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Nokia fall down

  1. 1.  Nokia Corporation is a Finland based multinational company  Headquarter -- Keilaniemi, Espoo, city neighboring Finland's capital Helsinki.  CEO -- Olli-Pekka Kallasvuo  Chairman -- Jorma Ollila.  Founder -- Fredrik Idestam in 1865.  Nokia started as a pulp, rubber and cable manufacturer
  2. 2. Founded as a paper mill in Finland by Fredrik Idestam NOKIA CORPORATION Nordic Mobile Telephone (NMT) launched Telecommunication branch ‘Nokia-Mobira Oy’ formed Mobira Cityman, 1st handheld NMT phone launched Jorma Ollila becomes President and CEO of Nokia 1st GSM handset, Nokia 1011, launched HISTORY
  3. 3. Number of mobile subscribers in INDIA has crossed the 250 million mark. Mobile phone production in India was expected to grow from 51 million units to 110 million units by 2011. • Handset Market Share  Nokia: 49.5%  Sony: 10.1%  Samsung: 12%  Motorola: 9.9%  Others: remaining
  4. 4. MARKETING STRATEGIES NOKIA… Focused on Handset Manufacture only Enhance Product Portfolio Increase Distribution Channels Adjust Preferences for specific markets Customer Satisfaction Focused on Replacement Increase Commitment to Emerging Market Improve Collaboration on Designs Ensure Accountability and Quality Aggressive Pricing
  5. 5. Macro Enviroment of NOKIA POLITICAL FACTOR: ECONOMIC FACTOR: SOCIAL FACTOR: Nokia has been a member of the United Nations Global Compact since 2001 Nokia reported spending $5.4 million on lobbying in the U.S. in 2007 and $2 million on lobbying in 2008. Nokia had to change its functions from single market to global market due to collapse of Russian Federation.
  6. 6. TECHNOLOGICAL FACTOR: LEGAL FACTOR: Patents right on technology ENVIRONMENTAL FACTOR: Environmentally ethical considerations amongst suppliers. Life cycle impact of NOKIA throughout the supply chain Improvement or Changes in technology Macro Enviroment of NOKIA
  7. 7. SEGMENTATION STRATEGY  Geographic: o Nokia immediate geographic target is rural India. o The total targeted population is estimated at 100 million.  Demographic: o Male and female. o Ages 25-50, this is the segment that makes up 80% of the Nokia mobile phone market
  8. 8. CONSUMER BEHAVIOUR Cultural Factors Social Factors Close family relationships Saving-oriented mentality Need for communication Need for low end mobile phones Personal Factors Status symbol Family & friends Age & occupation •Students •Working Professionals •Housewives
  9. 9. POST SALES BEHAVIOUR  Availability of service centers  Online applications and applications stores  Nokia Ovi Suite  Nokia PC Suite  Nokia Beta Labs  Symbian OS  Software upgrades  Resale value
  10. 10. PSYCHOGRAPHIC SEGMENTATION High Involvement Low Involvement Rational Aspirational
  11. 11. MARKETING MIX PRODUCT Classification of products based on: Use need price LIVE CONNECT BUSINESS LIFESTYLE Messaging FM  Ringtones Color Screen  Alarm MP3 Camera Bluetooth GPRS  Push mail services Mobile business solutions  Quick Office  Call conferencing
  12. 12. Nokia 1100 • SEGMENT - Low end basic phone •TARGET GROUP - Lower class (first time users) •POSITIONING - Highly reliable & durable phone for working class India •World’s best selling model- sold 250 million phones Nokia 5800 • SEGMENT - Mid-range multimedia phones •TARGET GROUP - Young Generation from middle & upper-middle class •POSITIONING - device for the music crazy customers. •In 2008, Navigation Edition was released which positioned it as much more than a music phone with maps, navigation features, car charger and car kit Nokia E72 • SEGMENT - Mid-high end Business-cum-Smart phones •TARGET GROUP - Business professionals aged 25 - 50 with upper middle class incomes •POSITIONING – Business phone to serve needs of working professional + good multimedia support Nokia N8 • SEGMENT - High End Smart Multimedia phones •TARGET GROUP - Young Generation from the upper middle class •POSITIONING - device packed with must have features like vibrant GUI, music, connectivity, photography, games etc PRODUCT
