lorenz A.G. from Alcatel in 1987, further bolstering the company's position in the television market to the third largest manufacturer in Europe. In early 1988 Nokia acquired the data systems division of the Swedish Ericsson Group, making Nokia the largest Scandinavian information technology business. Although a market leader in Scandinavia, Nokia still lacked a degree of competitiveness in the European market, which was dominated by much larger Japanese and German companies. Kairamo decided, therefore, to follow the example of many Japanese companies during the 1960s and negotiate to become an original equipment manufacturer, or OEM, to manufacture products for competitors as a subcontractor. Nokia manufactured items for Hitachi in France, Ericsson in Sweden, Northern Telecom in Canada, and Granada and IBM in Britain. In doing so it was able to increase its production capacity stability. There were, however, several risks involved, those inherent in any OEM arrangement. Nokia's sales margins were naturally reduced, but of greater concern, production capacity was built up without a commensurate expansion in the sales network. With little brand identification, Nokia feared it might have a difficult time selling under its own name and become trapped as an OEM. In 1986 Nokia reorganized its management structure to simplify reporting efforts and improve control by central management. The company's 11 divisions were grouped into four industry segments: electronics; cables and machinery; paper, power, and chemicals; and rubber and flooring. In addition, Nokia won a concession from the Finnish government to allow greater foreign participation in ownership. This substantially reduced Nokia's dependence on the comparatively expensive Finnish lending market. Although there was growth throughout the company, Nokia's greatest success was in telecommunications. Having dabbled in telecommunications in the 1960s, Nokia cut its teeth in the industry by selling switching systems under license from a French company, Alcatel. The Finnish firm got in on the cellular industry's ground floor in the late 1970s, when it helped designs the world's first international cellular system. Named the Nordic Mobile Telephone (NMT) network, the system linked Sweden, Denmark, Norway, and Finland. A year after the network came on line in 1981, Nokia gained 100 percent control of Mobira, the Finnish mobile phone company that would later become its key business interest as the Nokia Mobile Phones division. Mobira's regional sales were vastly improved, but Nokia was still limited to OEM production on the international

market; Nokia and Tandy Corporation, of the United States, built a factory in Masan, South Korea, to manufacture mobile telephones. These were sold under the Tandy name in that company's 6,000 Radio Shack stores throughout the United States. In 1986, eager to test its ability to compete openly, Nokia chose the mobile telephone to be the first product marketed internationally under the Nokia name; it became Nokia's 'make or break' product. Unfortunately, Asian competitors began to drive prices down just as Nokia entered the market. Other Nokia products gaining recognition were Salora televisions and Luxor satellite dishes, which suffered briefly when subscription programming introduced broadcast scrambling. The company's expansion, achieved almost exclusively by acquisition, had been expensive. Few Finnish investors other than institutions had the patience to see Nokia through its long-term plans. Indeed, more than half of the new shares issued by Nokia in 1987 went to foreign investors. Nokia moved boldly into Western markets; it gained a listing on the London exchange in 1987 and was subsequently listed on the New York exchange. Crises of Leadership, Profitability in the Late 1980s and Early 1990s Nokia's rapid growth was not without a price. In 1988, as revenues soared, the company's profits, under pressure from severe price competition in the consumer electronics markets, dropped. Chairman Kari Kairamo committed suicide in December of that year; not surprisingly, friends said it was brought on by stress. Simo S. Vuorileto took over the company's reins and began streamlining operations in the spring of 1988. Nokia was divided into six business groups: consumer electronics, data, mobile phones, telecommunications, cables and machinery, and basic industries. Vuorileto continued Kairamo's focus on high-tech divisions, divesting Nokia's flooring, paper, rubber, and ventilation systems businesses and entering into joint ventures with companies such as Tandy Corporation and Matra of France. In spite of these efforts, Nokia's pretax profits continued to decline in 1989 and 1990, culminating in a loss of US$102 million in 1991. Industry observers blamed cutthroat European competition, the breakdown of the Finnish banking system, and the collapse of the Soviet Union. But, notwithstanding these difficulties, Nokia remained committed to its high-tech orientation. Late in 1991, the company strengthened that dedication by promoting Jorma Ollila from president of Nokia-Mobira Inc. (renamed Nokia Mobile Phones Ltd. the following year) to group president. Leading the Telecommunications Revolution: Mid-1990s and Beyond Forbes's Fleming Meeks credited Ollila with transforming Nokia from 'a moneylosing hodgepodge of companies into one of telecommunications' most profitable companies.' Unable to find a buyer for Nokia's consumer electronics business, which had lost nearly US$1 billion from 1988 to 1993; Ollila cut that segment's workforce by 45 percent, shuttered plants, and centralized operations. Having divested Nokia Data in 1991, Nokia focused further on its telecommunications core by selling off its power unit in 1994 and its television and tire and cable units the following year.

The new leader achieved success in the cellular phone segment by bringing innovative products to market quickly with a particular focus on ever-smaller and easier-to-use phones featuring sleek Finnish design. Nokia gained a leg up in cellphone research and development with the 1991 acquisition of the United Kingdom's Techno phone Ltd. for US$57 million. The company began selling digital cellular phones in 1993. Ollila's tenure brought Nokia success and with it global recognition. The company's sales more than doubled, from Fmk 15.5 billion in 1991 to Fmk 36.8 billion in 1995, and its bottom line rebounded from a net loss of Fmk 723 million in 1992 to a Fmk 2.2 billion profit in 1995. Securities investors did not miss the turnaround: Nokia's market capitalization multiplied ten times from 1991 to 1994. In late 1995 and early 1996, Nokia suffered a temporary setback stemming from a shortage of chips for its digital cellular phones and a resultant disruption of its logistics chain. The company's production costs rose and profits fell. Nokia was also slightly ahead of the market, particularly in North America, in regard to the shift from analog to digital phones. As a result, it was saddled with a great number of digital phones it could not sell and an insufficient number of analog devices. Nevertheless, Nokia had positioned itself well for the long haul, and within just a year or two it was arch-rival Motorola, Inc. that was burdened with an abundance of phones it could not sell&mdashlog ones&mdash Motorola was slow to convert to digital. As a result, by late 1998, Nokia had surpassed Motorola and claimed the top position in cellular phones worldwide. Aiding this surge was the November 1997 introduction of the 6100 series of digital phones. This line proved immensely popular because of the phones' small, lightweight and superior battery life. First introduced in the burgeoning mobile phone market in China, the 6100 soon became a worldwide phenomenon. Including the 6100 and other models, Nokia sold nearly 41 million cellular phones in 1998. Net sales increased more than 50 percent over the previous year, jumping from Fmk 52.61 billion to Fmk 79.23 billion. Operating profits increased by 75 percent, while the company's skyrocketing stock price shot up more than 220 percent, pushing Nokia's market capitalization from Fmk 110.01 billion to Fmk 355.53 billion. Not content with conquering the mobile phone market, Nokia began aggressively pursuing the mobile Internet sector in the late 1990s. Already on the market was the Nokia 9000 Communicator, a personal all-in-one communication device that included phone, data, Internet, e-mail, and fax retrieval services. The Nokia 8110 mobile phone included the capability to access the Internet. In addition, Nokia was the first company to introduce a cellular phone that could be connected to a laptop computer to transmit data over a mobile network. To help develop further products, Nokia began acquiring Internet technology companies, starting with the December 1997, US$120 million purchase of Ipsilon Networks Inc., a Silicon Valley firm specializing in Internet routing. One year later, Nokia spent Fmk 429 million for Vienna Systems Corporation, a Canadian firm focusing on Internet Protocol telephony. Acquisitions continued in 1999, when a further seven deals were completed, four of which were Internet-related. Meanwhile, net sales increased a further 48 percent in 1999, while operating profits grew by 57 percent; riding the late 1990s high tech stock boom, the market capitalization of Nokia took another huge leap, ending

