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SUMMER TRAINING PROJECT “CONSUMER PREFERENCE” Undertaken at “NOKIA PVT LTD”
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Nokia Analysis of Marketing Strategies With Respect to NOKIA

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Page 1: Nokia Analysis of Marketing Strategies With Respect to NOKIA

SUMMER TRAINING PROJECT

“CONSUMER PREFERENCE”

Undertaken at

“NOKIA PVT LTD”

Page 2: Nokia Analysis of Marketing Strategies With Respect to NOKIA

ACKNOWLEDGMENT

I am grateful to my mentor Mr.Rohit Gupta who has helped me in the completion of this project. He has been a constant guiding force and source of motivation for me. It is entirely because of him that this project has attained its final shape. I would like to thank him for his valuable advice and guidance.

I am also thankful to all the respondents who spared their valuable time for filling up the questionnaires and helped me out with this project.

Finally, I would like to thank officers at NOKIA for there cooperation, which

helped me in completing the project.

VAIBHAV SHAH

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CONTENTS

Executive Summary 6

Chapter 1 : Introduction to the Industry 7

Chapter 2 : Introduction to the company 12

Chapter 3 : Research Objective and Methodology 34

Chapter 4 : Data Analysis 39

Chapter 5 : Recommendations and Conclusion 51

Bibliography 55

Annexure 57

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EXECUTIVE SUMMARY

Research has demonstrated conclusively that it is far more costly to win a new customer

than it is to maintain an existing one. For this purpose it is essential to know the level of

customer satisfaction. The focus of my research was the measurement of customer

satisfaction level for the products provided by Nokia. The research was done for the

corporate clients of Nokia.. Finally the results of the research verify the fact that keeping

the customer satisfied is the best strategies to not only retain the existing customers but

also to expand the business to new horizons.

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CHAPTER 1

INTRODUCTION TO THE

INDUSTRY

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HISTORY OF MOBILES IN INDIA

Mobiles

The technology that gives a person the power to communicate anytime, anywhere - has

spawned an entire industry in mobile communication. Mobile phones have become an

internal part of the growth and efficiency of any business .The most prevalent wireless

standard in the world today, is GSM. The GSM Association (Global System for Mobile

Communications) was instituted in 1987 to promote and enlargen the adoption,

development and development and evolution of the GSM standard .

The GSM Association was formed as a result of a European Community agreement on

the need to adopt common standards suitable for cross border European mobile

communications. Starting off primarily as a European standard, the Group Special

Mobile as it was then called, soon came to represent the Global System for Mobile

Communications as it achieved the status of a world-wide standard. GSM is today, the

world's leading digital standard accounting for 68.5% of the global digital wireless

market.

The Indian Government when considering the introduction of cellular services into the

country, made a landmark decision to introduce the GSM standard, leapfrogging

obsolescent technologies .

Although cellular licenses were made technology neutral in September 2005, all the

private operators are presently offering only GSM based mobile services. The new

licensees for the 4th cellular licenses that were awarded in July 2001 too, have opted for

GSM technology to offer their mobile services.

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INDUSTRY PROFILE

In the early 1990s, the Indian government adopted a new economic policy aimed at

improving India's competitiveness in the global markets and the rapid growth of exports.

Key to achieving these goals was a world-class telecom infrastructure.

In India, the telecom service areas are divided into four metros (New Delhi, Mumbai,

Chennai and Kolkata) and 20 circles, which roughly correspond to the states in India.

The circles are further classified under "A," "B" and "C," with the "A" circle being

the most attractive and "C" being the least attractive. The regulatory body at that time

— the Department of Telecommunications (DOT) — allocated two cellular licenses

for each metro and circle. Thirty-four licenses for GSM900 cellular services were

auctioned to 22 firms in 1995. The first cellular service was provided by, Modi

Telstra in Kolkata in August 1995. For the auction, it was stipulated that no firm can

win in more than one metro, three circles or both. The circles of Jammu and Kashmir

and Andaman and Nicobar had no bidders, while West Bengal and Assam had only

one bidder each.

In 1996, the Telecom Regulatory Authority of India (TRAI) bill was introduced in the

Lok Sabha, and the president officially announced the TRAI ordinance on 25 January

2003. The government decided to set up TRAI to separate regulatory functions from

policy formulation, licensing and telecom operations. Prior to the creation of TRAI,

these functions were the sole responsibility of the DOT.