  13. 13. PRICE MARKETING MIX Penetration Pricing Price Skimming Low end phones High end phones Price wars leading to lower profits Higher demand for advanced features
  14. 14. MARKETING MIX  Nokia has the largest mobile distribution network of 1,30,000 outlets  Nokia ‘Concept Store’ setup in 9 major cities across India to enhance customer experience  Nokia Priority Dealers setup in all Tier- 1 and Tier- 2 cities  Multi-brand stores like The Mobile Store, Hot Spot, Big C, etc PLACE
  15. 15. MARKETING MIX  Below the line marketing  Brand Ambassador Priyanka Chopra / Shahrukh Khan  Digital marketing through social networking sites, mobile sites, blogs, etc  Extensive TV campaigns and Advertisements in regional languages  Made For India advertisement for Nokia 1100  The Har Jeb Mein Rang Advertisement Campaign  Main sponsor of Kolkota Knight Riders in IPL  Nokia India Fest 2011-Pan India College festival PROMOTION
  16. 16. RURAL MARKET  Nokia Life Tools (Jeevan Sadhan): SMS Mechanism, Sachet Pricing, Daily cost of Rs 1 only  ‘Showrooms on wheels’ and ‘Rural care on the go’  Tie-up with major micro-finance institutions like SKS Microfinance PROMOTION
  17. 17. Public Relations ( PR )… Nokia has strong PR. They keep on doing some or the other new events, programmes and publicity, so as to keep up with the brilliant image of the company and also to enhance the brand equity. • Direct Marketing : • Nokia does not perform Direct Sales activities on its official website www.nokia.com. • Nokia use DEMO style of Direct Marketing. • Nokia does not use Direct Mail or Telemarketing styles of Direct Marketing.
  18. 18. RIVALRY AMONG COMPETITORS  CONCENTRATION AND BALANCE: The major players are Samsung, Micromax, Blackberry, LG, HTC etc  INFORMATIONAL COMPLEXITY: Devices are becoming more complex and getting features that are outside the core competencies of traditional manufacturers  CORPORATE STAKES: High stakes for the companies because of huge investments into the business  REDUCING PROFIT MARGINS due to intense competition & price wars
  20. 20. A BRIEF COMPARISON Nokia vs apple
  21. 21. START UP Apple  June 29,2007  Investment in marketing – less than $1 billion.  No. of employees- 98,000.  Revenue - $182.795. Nokia  1981 , In 2007, n95 was released.  Investment in marketing - $1 billion only in india.  No. of employees – 61,656  Revenue - $13.5
  22. 22. NOKIA MARKET ENTRY Pros  Less market competition. Cons  Less technological advancement.  Less awareness among customers.
  23. 23. APPLE’S MARKET ENTRY. Pros  Respectful brand reputation in existing market.  Advance technology.  Market awareness. Cons  Brand competitors.  User’s preference.  Consumer’s Idea about mobile phones.
  24. 24. HANDSET MARKET SHARE nokia samsung lg motorola sony ericson rim htc apple others 2007 38% 14% 7% 14% 9% 1% 1% 1% 16% 0% 5% 10% 15% 20% 25% 30% 35% 40% 2007 2007
  25. 25. HANDSET MARKET SHARE apple nokia samsung zte lg motorola sony htc rim others 2011 8% 20% 21% 4% 3% 2% 2% 2% 2% 33% 0% 5% 10% 15% 20% 25% 30% 35% 2011 2011
  26. 26. FACTORS FOR RISE AND FALL.  Before iphone, handset like Nokia with record selling was based on fashion and brand rather than technological innovation.  Apple proved phone was not just a communication tool but a way of life.