the year at EUR 209.37 billion. Nokia's share of the global cellular phone market increased from 22.5 percent in 1998 to 26.9 percent in 1999, as the company sold 76.3 million phones in 1999. Nokia's ascendance to the top of the wireless world by the end of the 1990s could be traced to the company being able to consistently, over and over again, come out with high-margin products superior to those of its competitors and in tune with market demands. The continuation of this trend into the 21st century was by no means certain as the increasing convergence of wireless and Internet technologies and the development of the third generation of wireless technology were predicted to open Nokia up to new and formidable competitors. Perhaps the greatest threat was that chipmakers such as Intel would turn mobile phones into commodities just as they had previously done with personal computers; the days of the $500 Nokia phone were potentially numbered. Nevertheless, Nokia's 25 percent profit margins were enabling it to spend a massive US$2 billion a year on research and development and continue to churn out innovative new products, concentrating on the various standards being developed for the third generation wireless networks.

NOKIA mission, values, AND GOALS

Company Perspectives Nokia is a leading international communications company, focused on the key growth areas of wire line and wireless telecommunications. Nokia is a pioneer in digital technology and wireless data communications, continuously bringing innovations to the highly competitive and growing telecommunications markets. Nokia is also actively involved in international R & D cooperation, including the development of the standards for third generation mobile telephony.

Mission
Customer-To maintain customer confidence by continuing to provide quality service specifically designed to meet their needs. Market-To be recognized as a market innovator in the mobile phone industry to continuing to improve our business practice. Business-To ensure the team has a complete understanding of all Mobile Network Internal Systems and Procedures and that each team member is responsible for compliance with the Business Management System. Training-To develops ongoing training strategies to empower personnel with skill levels essential for future company success. The Team-To create the best possible working environment, promoting career enhancement and job security, encouraging trust in the company and loyalty to the

Vision "Connecting people" is now connecting people to what matters - whatever that means for each person - giving them the power to make the most of every moment, everywhere, any time. Connecting the "we" is more powerful than just the individual. That's how Nokia is needed to help make the world a better place for everyone.

Goals and objectives To build great mobile product. To help people feel near to what matters to them. To enable billions of people to get more of lifes opportunities through mobiles. To capture volume and value growth to connect the next billion people to the Internet in developing growth markets.

Slogan and logos

Slogan:

KNOW OUR PAST.CREATE THE FUTURE

Logos:

Nokia Company logo is founded in Tampere on 1865, incorporated in nokia on 1871.

The brand logo of Finnish Rubber Works is founded in Helsinki in 1898. This logo is from 1965 to 1966.

The Nokia Corporation "arrows" logo is used before the "Connecting People" logo.

Nokia introduced its "Connecting People" advertising slogan, coined by Ove Strandberg and used since 1992. This earlier version of the slogan used Times Roman SC (Small Caps) font.

Nokia's current logo is used since 2006, with the redesigned "Connecting People" slogan. This slogan originally used Nokia's proprietary 'Nokia Sans' font, designed by Erik Spiekermann. This was replaced in 2011 with the 'Nokia Pure' font designed by Dalton Maag.

Nokia Siemens Networks logo is founded in 2007.

Some achievement for nokia Ranked No 1 Most Trusted Brand Survey by Brand Equity, 2008 Ranked as the Most Respected Company in Indian Consumer Durables Sector in 2007 as per an annual survey conducted by Business World, Indias leading business weekly Ranked the No 1. MNC in India by Business World, Indias leading business weekly, 2006 Ranked as the No. 1 telecommunications equipment vendor in the country by Voice &Data for five consecutive years 2008, 2007, 2006,2005 and 2004 Ranked as the 9th Most Powerful Brand by Mill ward Browns Brands 2008 Ranked worlds 4th Most Valuable Brand by Inter brand, 2007 Ranked Asias Most Trusted Brand by the Media-Syncopate, 2006

Stock Nokia, a public limited liability company, is the oldest company listed under the same name on the Helsinki Stock Exchange (since 1915). Nokia's shares are also listed on the Frankfurt Stock Exchange (since 1988) and New York Stock Exchange (since 1994).

In 1 June 2011 Nokia shares dropped to their lowest in more than 13 years. Nokia shares fell as much as 10 percent, extending their previous day's by 18 percent fall. For fiscal Q2 2011 ending in June 2011, Nokia reported a net loss of 492 million EUR, despite a 430 million EUR payment from Apple. Nokia cited decline in its mobile phone business as the primary cause of the loss. Corporate culture The Nokia House, Nokia's head office in Keilaniemi, Espoo, Finland. Nokia's official corporate culture manifesto, The Nokia Way, emphasizes the speed and flexibility of decision-making in a flat, networked organization, although the corporation's size necessarily imposes a certain amount of bureaucracy. The official business language of Nokia is English. All documentation is written in English, and is used in official intra-company spoken communication and e-mail. Until May 2007, the Nokia Values were Customer Satisfaction, Respect, Achievement, and Renewal. In May 2007, Nokia redefined its values after initiating a series of discussions worldwide as to what the new values of the company should be. Based on the employee suggestions, the new values were defined as: Engaging You, Achieving Together, and Passion for Innovation and Very Human.

NOKIA PRODUCTS
Product releases

Reduction in size of Nokia mobile phones

Models 9000, 9110, .

9210, 9300 and 9500

Nokia launched its Nokia 1100 handset in 2003, with over 200 million units shipped, was the best-selling mobile phone of all time and the world's top-selling consumer electronics product.[54] In May 2007, Nokia released its first touch screen phone, the Nokia 7710, which was also a huge success. In November 2007, Nokia announced and released the Nokia N82, its first N-series phone with Xenon flash. At the Nokia World conference in December 2007, Nokia announced their "Comes with Music" program: Nokia device buyers are to receive a year of complimentary access to music downloads. The service became commercially available in the second half of 2008. Nokia Productions was the first ever mobile filmmaking project directed by Spike Lee. Work began in April 2008, and the film premiered in October 2008. In 2008, Nokia released the Nokia E71 which was marketed to directly compete with the other BlackBerry-type devices offering a full "qwerty" keyboard and cheaper prices. Nokia announced in August 2009 that they will be selling a high-end Windows-based mini laptop called the Nokia Booklet 3G. On 2 September 2009, Nokia launched two new music and social networking phones, the X6 and X3.[57] The Nokia X6 features 32GB of on-board memory with a 3.2" finger

touch interface and comes with a music playback time of 35 hours. The Nokia X3 is a first series 40 Ovi Store-enabled device. The X3 is a music device that comes with stereo speakers, built-in FM radio, and a 3.2 megapixel camera. On 10 September 2009, Nokia unveiled the 7705 Twist, a phone sporting a square shape that swivels open to reveal a full QWERTY keypad, featuring a 3 megapixel camera, web browsing, voice commands and weighting around 3.44 ounces.