High license fees and excessive bids for the cellular licenses put tremendous financial

burden on the operators, diverting funds away from network development and

enhancements. As a result, by 2005 many operators failed to pay their license fees

and were in danger of having their licenses withdrawn. In March 2005, a new telecom

policy was put in place (New Telecom Policy 2005). Under this new policy, the old

fixed-licensing regime was to be replaced by a revenue-sharing scheme whereby

between 8-12 percent of cellular revenue were to be paid to the government.

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MOBILE HANDSET INDUSTRY

With rapid consumerism sweeping the country, India has emerged as the second largest

mobile handset market, poised for explosive growth by 2008. Industry observers are of

the view that market within the 2006-07 could well become a global hub for mobile

handset manufacturers. With an eye on the impending growth opportunities, RNCOS's

market research report “India Mobile Handset Market (2005)” analyzes the current

market scenario and the technological developments driving the demand graph.

The report, quoting the experts’ view, estimates that the total market value worth

Rs.8.05billion (US $2billion) as of 2004/05 will surge by 62% with approximately 100-

million subscribers nationwide in 2007. The study further reveals that Indian mobile

subscribers are willing to pay for upgrades, value-based services, and advanced models

that provide better services.

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Dominated largely by Nokia with a total market share of 59%, followed by Samsung

(13%) and Motorola (7%) respectively, Indian mobile handset market is currently

catering to 45 million subscribers (2005). Recent records show that Indian GSM cellular

user base has grown from 43 million, as estimated in May, to 45 million in 2005,

representing a growth of 3.50% in the month under review, witnessing large and

propitious foreign investors flooding the market eyeing for large chunks. In addition,

recent changes imbibed in the government policies that price mobile handsets at a lower

end with flexible custom-duty for new entrants are startling the market with multiple

models largely aimed to higher and middle-income groups.

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CHAPTER 2

INTRODUCTION TO THE

COMPANY

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COMPANY PROFILE

ABOUT NOKIA

Nokia is a world leader in mobile communications, driving the growth and sustainability

of the broader mobility industry. Nokia connects people to each other and the information

that matters to them with easy-to-use and innovative products like mobile phones,

devices and solutions for imaging, games, media and businesses. Nokia provides

equipment, solutions and services for network operators and corporations. Nokia is a

broadly held company with listings on four major exchanges.

HISTORICAL BACKGROUND

At the beginning, Nokia was a manufacturer of paper in 1865. After World war II, the

requirement of industrial products increased substantially. Nokia changed its function to

an industrial enterprise and produced products like chemicals and rubbers. Until 1960’s

Nokia had set electronic department and focussed on developing transmission systems.

The Journey into Tele-communications

Nokia’s Cable Work’s Electronics Department started to conduct research into

semiconductor technology in the 1960’s.Nokia began to develop the digital switch (Nokia

DX 200) which became a success. This was equipped with the high level computer

language and Intel micro processors gradually evolved into the multifaceted platform that

is still the basis for Nokia’s network infrastructure today.

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Focussing on Telecommunications

During the deep recession in Finland at the beginning of the 1990’s, the

telecommunications and mobile phones divisions were the only supporting pillars of the

Nokia. In May 1992,Nokia

made the strategic decision to divest its non- core operations and focus on

telecommunications. The company’s 2100 series phone was an incredible success.

Nokia Today

Today, Nokia is a world leader in digital technologies, including mobile phones,

telecommunications networks, wireless data solutions and multimedia terminals .Backed

by its experience, innovation, user friendliness and secure solutions, the company has

become the leading supplier of mobile phones ,fixed broadbands and IP networks. By

adding mobility to the internet, Nokia creates new opportunities for companies and

further enriches the daily lives of people.

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GROWTH

Nokia continued its recovery by taking 31.9 per cent of the market, up from 29.6 per

cent a year ago. Motorola consolidated its strong second place, grabbing 17.9 per cent

share, up from 15.7 per cent a year ago. The leading two sold 60.7m and 34m

handsets respectively.