  27. 27. INNOVATION.  Iphone - June 29,2007  Iphone 3G – July 11,2008  I phone 4S – October 4 ,2011  Iphone 5S – Sept. 12 ,2012  Iphone 5C & 5S – July 22, 2013  Iphone 6 & 6 plus – Sept 9,2014  Mobira series(1982-1990)  Original series(1992-1999)  4-digit series(1994-2010)  Lettered series(2005-present)  3-digit series(2011-present)  Worded series2011-present)
  28. 28. PICTURE VIEW COMPARISON Apple – keeps on changing and advancing. Nokia varied models.
  29. 29. ROLE OF OS ios android windows basic 2014 48% 46% 3% 3% 0% 10% 20% 30% 40% 50% 60% 2014 2014  Advancement.  Awareness .  User-friendly.
  30. 30. REVENUE SECTOR  Q4 of 2008, apple was third largest mobile phone manufacturer by revenue after Nokia & Samsung.  By 2011,apple became mobile handset vendor in the world by revenue surpassing long time leader NOKIA.  Q1 0f 2012, 99% of industry profits taken by apple & Samsung , nokia going on a loss with other companies.
  31. 31. Strengths Weakness Threat Opportunity SWOT
  32. 32. Strong Corporate Brand & the largest cell phone vendor User-friendly features Strong Distribution Network Best Navigation (Nokia OVI Maps) High resale value of hand-sets compared to other handsets Slow to adopt new ways of thinking (for example, launch of dual sim mobiles) High prices compared to other domestic companies Symbian OS lost out the race with Google’s Android and Apple iOS Too many products & very little product distinction No of features offered in the lower end Nokia models are very little and stagnant STRENGHTS WEAKNESS SWOT ANALYSIS
  33. 33. Nokia can expand its market share by introducing a new low cost brand in competition to companies like Micromax, GFive etc Increase their presence in CDMA market They can target the smart phone in the low to medium segment with MS Windows- 7 platform OPPORTUNITIES Threats from emerging domestic companies like Micromax, Karbonn, Maxx, Lava, Spice etc who offer similar features at lower prices In the higher segment it is losing market share to players like Apple, HTC, Blackberry, Samsung, etc THREATS SWOT ANALYSIS
  34. 34. THE TUMBLE DOWN! First hit when competition started. Second hit when Competitors took over
  35. 35. COMPETITION…  While it was not totally unexpected, what caught Nokia off-guard is the rate at which competitors where innovating new technology.  Since the launch of the iPhone/Android phones, Nokia failed to keep up with the industry. While other kept proceeding ahead aggressively by ‘hook or crook’.
  36. 36. MARKET SHARE 76.1 5.9 38.5 25.6 23 41.8 Nokia Samsung Nokia Samsung Nokia Samsung 2010 2011 2012Mar Market share (%)
  37. 37. HOW NOKIA FAILED IN CONNECTING 'TO' PEOPLE  Introduction of Iphone in 2007.  Nokia relied too much on Windows platform which was proved as another costlier step for the brand.  Apple redefined smart phones with touch screen and Blackberry with email. Android proved that software matters more than hardware. Nokia was slow to respond to these trends.  In India, local brands stole the lead on dual SIMs, low-end Qwerty and long-battery-life phones.
  38. 38. ANDROID WEAKENED ROOTS OF NOKIA?  In 2008, brands like Samsung, HTC, and Micromax found roots to extend their market.  Samsung's Android phones are user friendly and budget friendly too.  Google bought a company called Android and announced an Open Handset Alliance, a grouping of industries players who would come together to build an OS for smart phones. But Nokia refused the invitation.  Nokia's entrance into Windows platform is quite late.  Finally Nokia gave up for a 7.1 billion to Microsoft.
  39. 39. MISTAKES THAT LEAD TO NOKIA FAILURE 1. Failure of Symbian OS:  Nokia launched its Symbian 60 series in year 2002 which initially had a good market response.  The introduction of Apple IOS in 2007 and Android in 2008, the OS race was completely taken over by the two giants.  The reasons for collapse of Symbian OS is lack of applications and UI (User Interface).  After facing competition from iOS and Android, Nokia continuously tried to improve their Symbian OS but was not creating something unique.