Mobiles Nokia 1000 series Ultrabasic series Nokia 2000 series Basic series Nokia 3000 series Expression series Nokia 5000 series Active series Nokia 6000 series Classic Business series Nokia 7000 series Fashion and Experimental series Nokia 8000 series Premium series Nokia C-series Nokia E-series Nokia N-series Nokia X-series Nokia Asha series Nokia Lumia series

Other products Mini laptops- Nokia Booklet 3G Internet Tablets

GPS products (Global Positioning System)

Nokia 5140 GPS Cover Nokia wireless GPS module LD-1W Nokia wireless GPS module LD-3W Nokia Bluetooth GPS Module LD-4W Navigation Kit for Nokia 770 Internet Tablet, including LD-3W GPS receiver and software Nokia 330 Navigator, those support an external TMC module. Nokia 500 Navigator

Accessories Nokia produces accessories to their products too many to list here. Such accessories include:

Carrying and styling: carrying cases, phone jewelry, shells

Car solutions: car kits, car phones, portable solutions, mobile holders, car accessories, car navigation Headsets: audio adapters, Bluetooth headsets, wired headsets, loop sets Memory cards and cables Music related products: audio adapters, music packs, music streaming, speakers Navigation: GPS modules, navigation kits, car navigation Home and office: desk stands, imaging, wireless digital pens, wireless keyboards, mobile TV receivers Power: batteries, chargers, charger adapters Internet Stick: Nokia HSPA-modem CS-15 operates in 3G network, with maximum download speeds of 14.4 Mbit/s and uploads speeds of 2.1 Mbit/s.

Telephone switches

Nokia DX 200 Nokia DX 220 Nokia DX 220 Compact

Discontinued product lines

Personal computers Computer displays Digital television ADSL modems WLAN products Military communications and equipment

FINANCIAL ACTIVITIES (5 YRS)

Operating Activities

Fiscal year is January-December. All values EUR millions. Net Income before Extraordinaries Net Income Growth Depreciation, Depletion & Amortization Depreciation and Depletion Amortization of Intangible Assets Deferred Taxes & Investment Tax Credit Deferred Taxes Investment Tax Credit Other Funds Funds from Operations

2007

2008

2009 891M

2010 1.85B

2011 (1.16B)

5-year trend

7.21B 3.99B -

107.63% 44.65% 77.66% 162.92% 1.78B 603M 1.18B 434M 3.11B 1.77B 599M 1.17B (1.2B) 2.43B 1.56B 604M 958M 1.38B 1.78B

1.21B 1.62B 579M 627M 723M 894M -

(1.12B) 144M 7.29B 5.75B

Fiscal year is January-December. All values EUR millions. Extraordinaries Changes in Working Capital Receivables Accounts Payable Other Assets/Liabilities Net Operating Cash Flow Net Operating Cash Flow Growth Net Operating Cash Flow / Sales 0

2007 0

2008 0

2009 0

2010 0

2011

5-year trend

605M

(2.55B) 140M

2.35B 1.28B 1.58B 4.78B

(638M) 137M 0 (1.06B) 1.14B

(2.15B) (534M) 1.2B 3B 0 (1.7B)

(2.33B) 0 3.25B

7.89B 3.2B -

1.44% 59.42% 7.93%

46.97% -76.17% 11.25% 2.94%

15.46% 6.32%

Investing Activities

2007 Capital Expenditures

2008

2009

2010

2011

5-year trend

(872M) (1.02B)

(558M) (679M) (597M) (531M) (679M) (597M) (27M) -

Capital Expenditures (Fixed Assets) (715M) (889M) Capital Expenditures (Other Assets) (157M) (131M) Capital Expenditures Growth Capital Expenditures / Sales Net Assets from Acquisitions -

-16.97% 45.29% -21.68% 12.08% -1.36% -1.60% -1.54% (29M) (131M) (822M) 161M 162M 51M

-1.71% -2.01% 0 (5.96B) 95M 3.86B

Sale of Fixed Assets & Businesses 325M Purchase/Sale of Investments Purchase of Investments Sale/Maturity of Investments Other Uses Other Sources Net Investing Cash Flow Net Investing Cash Flow Growth Net Investing Cash Flow / Sales 37M

(1.73B) (1.77B) 2.91B (3.62B) (9.38B) (4.4B) 1.89B 0 4M 7.6B (2M) 2M 7.31B (45M) 0

(4.95B) (814M) 4.99B 4.68B

(380M) (16M) 168M 129M

(722M) (2.91B) -

(2.15B) (2.42B) 1.5B

-303.19% 26.14% -12.65% 161.85% -5.25% -5.71% 3.87%

-1.41% -5.74%

Financing Activities 2007 Cash Dividends Paid - Total Common Dividends Preferred Dividends Change in Capital Stock 2008 2009 2010 2011 5-year trend

(1.76B) (2.05B) (1.55B) (1.52B) (1.54B) (1.76B) (2.05B) (1.55B) (1.52B) (1.54B) 0 0 0 0 1M 0 1M 1M 0 607M (1.54B) 0 0 0 0 0 (109M) (59M) (50M) 1M (51M) 546M

(2.83B) (3.07B) 0

Repurchase of Common & Preferred (3.82B) (3.12B) 0 Stk. Sale of Common & Preferred Stock 987M Proceeds from Stock Options Other Proceeds from Sale of Stock Issuance/Reduction of Debt, Net Change in Current Debt Change in Long-Term Debt Issuance of Long-Term Debt Reduction in Long-Term Debt Other Funds 0 987M 760M 661M 99M 115M 53M 0 53M 3.57B 2.89B 680M 714M 0 0 0 850M

(2.84B) 131M 3.69B 3.9B 476M 482M

(16M) (34M) 0 0

(209M) (6M) 0 0

2007 Other Uses Other Sources Net Financing Cash Flow Net Financing Cash Flow Growth Net Financing Cash Flow / Sales Exchange Rate Effect Miscellaneous Funds Net Change in Cash Free Cash Flow Free Cash Flow Growth Free Cash Flow Yield 0 0 0 0

2008 0 0

2009 0 0

2010 0

2011

5-year trend

546M

(3.83B) (1.55B) (696M) (911M) (1.1B) 59.68% 54.95% -30.89% -20.64% -2.84% 107M 0 1.64B (995M)

-7.51% -3.05% -1.70% -2.15% (15M) (49M) 0 0 (25M) 0 378M 1.17B 224M 0 1.67B 2.58B

3.33B (1.3B) 5.42B 266M -

340.60% 119.88% 95.09% 138.61% -7.11% NA

NOKIA AREAS OF FOCUS

To achieve their business objective, their strategy focuses on: being the preferred provider of solutions for mobile communications creating personalized communication technology driving open mobile architecture enabling a non-fragmented global mobile services market strengthening and leveraging Nokia, the trusted brand and expanding our business and market position on a global basis. Mobile Communications The aim is to position Nokia as the preferred provider of products and solutions for mobile communications by providing leading communications networks that enable end-to-end service delivery for both cellular and broadband networks. They develop leading high-capacity cellular networks, platforms and user applications for the mobile Internet, end-to-end broadband access solutions and Professional Mobile Radio systems. Personalized Technology They want to strengthen their leadership position in converging personal digital terminal solutions. They build on their core competencies in various key areas, including design and product innovations, brand development, and effective demand or supply network management, to bring new product concepts and associated services to market. Driving Open Mobile Architecture Nokias key commitment is to create a global and open mobile software and services market. They aim to achieve this through strong partnering with customers, suppliers and industry participants, and solid focus on end-to end solutions in all their development activities Strengthening the Brand According to a variety of consumer surveys, the Nokia brand is associated with well-designed, high quality and technologically advanced products and customer services that are also user-friendly. Having invested considerable resources in establishing the Nokia name as the leading brand in mobile communications, they intend to sustain and enhance the brand through aggressive advertising, sponsorship and other marketing activities in all of their principal markets. Its a belief that the leading

market position provides significant opportunities for Nokia to better understand and respond to the usage patterns of end users, and thus enhance the Nokia brand. Expanding the Business For more than a decade, they have actively expanded their business globally. They, therefore benefit from strong economies of scale throughout the organization. Nokias strategy is to continue focused pursuit of global business opportunities by cultivating a strong local presence in all growing markets and pursuing partnering and acquisition opportunities in order to obtain complementary technologies and market positions.