The gains came at the expense of third tier manufacturers and Siemens, which saw

real unit shipments fall from 10.8m to 8.89m, a dramatic dip from 6.9 per cent share

to 4.7 per cent share. On these figures, analysts must question the wisdom of BenQ's

acquisition of the German giant's handset division.

Emerging markets in Asia, Eastern Europe and Africa led the way. But interest in

replacing trusted handsets with 3G features wasn't particularly strong, notes Gartner.

Mission Statement, Strategy and Purposes of Nokia

Mission Statement

Customer – To maintain customer confidence by continuing to provide

quality service specifically designed to meet their needs.

Market – To be recognised as a market innovator in the mobile phone

industry to continuing to improve our business practise.

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.

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Training – To develop on going 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 customer.

Marketing Strategy

Nokia’s corporate responsibility strategy is to engage, improve and be accountable.

They constantly measure and review their performance in economic, environmental and

social issues. They engage in stakeholder dialogue and form partnerships that serve the

areas they want to improve upon. They pursue focused and practical improvement

programs in relevant organizational or geographical areas as part of business operations -

this involves business planning, internal communications, training. They increase

accountability to stakeholders through reporting, and informative internal and external

communications activities.

What makes them unique is the way they do it. Based on the same approach that guides

the rest of their activity – ‘The Nokia Way’ - their corporate responsibility is developed

through logical steps, with much of the work concentrated inside the company, much of

the work built on existing programs, and many stages taken forward in parallel.

According to them it is essential to drive corporate responsibility through the

company-wide strategy process, support issue owners in building business cases for

ethical improvement and implementation, and increase accountability to both internal and

external stakeholders.

For them, corporate responsibility is an integral and continuous part of decision-making

in all parts of their business; taking responsibility for the consequence of their actions.

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It’s a belief that by focusing on issues over which they have most influence and which

their stakeholders consider important, they will be able to mobilize more of company

resources, be more proactive, and ensure long-term programs.

The Nokia Strategy continues to focus on three activities to expand mobile

communications in terms of volume and value:

Expand mobile voice

Drive consumer multimedia

Bring extended mobility to enterprises

Expand Mobile Voice

We believe that many opportunities for growth exist in the mobile voice market, and we

intend to continue to focus on this area. In doing so, we aim to capitalize on our

demonstrated efficiency and skill in execution and demand-supply chain management,

and our history of innovation. The markets on which we intend to focus include markets

with low mobile subscription rates relative to the size of the population, geographic areas

where it is more cost-effective to build wireless infrastructure than fixed-line networks,

and heavily populated areas, where factors such as poor housing infrastructure or theft of

materials tilt the scales in favor of wireless solutions. We also intend to focus on markets

where the need for network capacity is growing as a result of mobile network operators

promoting the replacement of fixed networks with wireless.

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Drive Consumer Mobile Multimedia

They intend to enter new product and service niches, which we expect will emerge as

technologies from diverse industries start to converge, especially in the area of consumer

multimedia. Our strategy is to explore, identify and extract revenue from the most

profitable and fastest growing segments of the consumer multimedia business and its

value chain by anticipating consumer needs in this area, and developing innovative

products and services. In the near term, we intend to focus on imaging and games, where

we have already introduced a number of products. Our strategy to drive consumer

multimedia will also involve leverage of our strong position in the consumer voice

market.

Bring Extended Mobility to Enterprise

We intend to capture profitable segments of the corporate market by offering products

and services that will benefit companies and individual business people alike, including a

diverse handset range as well as security and mobile connectivity solutions specifically

tailored for enterprise needs. As we do this, we intend to capitalize on companies' needs

for mobility and seamless mobile connectivity in their operations, and also expect to

collaborate with leading technology and systems integration partners.

Business Objective

Nokia’s business objective is to strengthen their position as a leading systems and

products provider. Their strategic intent, as the trusted brand, is to create personalized

communication technology that enables people to shape their own mobile world.

Nokia innovates technology to allow people to access Internet applications, devices and

services instantly, irrespective of time and place. Achieving interoperability of network

environments, terminals and mobile services is a key part of their objective.

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They intend to capitalize on their leadership role by continuing to target and enter

segments of the communications market that they believe will experience rapid growth or

grow faster than the industry as a whole.

By expanding into these segments during the initial stages of their development, Nokia

has been established as one of the world's leading players in wireless communications

and significantly influenced the way in which voice and other services have been

transferred to a wireless, mobile environment.