  40. 40. 2. WRONG DEAL WITH WINDOWS  The company made the biggest mistake to take a leap of faith in Windows in 2011. At that point of time, the company already was in declining condition and trusting Windows which was new in the field to regain its status was the biggest mistake the company made.  All these phones which the company launched were comparable to other competitor devices but OS was the problem which lead to ultimate collapse of company.
  41. 41. 3. NOKIA BECAME LAGGARD IN SMARTPHONE MARKET  COMPLACENCY:  Stiff competition from Samsung and Apple.  Lack on focus on innovation was the second big reason of collapse.  Nokia seemed to be lagging in the race. Where Samsung from nowhere entered the race and focused on innovation as its core competence to gain the market share, Nokia was very late to realize this fact.
  42. 42. COMPETITION…  LACK OF INNOVATION:  If analyzed through the Technology Lens, Nokia primarily failed to innovate attractive technology and features.  For example:  1. Nokia had touchscreen phones, it did not attract customers as much as compared to Apple iPhones.  2. China Mobile- it made exact copies of Nokia  The software being developed were using old development models and newer concepts such as User Experience and User Interface were being neglected.  Nokia was clinging onto Symbian OS for too long. It had reached its peak.
  43. 43. REDRAFTING STRATEGIES  In September 2013, Nokia announces that it has entered into an agreement with Microsoft whereby Microsoft would purchase substantially all Devices & Services, the Nokia business which makes mobile phones and smartphones. • Stephen Elop facilitated this deal and his role in it has been questionable. • Though Nokia is now reporting profits, it had lost its glory in the market it once dominated single-handedly.
  44. 44. WHAT DID STEPHEN ELOP DO WRONG ? Inspecting with the organization and human performance lens. WOULD TECHNOLOGICAL CONVERGENCE LEAD TO TECHNOLOGICAL OBSOLESCENCE? Awareness Stage Consideration Stage Decision Stage
  45. 45. WRONG DECISIONS.  While the entire smartphone OS industry was evolving, manufacturers moved on and adopted various operating systems like Android, Windows, Bada, Meego, et cetera, Nokia decided to stick to Windows OS only.  As Android and iOS became more popular, Nokia and its windows phones failed to attract any attention. • Though the new technologies developed by Nokia were ground breaking, they were not promising enough.
  46. 46. RESULTS  During the 3 years Elop was Nokia CEO, Nokia revenues fell 40%, Nokia profits fell 95%, Nokia market share collapsed in smartphones from 34% to 3.4%  Nokia's credit rating went from AAA to junk, Nokia's share price dropped 60% in value and Nokia's market capitalization lost a minimum of $13 Billion in value. • The Financial Times calculated that Nokia shareholders ended up paying Elop a bonus of 1 million Euros for every 1.5 Billion in market capital that Elop was able to destroy while Nokia CEO
  47. 47. RUMOR MILL  Stephen Elop was working with Microsoft’s Business Division before moving to Nokia.  He was the first non-Finnish CEO of Nokia and it is argued that Stephen was sent with the sole purpose of devaluating Nokia as to make it easier and cheaper for Microsoft to buy it.  Microsoft being a software giant always had ambitions to acquire a hardware sector firm and as Nokia dipped to the bottom, Microsoft announced that it had bought Nokia for $7.2 Billion. • While all this happened, Stephen comes back to Microsoft as VP of Microsoft's Devices & Services business unit and gets a signing bonus of $25 Million
  48. 48. CONCLUSION  From Technology perspective, Nokia did not deliver as per expectations based on previous performance  From the Strategy perspective, though Nokia did eventually come up with nice lucrative products, it lost in the race against time due to poor strategies and sly competition.  From the organizational and people perspective, the new CEO’s attitude and competency proved to be fatal for the company.  The entire Rubik of Organization , people and strategy failed to deliver for Nokia.
  49. 49. Questions are welcomed.