SUSTAINABILITY PERFORMANCE
In 2009, Nokia emerged as the sustainability leader in the technology sector, scoring high in all three sustainability dimensions, i.e., economic, environmental and social. Nokia's solid management system is highlighted by above average corporate governance, risk and crisis management as well as unparalleled supplier management strategies. A clear and well managed innovation process also contributed to its outstanding scores in the economic dimension. Innovation at Nokia is not just aimed at improving technological leadership: environmental and social aspects play an important role in the research and development process. The company's research spending showed a relevant increase over the last three years, with focus on developing technically feasible products based on the concept of 'Design for Environment'. Nokia's commitment to environmental sustainability becomes apparent in activities such as establishing 'Environmental Teams' in each business unit and regularly auditing all environmental data. The company has launched programs such as 'Re-made' to utilize recycled material and has funded research on radio-frequency and health through 'Finnish National Research Program'. The company also stands out in the social dimension with special focus on digital inclusion and stakeholder engagement. In an effort to reduce the digital divide in society, the company has many initiatives in place to improve the affordability of telecommunication focusing on remote regions and on socially challenged people.

INDUSTRY DRIVING FORCES

The growing demand for integrated voice services and data applications forced the communication equipment sector to enter a major technology shift both in the fixed line area and also in mobile networks. Driven by regulations, product design needs to take the usage of chemicals in the production, the energy efficiency, and the generated waste into account. Moreover, take-back programs, greater modularity, and extended producer responsibility are becoming more and more relevant. Environmental and social standards for suppliers in areas such as the use of hazardous substances and working conditions are becoming increasingly important, particularly in emerging economies, where significant reductions in both

infrastructure and handsets costs create relevant markets. Additionally, there are increased calls to reduce the exposure to electromagnetic fields, although the negative health impact emerging overtime is still difficult to assess.

PESt ANALYSIS
Political The external political environment has the potential to impact Nokia significantly especially due to the fact that Nokia is operating on a global scale and must abide to a whole host of nation specific platforms in which the political and legal systems could differ substantially. To its success, Nokia surveys its scope of limits in order to isolate prohibited actions, regulations and aid from the government so as to withstand the international trade (MBA Knowledge Base, 2011). Within the United States Nokia has to devote funds to lobbying on matters relating to patent protection, electronic waste exports and trade barriers in 2011, $500,000 has been spent thus far. Other political aspects that impact Nokia include new and existing laws or regulations, in 2010 Saudi Arabia suspended Blackberrys messaging service a critical core feature and competitive advantage on the grounds of national security illustrating how easily national laws can quickly impact and upset core competitive advantages. Labor laws have also impacted Nokia; Nokia China announced plans to cut the number of employees, to which they were accused of violating Chinese labor laws. Nokia works closely with national authorities in order to gain maximum advantage and to not incur any penalties. Economic Economic factors such as growth rates, interest rates, exchange rates and inflation rates are critically important to Nokia both in the short term and long term. The impact of these factors can have major implications, including how they operate and make decisions such as what should be produced, how it should be produced and what demographic of customer the end product should be targeted toward. Gross Domestic Product for example, dictates what strategies Nokia should implement and consequently what products should be offered in which countries. This helped shape Nokias Next Billion strategy for the emerging markets in which more basic cheaper phones are offered. The volatility of the Indian rupee is another example in which it affected Nokias topline growth, restricting in their ability to increase price to push the costs onto the consumer high inflation within India causes price stability problems. The financial crisis has impacted Nokia as customers within developed nations saw their disposable income decrease, delaying new smartphone purchases or opting for less costly contracts with free phones

Social Very few industries can rival the mobile phone industry in relation to constantly changing consumer tastes. Nokias products have relatively short product lifecycles, this means Nokia has to pay close attention to trends and social tastes. Developments in how mobile phones and smart devices are used have changed over the years, for example, the emergence of camera phones, touch screens and 3G. Failure to implement features when they first emerge can lead to significant market share erosion. Nokia operates in a huge number of markets mainly due to its strong distribution network all of these markets have specific tastes, cultures and expectations; thus, Nokia caters to these differences by providing different models with both subtle and extensive differences throughout their entire range of products. Other social aspects such as advances in the workplace impact Nokia and its workforce; increased use of outsourcing of jobs to other countries, increased demand for work or life balance, and increased demand for job mobility and flexibility. Technological Within the telecommunications industry, specifically OEMs, the speed of change and adoption of new technology impacts incumbents significantly the success of Nokia is based on constant innovation. Nokia analyses research and development advances by competitors evident from their quick adoption of touchscreen technologies and more recently through their research initiatives into devices such as Tablets that are similar to the iPad. Industry advances, for example cellular telephony spectrums 3G and now 4G impact both Nokias business unit and corporate level strategies; examples of the Pareto principle in action. Environmental Changing public attitude towards environmental sustainability as well as product disposal and recycling have transformed considerably over the past decade. Nokia have been proactive with regard to environmental responsibility and sustainability, they put forward that it is integrated into everything we do. From the devices we build and the suppliers we choose, to our mobile solutions that enhance peoples education, livelihoods and health. With regard to product sustainability and the trend in recycling products, Each and every Nokia device is created with the environment in mind. We dont make one-off eco-friendly devices, all the handsets and accessories we produce fulfill our strict environmental criteria. Nokia also reduced the packaging size of most devices by 70% between 2005 and 2010. Nokia has set an aspirational target to reduce greenhouse gas emissions caused during the whole mobile device life cycle over 60% by the year 2020 to the level in 2000. Legal Nokia has over 132,000 employees in 120 countries and thus recognizes the importance of issues that relate to employment regulation as well as employee health and safety. For example, Nokia recently signed an agreement relating to the compensation packages to be received by the employees of Nokia working at the Jucu plant with the Romanian trade union. Product safety and security is another legal issue that is of the most importance to Nokia. All Nokia products are

designed and manufactured to be safe for users. Products have been designed to meet relevant safety guidelines for electromagnetic field emissions. As previously mentioned legal battles over patents and the protection of intellectual property are intense between the leading manufacturers with many manufacturers usually trying to ban the importation of devices they believe infringe upon their patents. To illustrate one example, in June of 2011 Nokia claimed victory in a long running patent battle with Apple Nokia had put forward that Apples iPhone violated at least 7 Nokia patents. As a result of the ruling Apple has now signed a patent license agreement with Nokia. Nokia currently has one of the strongest intellectual property portfolios within the wireless industry that holding over 10,000 patents