As demand for wireless access to an increasing range of services accelerates, they plan to

lead the development and commercialisation of the higher capacity networks and systems

required to make wireless content more accessible and rewarding to the end user. In the

process, they plan to offer their customers unprecedented choice, speed and value.

In addition, they will continue to be active in IP convergence. Nokia has established

alliances with other service providers in order to make mobile access to services easier

for the end user.

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

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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/supply network management, to

bring new product concepts and associated services to market.

Driving Open Mobile Architecture—Nokia’s 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. It’s 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. As a result, the network systems, equipment and wireless

terminals are produced and sold throughout the world. They, therefore benefit

from strong economies of scale throughout the organization. Nokia’s strategy is to

continue focused pursuit of global business opportunities by cultivating a strong

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local presence in all growing markets and pursuing partnering and acquisition

opportunities in order to obtain complementary technologies and market

positions.

At Nokia, one of the top priorities is to continue to strengthen their leading market

position in a profitable way. They believe that further market share gains are key to

expanding the customer base and developing the future business potential. Their leading

position also enhances the positive effects of their economies of scale, which they believe

should strengthen their competitive position in the next generation of mobile

communications.

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MAJOR BRANDS THAT ARE DEALT BY DEALERS

Most of the executives who were surveyed had almost all the Brands of Mobile Handsets

with them and the final analysis upon which I arrived at was that Nokia is the No.1

selling Handset in Delhi followed by Samsung, Motorola and Sony Ericsson.

Nokia no doubt has carved a niche for itself over the past 4-5 years with its superior

technology and its loyalty towards the Indian customer which certainly makes it the most

superior brand. The biggest advantage that has worked in Nokia’s favor is its marketing

strategy, which focuses more on their state of the art Handsets. They were the first

company to come with a mobile with an in-built camera in it and they surely knew how

to sell their product. Today almost all mobile companies have followed suit and come out

with their own in-built camera mobiles.

Nokia is certainly a value for money mobile as more than 90% of the dealers interviewed

agreed on this statement, not only is the after sale service excellent but also the quality

and pricing of products is excellent. In such a scenario not only the existing companies

but also the new entrants such as MOTOROLA, BenQ, Alcatel etc will have to justify

their launch in the long run.

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NOKIA CORPORATE RESPONSIBILITY

TOWARDS ENVIRONMENT

What's in a phone?

The use of chemicals in Nokia products and processes shall be safe to humans and the

environment. Meeting health and environmental regulatory requirements is a priority and

a basic requirement.

Nokia's approach is based on the precautionary principle. Where we have reasonable

grounds for concern over the possibility of severe or irreversible damage to health or the

environment, we believe that lack of full scientific certainty should not be an obstacle to

triggering actions to gather and assess additional data. That may lead us to voluntarily

take steps, e.g. to substitute substances of concern with safer alternatives, where feasible

alternatives are available.

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TOWARDS SOCIETY

Targeting life skills

As a global company, we recognize that young people everywhere can benefit from

developing essential "life skills" that help them to succeed within today’s fast-changing

world. Such skills – including confidence, teamwork, and conflict management – are

often not taught in schools. To meet this challenge, we support life skills education

programs that address the specific needs of young people within individual countries

Examples include:

Conéctate – provides Colombian youth with training in information technology and at the

same time develops their self-esteem, creative and critical thinking, and communication

skills.

Kapcsolodj be – supports the efforts of young community volunteers in Hungary, while

equipping them with project management and budget planning skills.

Leadership for health – develops leadership and life skills among Nigerian youth, who

are trained to run HIV/AIDS-focused initiatives.

Mudando a Historía - trains Brazilian youth to serve as reading mentors to disadvantaged

children.

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STRATEGIC MANAGEMENT

This report outlines the mission statement, strategy and purposes of Nokia .It analyses the

impact of the external and internal influences on the business strategies of Nokia. It also

emphasises the strengths, weaknesses, opportunities and threats in context of Nokia’s

operating and marketing activities.

Nokia has established its leadership in the mobile phone market owing to its successful

marketing strategies and internal management. Nokia’s philosophy is to learn

continuously, to satisfy customers and to respect individual and pursue professionalism.

SECRETS TO NOKIA’S STRATEGIC SUCCESS

One can analyze the secrets behind how an enigmatic Finnish Company got an edge over

the US and Asian giants to triumph as the global leader in mobile communications.

Bold Strategic Intent – While others debate and agonize over first –mover strategies,

Nokia rushes for new opportunities and products. Growing up as a small Finnish

Company with few resources and no incumbent privileges, Nokia is accustomed to

moving swiftly and decisively to claim its share of worldwide markets- from

infrastructure to handsets and software applications.

Innovation through Value Chain – Through technology, innovation and

segmentation, branding and design, Nokia makes innovation a top priority. Like

Proctor & Gamble, it has shrewdly filled the shelves with innovative new products to

dominate categories. Like Sony, it has used its umbrella brand to sell new products

and services and to create footholds in new markets. Unlike its direct rivals

(Motorola, Ericsson), Nokia’s innovation extends from technology innovation to

marketing activities.

Flat Organization – Prior to its worldwide expansion, Nokia extended the use of IT

throughout the company. As it became a process organization, it has shunned

hierarchies and bureaucracy. Even the senior executives have been rotated from one

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work task to another. The organization chart looks hierarchic but teams and

networking reigns.

Entrepreneurial Spirit – Like the best Silicon startups, Nokia encourages

entrepreneurialism throughout the ranks and views failure as a learning experience.

Incentives, rewards and lifelong learning permeate the entire company. Humility is

taken seriously at Nokia as in the technology sector, the arrogant of today are

considered losers of tomorrow.

Collective leadership – Nokia relies on its executive board, with each member

bringing something unique

Global R & D Networks – Nokia’s R&D efforts reflect extensive collaboration with

vital research institutions worldwide. The company invests less in technology

development than its rivals, but often exploits new knowledge more efficiently.

Through technology coalitions it has managed to internalize new know-how while

neutralizing competitive threats.

Competition and Co-operation – By managing its corporate and government

relations with diplomacy and consideration, Nokia has been able to avoid high profile

and costly anti-trust actions and competition policy struggles. Instead of trying to buy

or crush potential rivals, Nokia works to cooperate with suppliers, partners, clients,

even direct competitors.

Customer Focus – The most enduring factor is Nokia’s ability and willingness to

listen to the customer –a fact apparent in its strategy, structure and resource allocation

and also in its products and services. SWOT ANALYSIS OF NOKIA’S STRATEGY

There are various tools which can be employed to understand the effectiveness of

a company’s strategies. SWOT Analysis outlines the Strengths, Weaknesses,

Opportunities and Threats facing the operating strategy of a company.

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Analysing the effectiveness of strategies, strength and weaknesses can be defined as

internal to an organisation. 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. ie. 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 unfavourable trend or development

that may lead into absence of defensive marketing action and thus diminish sales and

profit.

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S.W.O.T. ANALYSIS

STRENGTHS

GLOBAL PRODUCTS AND IMAGE – Nokia is a global company. It not only

sells its products to 130 countries but also sets up research and development

departments in fifteen countries to produce its products in different culture and

language needs,e.g English, Dutch, German and Chinese.

HIGH QUALITY PRODUCTS – Nokia concerns about product quality which is

the most important factor to satisfy customer’s 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(more than 10 models) compared to its competitors Samsung, Ericksson,

Motorola etc.

PRODUCT WARRANTEE WORLDWIDE – No matter where Nokia’s customers

are, if they got a problem with their mobile phones, they can approach any of the

Nokia’s centres. Thus, ensuring a good customer service.

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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 colour

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 didn’t want to

switch.

OPPORTUNITIES

JOINT VENTURE IN TECHNOLOGY – Nokia has joined with Hewlett

Packard(HP) 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

(TQM) 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 (R&D) 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

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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 Carphone warehouse, have spread across London in every street. And,

of course, every store have 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. Likewise, in

opportunity aspect, Nokia has an opportunity to convince the prospects of buying

Nokia in the plenty of stores around the town. However the key to success of Nokia

will be the flexible changing capabilities.

THREATS

THREATS IN PC MARKETS - Due to fierce competition in mobile phone market

it has caused new technology compatible with PC computer. Sony Ericksson

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.