Porters Five Forces (Porter, 1985)

Porters Five Forces analysis is used to assess the attractiveness of different industries and it can help illustrate the sources of competition in an industry. The Porters Five Forces analysis has been conducted with attention on each of Nokias SBUs; mobile phones, smart devices and, location and commerce. Porters Five Forces Mobile Phones Threat of Entry of New Competitors HIGH Barriers to entry within the basic mobile phone industry are relatively low, hence Nokia stands to, and currently is subjected to, intense competition on their next billion strategy. The market within emerging markets is dominated by local OEMs and is extremely price competitive illustrating that low cost rival can enter at any time. Nokias awareness of this can be seen in their 20-F filing with the SEC: In the mobile phones segment a different ecosystem is emerging involving very low cost components and manufacturing processes. In particular, the availability of complete mobile solutions chipsets from Media Tek has enabled the very rapid and low cost production of mobile phones by numerous manufacturers in the Shenzhen region of China which have gained significant share in emerging markets. Competitive advantages within distribution have somewhat cushioned the impact to Nokia; however, customer loyalty within emerging economies where disposable income is very low, means that cost will be the overall determinant of the product purchased. Threat of Substitute Products or Services HIGH Within emerging markets the buyers propensity to substitute is relatively high, with the one overarching factor being price. Switching cost is minimal, especially with regard to the handset, rather than the network. If the customer has a laptop and internet connection VOIP services such as Skype could challenge the need for a basic mobile phone. The Bargaining Power of Customers HIGH

The bargaining power of mobile phone customers is high within both developed and developing markets as switching costs are low, and competition between manufacturers is high. Brand loyalty is the only real defense that manufacturers can use to prevent switching; Nokia recently saw its brand value fall $9.9 billion in the Brand Finance Global 500 listings the largest decline of any name. The Bargaining Power of Suppliers LOW Nokia has an extremely complex supply chain that handles 100 billion components, 60 strategic suppliers, and 10 factories worldwide. Nokia strives to build partnerships with its suppliers linking supply chain objectives to corporate objectives; within this supply chain redundancies are built so that no one supplier is critical to the production process. The power is further reduced by Nokias upstream and downstream vertical integration at its own factories as well as by its strong brand and bulk purchase agreements. Many factories and companies exist solely because they are suppliers to Nokia. Nokia constantly ranks amongst the leaders in supply chain management; historically being a strong innovator supply chain best practices have turned ideas into profitable businesses. The Intensity of Competitive Rivalry HIGH Within developed markets the intensity of competition in basic mobile phones has curtailed, with the product line currently in significant decline. Within emerging markets Nokia is facing strong competition not only from the usual players but also domestic firms who are both able to provide innovative basic mobile phones for low cost. China was 21% of Nokias sales in 2010 but sharp decreases in revenue in 2011/2012 are expected. Porters Five Forces Smart Devices Threat of Entry of New Competitors MEDIUM Production of smart devices involves highly advanced research and development divisions; with strong knowledge of patents and proprietary technology critical. Significant investment is needed for any potential competitors to achieve economies of scale; it would be difficult for the new entrant to compete against the incumbents that are already operating on cost and differentiation strategies. Although, the smartphone market does boast attractive growth rates 30% in 2010 and high margins; thus, it is not unfeasible that a new player could enter the market, for example what Apple achieved in 2007. Threat of Substitute Products or Services LOW There are few substitutes for smartphones; those people who require a basic device will purchase a mobile phone; those who want a device for applications and other related services will purchase a smart phone. There may be some pressure from tablet devices; however, these will lack the basic functionality of phone calls. Netbooks and laptops could potentially be a substitute. Because the smartphone serves as a consolidation of several technologies the treat of it being substituted is weak.

The Bargaining Power of Customers HIGH Buyers have high bargaining power and will pay for what they value the most; thus, they have a willingness to switch to more innovative products. Customers are also armed with knowledge about which smartphone platform has the best and most interesting applications, functionality and other factors such as battery life through extensive reviews and information. Bargaining power will be predominantly through switching brands rather than substitution of smartphones overall. Bargaining power is diluted by network providers with the inclusion of long contracts, meaning customers are tied to a phone for typically between 12-24 months.

The Bargaining Power of Suppliers LOW The bargaining power of suppliers over Nokia is relatively low. Through industry leading and prudent supply chain management, Nokia have many fail safes in place if one supplier was to suddenly shut. For the suppliers that do exist Nokia orders in huge quantity and is such an important customer that most suppliers would not want to risk damaging the relationship. The Intensity of Competitive Rivalry HIGH In developed markets competitive rivalry within the smartphone market is intense Nokia, industry leader, faces constant competition from manufacturers such as Apple, HTC, RIM and Samsung. Porters Five Forces Location & Commerce Threat of Entry of New Competitors MEDIUM Barriers to entry within the location and commerce field are high, new entrants face high capital requirements. Nokias acquisition of Navteq in 2007 underwent an antitrust investigation as the European Commission felt that the acquisition could stifle competition in the sector because there was only one other mapmaker with global reach, Tele Atlas. Aerial, satellite and other location based imagery is becoming increasingly available and competitors are offering location based products and services with the map data to both business customers and consumers in order to differentiate their offerings. These developments may encourage new market entrants. Attractive high growth rates and potential innovation within the industry will continue to potentially attract entrants. Threat of Substitute Products or Services HIGH We think that the growing field of web-based data providers in the US and Europe presents a serious threat to Nokias Navteq and Tom Toms Tele Atlas businesses. While these solutions may not work for auto-OEM grade devices, they are in many ways superior for high growth web-based location based services. This could in turn reduce the demand for Navteqs fee based products and services which incorporate the Navteq map database.

The Bargaining Power of Customers HIGH Bargaining power of customers is quite high as new entrants emerge in a fast growing and rapidly changing marketplace. Historically this bargaining power has been low due to the duopoly of Tele Atlas and Navteq. The Bargaining Power of Suppliers LOW Suppliers to Navteq have relatively low bargaining power this is due to the fact that there are minimal supplier agreements. Navteq is vertically integrated with its own team of 1000 geographical data collectors and analysts; this is their main source of competitive advantage. In the future they may seek to outsource street view contractors in order to compete with Googles free offering. The Intensity of Competitive Rivalry MEDIUM Competitive rivalry has increased in recent years with a host of new players joining the historic duopoly of Tele Atlas and Navteq. Firms within the sector are seeing cannibalization of personal navigation devices to smartphones. The leading companies within the sector include; Tele Atlas, Navteq, Garmin, Google and community generated Open Street Map. Recently governmental and quasi-governmental agencies are producing more map data with improved coverage and content available at low costs, if not free of charge. An example of competitive rivalry would be Navteqs competition with Google. Google utilizes an advertising based model in which the provision of the maps and data is freely provided with adverts shown alongside as well as integrated within.

SWOT ANALYSIS OF NOKIAS STRATEGY

There are various tools which can be employed to understand the effectiveness of a companys strategies. SWOT Analysis outlines the Strengths, Weaknesses, Opportunities and Threats facing the operating strategy of a company. Analyzing the effectiveness of strategies, strength and weaknesses can be defined as internal to an organization. The businesses do not necessarily have to correct all its weaknesses however; it should be able to retain its strengths. The key success factor for operating in the targeted market depends on the external factor, i.e. Opportunity. Nokia has numerable opportunities to enlarge its market share, however, they could be faced with a threat which could be challenge posed by an unfavorable trend or development that may lead into absence of defensive marketing action and thus diminish sales and profit.