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Keeping in mind the weaknesses and threats, Dan Steinbock in an article called the

‘Nokia revolution’ outlines the secrets behind the success of Nokia.

Apart from the SWOT analysis, the effectiveness of Nokia’s strategies can also be

analysed looking at the environment in which it operates.

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PEST ANALYSIS

Nokia, is an international organisation which requires to focus on macro environmental

factors. Macro Environmental factors comprise Political, Economical, Society and

Technology, viz., PEST Analysis. In view of the different culture and different external

factors between different countries, Nokia has to adjust its strategic plan in order to

develop international market.

POLITICAL FACTORS

It is important of a company to acquire certain kind of policies from its government, such

as the economic policy, and science and technology policy. Finnish policies assist Nokia

to advance its products.

The Finnish policies are the most important factors behind Nokia’s success. To operate

efficiently, a modern knowledge- and technology-based economy that is highly

specialized, internationalized and undergoing rapid structural change requires active

support from the public sector. In its widest sense industrial policy and science and

technology (S&T) policy comprise all those measures by which the public sector shapes

the operating environment for business and thus fosters public welfare. Both policies

pursued by Finnish government and the Parliament are crucial for the development of

both, the Finnish Economy and of national information society.  

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 and improvement in employment. As the result of this, not only Finnish

Government but also international companies, such as Nokia, have to play very important

roles to develop their information society and national technology strength.

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ECONOMIC FACTORS

According to the fact that Russian Federation was collapsed in early 1990s and it clashed

with Finnish economics. Nokia also faced problems, and changed its functions from

single market and overall products to global market and focusing mobile phone market.

During the first half of the year 2001, Nokia continued to perform strongly in the global

mobile communications market and was able to strengthen its leading market position.

However, the general economic slowdown in the US has recently shown signs of

extending to other regions and to the wireless telecommunications industry as a whole.

The slowdown could be a result of a general market deterioration - driven by economic

uncertainty, the ongoing technology transition and less aggressive marketing by the

operators.'

In a press release on June 12, 2001 it was quoted that ‘Nokia saw slower market growth

affecting second quarter results and was to take up actions to expand leadership

while maintaining strong profitability’.

Nokia will continue to take determined actions in all areas of the business to align its

operations with the changing market conditions. Previously announced moves to increase

the company’s efficiency and competitiveness include operational changes to further

enhance customer focus in Nokia Networks.

While market deterioration has had an inevitable impact on Nokia's sales growth, their

products have remained strong, their market position has strengthened and they have

been able to find further efficiencies through tight control of their own performance.

Nokia has countered changing market conditions by accelerating ongoing programs and

generating efficiencies and cost savings. This, in combination with the current financial

health and proven performance, should enable them to exit the current slowdown in a

stronger position than before.

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SOCIETAL FACTORS

At Nokia, their whole business is based around communication and connecting people.

One of Nokia's aims is to make it as easy as possible for their people to be satisfied

working with them. Thus, it keeps various stakeholders interests in mind.

Nokia develops products and services that encourage communication and learning among

people and societies. They are using their strengths - connecting and communicating - to

help make a difference. It complements the core business and their vision to be involved

with the youth and education issues around the world, preparing young people for their

future.

The goal is to be a good corporate community member wherever they operate, as a

responsible and contributing member of society. Sharing in the belief that prevention is

better than cure, they take part in long-term projects aimed at helping young people to

create a firm foundation for themselves and to find their place in the world.

TECHNOLOGICAL FACTORS

In the 1980s, there was a trend towards microcomputers and Nokia tried to match this

tendency by producing its main products as computers, monitors and TV sets. Due to the

changes in 1990s, Nokia also changed its functions to mobile phone market. .

Sustainable development and environmental protection have various effects on the

operation of the innovation system. Innovation also creates new opportunities for

promoting sustainable development.

Nokia always improve their product line through Research and development process,

beside this Nokia also has multimedia compatible improvement with mobile at the

same time, such as, GPRS and WAP Service.Nokia has numerous technologies which

can satisfy those end-users need, such as, Bluetooth, Symbian, SYNCML, M2M,

Wireless LAN and Java.Nokia employed more than 17,000 people in R&D

department over fourteen countries worldwide. They also provided customers to

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choose the features and service that they personally want and need. It means Nokia

does not develop only their product line, but they also improve their service process

to provide the most appropriate service to those customers efficiently.