Strengths Global Products and Image

Nokia is a global company. It not only sells its products to 130countries but also sets up research and development departments in fifteen countries to produce its products in different culture and language needs. For example- English, Dutch German and Chinese.

High Quality Products

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. Meanwhile, it also continuously improves upon the existent markets.

Serving new designs and trends

Nokia launched a wireless game which by use of sms, TV, print media, radio and internet provides clues to help players to solve a mystery. This helps Nokia to attract customers to use its products.

Wide range of products

Nokia has the highest number of product line compared to its competitors Samsung, Ericsson, Motorola etc. Product Warrantee Worldwide no matter where Nokias customers are, if they got a problem with their mobile phones, they can approach any of the Nokias centers. Thus ensuring a good customer service.

Weaknesses High Price

Nokia offers a good range of high quality products at high prices Though the high prices may be justified in terms of the costs to the company but this can act as a weakness in certain sections of the market e.g. the middle-low income group people. Demand is skyrocketing but the price pressure is high.

New product developing problems

Although Nokia provided color screen mobile phones in September 2002, this was late as compared with its competitors such as Sony Ericsson and Samsung. This acted as a weakness as the people had already accepted the range introduced in the market and didnt want to switch.

Opportunities Joint venture in Technology

Nokia has joined with Hewlett Packard Company in technology which has a very good reputation for many years. Nokia thus, has a considerable opportunity to enlarge their market size into PC users who prefer mobile phones compatible with PC device.

Product launch continuously

Nokia uses Total Quality Management which mentions more about training worker program, and makes product of high quality. All employees are well-trained and motivated and consecutively production processes are also developed as well. Nokia has established Research and Development department which develops its product line into modern modification as well quality as the existing products.

New Software Market

As known, the amount of data traffic in mobile networks is growing at a tremendous rate. People around the world are using new mobile services which are directly relevant to personal needs. 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.

Easy Availability

Many mobile phone retail stores, such as, the link, Phone4U and Car phone warehouse, have spread across London in every street. And, of course, every store has not missed the opportunity to choose Nokia as their product line. Consequently, all the customers can be guaranteed that any damage or loss of Mobile phone will be serviced through these retail shops.

Threats Threats in PC Markets

Due to fierce competition in mobile phone market it has caused new technology compatible with PC computer. Sony Ericsson specializes on PC computer now. Sony applied their computer system into mobile phone as well as PC computer on hand at the same time. Furthermore, nowadays people are interested in advance of computer as similar as mobile phone market. In this sharp competition, it is going to be harder for Nokia to grasp customers attention and they will have to focus on outstanding imagination and creativity in their marketing plans.

Fluctuations in Euro exchange rates

Most of the European countries have joined the European Union and thus because of the varied economic conditions, the currency will fluctuate a lot finally effecting the profits of the company.

Blurring of product boundaries

This implies new entrants in the same industry like Sony, Motorola etc. who are producing almost the same product range as Nokia and thus, there is a need to change their models. Keeping in mind the weaknesses and threats, Dan Stein bock in an article called the Nokia revolution outlines the secrets behind the success of Nokia. Apart from the SWOT analysis, the effectiveness of Nokias strategies can also be analyzed looking at the environment in which it operates.

Challenges of growth

The Nokia House, Nokia's head office located by the Gulf of Finland in Keilaniemi, Espoo, was constructed between 1995 and 1997. It is the workplace of more than 1,000 Nokia employees. In the 1980s, during the era of its CEO Kari Kairamo, Nokia expanded into new fields, mostly by acquisitions. In the late 1980s and early 1990s, the corporation ran into serious financial problems, a major reason being its heavy losses by the television manufacturing division and businesses that were just too diverse. These problems, and a suspected total burnout, probably contributed to Kairamo taking his own life in 1988. After Kairamo's death, Simo Vuorilehto became Nokia's Chairman and CEO. In 19901993, Finland underwent severe economic depression, which also struck Nokia. Under Vuorilehto's management, Nokia was severely overhauled. The company responded by streamlining its telecommunications divisions, and by divesting itself of the television and PC divisions. Probably the most important strategic change in Nokia's history was made in 1992, however, when the new CEO Jorma Ollila made a crucial strategic decision to concentrate solely on telecommunications. Thus, during the rest of the 1990s, the rubber, cable and consumer electronics divisions were gradually sold as Nokia continued to divest itself of all of its nontelecommunications businesses. As late as 1991, more than a quarter of Nokia's turnover still came from sales in Finland. However, after the strategic change of 1992, Nokia saw a huge increase in sales to North America, South America and Asia. The exploding worldwide popularity of mobile telephones, beyond even Nokia's most optimistic predictions, caused a logistics crisis in the mid-1990sThis prompted Nokia to overhaul its entire logistics operation. By 1998, Nokia's focus on telecommunications and its early investment in GSM technologies had made the company the world's largest mobile phone manufacturer, a position it would hold for the next 14 consecutive years until 2012. Between 1996 and 2001, Nokia's turnover increased almost fivefold from 6.5

billion euros to 31 billion euros. Logistics continues to be one of Nokia's major advantages over its rivals, along with greater economies of scale.

Reasons Why Nokia Rules the Mobile Phone Market

In spite of the presence of big names in consumer electronics like Samsung, LG, Sony-Ericsson and Motorola, Nokia really rules the mobile phone market all over the world with nearly 40% of the market share with no close competitors. Nokia is certainly the king when it comes to brand value, service and experience. The Finnish mobile giant is clearly No. 1 choice in South East Asia including India and China. How they could reach the top position? 1. Call Quality Nokia is known for its circuitry to handle the RF Reception and providing the best call reception quality. You wont see users complaining much about the noise or the disturbances within Nokia phones unless its a problem of the telecom service provider. So, the primary objective of a mobile phone i.e. to serve us with better and clearer sound when we talk is served by Nokia perfectly. And if you are a person who is accustomed to other mobile phone manufacturers, then you know that even Apple iPhone and Sony Ericsson are guilty of it. 2. Hardware You can be assured of the quality that Nokia provides in your phone hardware. The circuits are far more durable and reliable than any of the other mobile phone available in the market. I amusing a single Nokia phone for 6 years and I had to take it to the service center only once during this period for a trivial problem. That speaks for the truth I am talking about. 3. Battery The Battery life of Nokia mobile phones is longer than many other cellphones available in the market. People who talk a lot prefer Nokia than any other brands. They always know that the battery will not run out in the middle of the call. iPhone has had this problem with battery life in the past and that hasnt been solved yet. Nokia leaves others miles behind when we consider the longevity of the battery. 4. Robustness

Everyone knows that Nokia mobiles are truly rock solid. I want to share my experience with respect to this. I dropped my Nokia the very next day I bought it. I dropped it on the staircase and it bounced to nearly 12 steps down. My heart pumped out with the fear of losing the phone on the second day. But what I found when I reached downstairs is that the phone is fully functional and it only had a few scratch in its body. Since then, it slipped off my hand many a times but it did not refuse to function. Thanks to Nokia for making such rugged phones. It would really be the worst thing if I had to take my phone to service center or had to buy a new one every time I dropped my phone