MARKET SHARE

Dominated largely by Nokia with a total market share of 59%, followed by Sony

Ericksson (13%) and Motorola (7%) respectively.

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CHAPTER 3

OBJECTIVES OF THE

STUDY AND

METHODOLOGY

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RESEARCH OBJECTIVES

MAIN OBJECTIVE

To find inter firm comparison of the mobile industry, by analyzing Nokia, Sony Ericsson

and Motorola

SCOPE OF STUDY

The methodology adopted for this project is exploratory in nature since there is no

hypothesis that has to be tested. The conclusions have been drawn by exploratory

research work.

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RESEARCH METHODOLOGY

There have been two sources of information collected:

a) Primary Sources

I have met retailers of the Airtel of the company and have been able to get first hand

information regarding the product, its features and the buying patterns of the product.

Their input has been valuable.

b) Secondary Sources

Secondary source has played a vital role to play in this report. A good amount of data has

been collected from various published articles and reports found in magazines and

journals. Another vital source has been the Internet and particularly the companies own

website.

Data Collection

In this project both primary data as well as secondary data are used.

Primary Data

Primary data used in this project is collected through two methods, namely,

QUESTIONNAIRE METHOD and DIRECT PERSONAL INTERVIEW

METHOD. Both these method proved to be great help in getting the required

information.

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Secondary Data

It is not possible to collect first hand information for each & every thing so, secondary

data from various sources like Internet, D.K Neilson’s report on Jan,2007, Information

from television channels like CNBC, Z Business, NDTV Profit etc. and Indian Infoline

website were used.

Statistical & Presentation Tools Used

PRIMARY DATA is:

First classified i.e. grouped qualitatively and quantitatively according to the

situation or the type of the data which was collected.

After classifying is represented in the form of tables i.e. systematically arranged

in columns and rows.

Some of the data is also graphically represented in the form of PIE DIAGRAM.

SECONDARY DATA is represented:

In the form of tables.

By the way of BAR GRAPHS and PIE CHARTS

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Sample size and Areas covered

A customer-based survey was conducted in which 100 people were asked to fill the

questionnaire in which 100 people belong to Delhi.

Because it was not possible to consider each and every person of both cities,

PROBABILITY SAMPLE or RANDOM SAMPLE was taken.

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LIMITATIONS

1. The study is restricted only to Delhi.

2. The population size is very small as compare to population size so.

3. There can be errors in sampling

4. Time constraints were present.

5. People might give their biased option

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CHAPTER 4

DATA ANALYSIS

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Based on survey using questionnaire method and answers taken from a group of 100

individuals of different ages.

All data in percentage.

Q.1 Do you use a mobile phone ?

YES NO

94 6

Figure : 1

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Q.2 Which mobile phone do you use ?

Nokia Sony Ericsson Motorola Others

59 13 7 21

Figure : 2

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Q.3 Which mobile handset company is the best according to you ?

Nokia Sony Ericsson Motorola Others

46 30 16 8

Figure : 3

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Q.4 How much satisfied are you with the products of nokia ?

Dissatisfied Satisfied Very Satisfied

16 52 32

Figure : 4

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Q.5 How would you rate the Promotional strategy of Nokia?

Good Ordinary Terrible

56 36 8

Figure : 5

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Q.6 How would rate Nokia on the basis of being user friendly ?

Good Ordinary Terrible

60 34 6

Figure : 6

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Q.7 How would you rate Nokia on the basis of Performance?

Good Ordinary Terrible

52 36 12

Figure : 7

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Q-8 How would you rate Nokia on the basis of Durability?

Good Ordinary Terrible

50 38 12

Figure : 8

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Technology

Good Ordinary Terrible

56 40 4

Figure : 9

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Looks

Good Ordinary Terrible

60 38 2

Figure : 10

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Q.9 How would you rate nokia on the basis of its pricing policy ?

Good Ordinary Terrible

50 40 10

Figure : 11

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CHAPTER 5

RECOMMENDATIONS

AND CONCLUSION

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RECOMMENDATIONS

Nokia can do an excellent job to make the mobile phone easy to use.