5. Wide Product Range Nokia has a vast and huge list of mobile phones. Nokia mobile phones are available for every consumer groups, starting from simple and durable phones for the low income groups and highend phones for those who can afford to spend money. So regardless of you being a corporate honcho or a fresher into the world of economy, Nokia has something for you. The sheer ranges of products are enviable and at the same time the success mantra of Nokias dominance. 6. Customer Service The Customer Care of Nokia which they call the Nokia Care handles the complaints very efficiently satisfying their customers. I had a problem with the display of my Nokia Phone. I took it to the Nokia Care and they very quickly fixed it and gave it back. Its just the trust they implement on the customers mind, is really appreciable. Hope you remember the battery bursting incidents of Nokia mobile phones in India. The BL-5C battery, which was the culprit in this case, was promptly replaced with no questions asked. They also helped people with a temporary site to go and put their unique manufacturing id and see if they needed to change the battery or not. Believe me, the call wasnt that easy keeping in mind the number of battery parts they had to change. 7. Reliability Nokia really has become a brand that people can trust upon. The error rates or crash rates of Nokia phones are very low. It will not dump you when you need this phone. And petty may this be but still; Nokia has this trust thing going in favor of it. People can blindly trust Nokia in Asian Countries and not to mention, Nokia has deservingly earned this place. 8. Price The price tag of every Nokia mobile phone is very reasonable. I mean, I can still get a GSM mobile phone for as less as Rs. 1200 in India with all the basic features and that will last long enough to pay me back with my dues.

9. Experience Nokia is the largest cell phone manufacturer in the world with about 40% of market shares with its competitors nowhere near its sales volume. They know the world of mobile phone more than any other. They have ages of experience, hundreds of success stories and dozens of smart handsets in current portfolio. That helps them to evolve and thereby nourish our needs. 10. Marketing Strategy One of the main reasons behind the success of their mobile phones is their marketing strategy. The main source of earning is the popularity of their phones in the Asian market. China is making

Marketing principles of NOKIA

There are many priorities within a business, but in a marketing orientated company like Nokia, many of the following principles will be high on the agenda: 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 accompanies 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

NOKIAS ENTRY INTO CHINA

Initially during 1930s Nokia exported forestry products to china. Again entered china in mid-1980 as a result of decision of Chinese gov.to accept Foreign Direct Investments. Established its first representative office in Beijing in 1985 and began work with just 5 employees. Being an early mover, it easily acquired human resource, other facilities and information at reasonable prices due to absence of competition. Chinese Ministry of Posts and Telecommunications promoted wireless network instead of landlines. Nokias entry through joint ventures helped it improve its competitive position and procure a share in the local market.

NOKIA IN CHINA
The mobile phone trade has grown and developed into a new marketing trend globally, over the past years. The market depicts exemplary conditions for this niche and growth figures have progressed exceptionally, since the beginning of the mid 1990s-2000. There are varied mobile phone brands in the marketplace; one of which is Nokia, which has gained an elevated status over the past years after commencing services in 1985. Nokia manufactures mobile phones for every major protocol and market segment, comprising of GSM, W-CDMA and CDMA. Nokia promotes Internet services inclusive of messaging, applications, media , music, games, maps, etc. through its Ovi platform. Nokias market share for its global device was 31% in 2010, but this was lowered during the first quarter of the fiscal year 2011, to 30%. Nokia have had very productive years in the past, one of which is 1999 conditioning a 48% increase in the market share, which later progressed to 57% ending the year at US$211.05 billion. At the end of the fiscal year 2001, Nokia accumulated net sales amounting to 42.48 Billion, in 2002, the total sales was 40.88 Billion, 40.22 Billion in 2003 and 40.00 Billion in 2004; this changed as time progressed, while transitioning into a bigger, better mobile organization. With rivalry companies such as Apple and Samsung, Nokia presently stands in a secure position dominating the market with advanced mobile handsets and services, but efficient strategies are needed to vibrantly progress. This context primarily focuses on Nokia and its overall activities in the Chinese market. Considering past situations in the marketplace, where new and emerging entrants heighten the level of competition, the mobile phones developed brandishes varied designs and functionalities. China and East Asia prominently secures a conveying role in this exceptional development. China embraces an elevated potential for the mobile market and its growing economy. The company has invested in various ventures situated in China, along with numerous production units. In past years China held a steady position as the second largest market for Nokia phones, following the United States in the 1st quarter of the year 2002. In entering China more intensely with a well-developed business strategy, Nokia is compelled to enhance specific

network relationships with locals. This was done to improve Nokias strategic networks for the upcoming years and meeting the needs of production, particularly in the Asian markets. In order to implement this particular strategy, Nokia had to consider the specified cultural conditions that existing in the Chinese market. Nokias Chosen foreign markets Considering that Nokia is presently losing its market share, international and domesticated markets have been selected to incorporate into the companys strategy as an effort to increase sales and maintain that statutory level acquired, as a consequence of past performances to date. Nokia has chosen South East Asia, particularly Hanoi in Vietnam to provision boost for the companys conference. Other prime market areas include China, USA, UK, Brazil, Indonesia, Russia, Italy and Spain. Of the listed Countries, China dominates as Nokias most competitive market segment. It is a very complex task to study the future market. This is an excess complications and materializing uncertainties. A few of the key queries posed in numerous publications is as follows: What is Chinas role in the cutting-edge global mobile phones trade? Upon completing this context, one will get to understand how activity Nokia is in the Chinese market. In the first section of the context we will elaborate on the issues of the Macro Environment, Technological environment, Political Environment, Socio-cultural environment and Economic Environment. Section two focuses on circumstances affecting the Micro Environment, Marketing Infrastructure, Competitive Intensity and Customer Characteristics. In the third section of this context we will further discuss factors concerning Company Issues such as Diversification, Organizational Structure, Competitive strategies, Motivations for market entry, Short, Medium and long-lived strategies that are implemented, Modes of market entry, Performance concerning market share penetration, financial, etc and Adaptation vs. Standardization. In our final section, we will discuss matters concerning Marketing Mix Strategies otherwise classified as the The Four P's employed by Nokia its selected foreign environment with comparison and contrast conditioned to its worldwide functionality; this mainly focuses on Standardization vs. Adaptation conclusive of Distribution (channels/locations); Marketing communications (customer/promotion); Pricing (cost/price and Product Management (competition/product). In relations to the overall information acquired, we will basically review and access the conditions of Nokias activities in the Chinese market and assess the situation; we will make recommendations that could better the condition and also introduce a prime Action plan.

The Core Competence

Part of Nokias core competence is the knowledge and experience in the wireless,cellular and network services industry. Nokia has gained several national and international awards by focusing on superior products and services.Introducing new product modifications and technological enhancements is part of the companys product leadership. With a wide range of products, Nokia has applied products independently of technical standard or geographical location. Nokia also participates in several developing new global standards for future telecommunication needs and trends. With its leading position as mobile phone manufacturer and supplier of digital mobile networks, Nokias participation in development of future technologies enables and help them to deliver excellent products for the next decade.The Nokia products are mostly targeting to specific market segments. The Nokia design on portable cellular phones is characterized by the lifestyle of the people, freedom,opportunities of choice, technology and urbanization. The product design both emphasizes the behavior of the consumer and technical industry standards. Nokia was the first mobile phone manufacturer who adopted models for new ways of thinking into their marketing operations. The general management urged marketing managers to think of companies as repositories of skills, rather than the portfolios of products. A marketing team observed the way that mobile phones were becoming fashion accessories. This unusual approach resulted in a superior product design and control of consumer segment. Nokia attached a unique value of trends, lifestyles, freedom, power, and technology among others, into their products.

Market-led and Resource based approaches

Firms should try to adapt themselves to market developments and they should build on the strengths of their resource bases and activity systems. Some people argue that an organisation needs to adapt itself to its environment. Managers should take the environment as the starting point, then they should choose an advantageous market position and then gradually set up the resource base and activity system necessary to apply this choice. On the other hand, some argue that the organisation can adapt the environment to itself. Managers must take the organisations resource base as the starting point and select an environment to fit with its internal strengths. According to the first view, successful companies are externally oriented and market-driven and this view is referred to as outside-in because of its focus on the environment The companies with this view take the environment as the starting point, set on developments in the market-place and adapt themselves to the external opportunities and threats encountered. They make use of the signals from customers and competitors for deciding their game plan. The proponents of this market-driven approach tend to emphasize that an insight into markets and industries is essential. They argue that not only the general structure of markets and industries need to be analyzed, but also specific demands, strengths, positions and intentions of all main forces need to be determined. As to Porters view this approach has spawned five forces, generic strategy and value chain frameworks. Many market-driven advocators suggest firms to initially lead market and industry to change, therefore, they can get the benefit from the altered rules of the game. Smirchich & Stubbart agreed with this opinion, and pointed out that firms can, in part, create their environments through strategic alliances with stakeholders,

investments in leading technologies, advertising and a variety of other activities. Lieberman and Montgomery argued that firms that are market-driven are always the first ones to recognize that new resources or activities need to be developed. So those firms are better positioned can benefit from the first mover advantage. More significantly, Market positioning is vital for the companys success. However, some argued that market positioning is vital, but it must take place within the boundaries set by the resource-driven strategy. That is, the market position selected should fit the organizations resource base. So for being successful, companies must firstly build up a strong internal resource base, and then on the basis of this they can access to unfolding market opportunities in the medium and short term. In essence, this inside-out approach assumes that competitive advantage depends upon the behavior of the organisation, rather than its competitive environment.The proponents of this approach also stressed on the importance of a firms competences over its tangible resources. Strategists have referred to the basis of this strategy as competence based or capabilities based.Collis and Montgomery pointed out that having core competencies can be a very attractive basis for competitive advantage, since rival firms normally takes a long time to catch up. Even if competitors are successful at identifying the competencies and imitating them, the company with an initial leading position can still upgrade its competencies and stay ahead. Therefore, for success, resources should be leading, and market following. In practice, it is found both positioning and resource deployment issues critical for creating a competitive advantage. They argued that competitive advantage stems from the ability to align positional advantages and resource-based elements of strategy. Some other experts further suggest that the two approaches should be viewed as complementary, since organisations need to develop both internal and external focus to develop knowledge-based core competences and market driven strategies sensitive to customer needs.Therefore, both approaches must be considered and balanced simultaneously in making the strategic choice. Nokia was able to achieve a great success in the mobile phone industry because it aligned both the strategies market-driven strategy and resource based strategy during the process of its development. And once it failed to do so, the company immediately suffered the fall, lost market share and decreased sales revenue. But, when the company aligned these two

approaches again, it recovered soon. The article will assess the companys strategy change between these two approaches and the results correspondingly. Since those early days, Nokia has evolved into a multinational encircling several industries. With the collapse of the USSR in 1990, Nokia suffered the high pressure to survive in so many different areas. Based on the new market opportunity the company predicted in mobile phone industry and its internal strengths-advanced technology on mobile phone sector.Nokia finally decided to focus on mobile phone industry. Soon Nokia achieved the success in the mobile phone industry and became the largest mobile phone company in the world. Without the external threats, the new market opportunities and its internal strengths on the mobile phone sector, Nokia may have not entered into the mobile phone industry at all. Therefore, both internal and external factors influenced Nokias strategic choice simultaneously.The big success Nokia quickly achieved in the mobile phone industry justified that the companys choice was right, but this choice was made on the integration of market opportunities and Nokias internal strengths. A successful firm can develop the required potential to adopt or to shape the external environment, such as a new product, technological and market change. Over time, Nokia felt the cardinality of the design in mobile phones. Moreover, they also realised that the phone would not be limited to jst a communicating device role, but would also become fashion symbols. So further the company first broke explored the new ground and launched its fashionable and innovative handset -8210 instead of the previous bulky and brick sized

device, the company transformed the customer needs and led the market change. For Nokia, this strategy not only earned the first mover advantage and increased its market share, but also established a healthy brand name in the mobile phone industry and gained an extensive lead over competitors in this area. Furthermore, based on the different booming innovations from employees, such as text message, Nokias internal antennae design etc, Nokia kept updating its capability and gradually became the market leaders. Obviously, this change required both overall capability to produce the custom products, which is differentiate with the competitors, and an outside-in capability for understanding the evolving requirements of customers and energizing the organization to respond to them. Meanwhile, it also implied that market-led strategy and resource-based strategy have a reciprocal relationship, indeed, they complement

each other. Following these successes, Nokia further solidified its market position based on its strong internal resource; meanwhile, companys ability of sensitive of market trends lead the company to update its competence in a race to stay ahead. In the early 2000s, Nokias strategy changes further justifies the importance of the integration of these two approaches. Nokia just concentrated on launching the high-end mobile phones and the complicated software tending to supply the technologically advanced products and exceed the competitors, while paying less attention to other developments. Actually, at that time, the market was not ready for such devices. Eventually, the slow growth of customers demand for the advanced mobile phone caused Nokia to wait for the market. Thus, the companys distinct competence on technolologically advanced products did not improve its performance and bring the competitive advantage due to its failure to meet the customers needs and its blunt market sense. Since Nokia realised what mistakes it had made, it soon adjusted the strategy. Followed the market trends, Nokia aggressively launched several new models of phones in June 2004 based on its strong resource capability, meanwhile, reduced the price of the phone. The company quickly recaptured its market share and increased revenue. The reason why the company recovered so soon was the ability that the company integrated again its inside-out capabilities and outside-in capabilities that matters.

Market development in the Emerging Markets

Many countries in Eastern Europe are still operating under communistic governments and different reforms, but these governments are now slowly moving towards the western standards. Some of the Eastern European countries are trying to become members of the EU. These countries have a population of almost 100 million people, and the mobile phone penetration in the countries is low. Thus the sales of mobile phones in the South and Latin America have increased rapidly ,but it is estimated that half of the million people have never used a mobile phone. The region is benefiting from an improved governmental stability and a trend towards privatization .The market for mobile phones in Asia is also now increasing rapidly, and the potential sale is enormous due to the number of people living in these areas. The local operators have to develop the infrastructure for mobile phones to ensure the application and sale of mobile phones in the area. The crises in Asia this year has spread to most of the world. It has been reflected in stock markets world wide, and many branches, markets and companies have been through a rough period because of this. The result is that there are many governmental changes in many countries. This lead to a more uncertain political arena on the global mobile manufacturer market. Even though the price is low, the risk for large investments in these countries is considerable.Mobile manufacturers have invested a lot of there time and money in Research & Development and product development. This is their core strengths when facing possible entrants to the industry .There are, at the time, no substitutes to

the mobile phones. The potential sale is sky high, especially in undeveloped countries like China, India, Brazil, Indonesia, and other 3rd world countries with high population rate