In order to maintain the leader position of mobile phone market, the company

should closely focus on the tendency of marketing development.

It would be good for Nokia to make out specialized products for enterprise

markets. These specialized products’ functions would be to make the connection

more quickly and handily than before. The enterprises could involve big

companies, hospitals, government organizations etc.

Some advantages attached to this approach are:

1. The group market is a long run market. The enterprise wouldn’t change these

products easily and they may require updating after a period of time.

2. This group market may get further marginal profits than the individual market and

the rate of return over cost will be improved as well This is because the

competitors will be less in the group market than the individual market.

Analyzing the current business situation, Nokia needs to :

Differentiate its products capability between the old and new category.

Enhance its products with computer IT compatible, focusing on new technology

users.

Maintain its price reasonable.

Follow, practise and promote its environment policies.

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It is also essential to treat the services and the products as equally important. The

provision of a service can be attractive in itself. Developing a good understanding of how

your products and services will be used and how they will change is important. Operators

may well find themselves positioning R&D as a means to promote the use of bandwidth

and focusing on service creation.

While remaining flexible and alert to change, a company should build on standards. In a

world where services will be delivered across a variety of components, one needs their

component to ‘fit in.’

OTHER RECOMMENDATIONS

1. Nokia has to control market skimming as it negatively attacks the brand

2. Nokia is the market leader and it should try to increase the growth rate as it had

become flatter in 2005.

3. Nokia should be innovative on style and looks frint of the cell phones as it has

recently sprung up in the present in order to attract youth.

4. High end mobile phones from Nokia have a hanging problem they must be tweaked

to perform as desired.

5. The price of Nokia cellphones is high as compared to the grown up twins available

so the buyer is unable to buy the latest available.

6. Nokia should work on a phone for the masses as it has a lot of scope, just like bird

and motorola did.

7. The infrared present on the low end phones of nokia lack compatibility with the non0

nokia phones.

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8. Nokia should work upon their combination of price and features in an instrument.

9. The user interface present in both brands of phones are each of a type and are

acceptable by the users.

CONCLUSION

The findings of the research I found that nokia is the market leader in the mobile phone

industry in india Nokia has storng brand image to influence and create large customer

base. Nokia should Launch new mobile phones that are an optimum balance between

price and features Strengths and opportunities of Nokia suggest that high quality,

advanced technology, worldwide service and continuous new products are the essential

factors for Nokia’s product development.

Nokia concerns on its enterprise culture. In the company the relationship between

individuals is mutual trust, fair and openness. Nokia makes courses to train its employees

regularly which will assist Nokia in achieving its higher goal.

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BIBLIOGRAPHY

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BIBLIOGRAPHY

Websites

http://www.news.bbc.co.uk/1/hi/sci/tech/1723738.stm

http://www.amanet.org/books/catalog/081440636x_history.htm

http://www.nokia.com

http://reinholm.com/strategic%20management.htm

Magazines

Network Magazine

SDA Asia Magazine

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ANNEXURE

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SAMPLE QUESTIONNAIRE

Q.1 Do you use a mobile phone?

Yes No

Q.2 Which mobile phone do you use?

a) Nokia

b) Sony Ericsson

c) Motorola

d) Other

Q.3 Which mobile handset company is the best according to you?

a) Nokia

b) Sony Ericsson

c) Motorola

d) Other

Q.4 How much satisfied are you with the products of Nokia?

a) Dissatisfied

b) Satisfied

c) Very Satisfied

Q.5 How would you rate the marketing policy of Nokia?

a) Good

b) Ordinary

c) Terrible

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Q.6 How would rate Nokia on the basis of being user friendly?

a) Good

b) Ordinary

c) Terrible

Q.7 Rate Nokia on the basis of following:

1) Performance

a) Good

b) Ordinary

c) Terrible

2) Durability

a) Good

b) Ordinary

c) Terrible

3) Technology

a) Good

b) Ordinary

c) Terrible

4) Looks

a) Good

b) Ordinary

c) Terrible

Q.8 Who do you think is Nokia's biggest competitor?

a) Sony Ericsson

b) Motorola

c) Other

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Q.9 How would you rate Nokia on the basis of its pricing policy?

a) Good

b) Ordinary

c) Terrible

Q.10 What are your recommendations for Nokia?

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