Internal and external market analysis of

Nokia
Every organization occasionally has to take some momentous decisions that
affect the entire destiny of the organization for years into the future. These
decisions are considered to concentrate on the major and most significant issues
f acing an organization. In 1994, Henry Mintzberg, an iconoclastic professor of
management at McGill University, took the entire strategic planning
establishment to task in his book, The Rise and Fall of Strategic Planning. In
effect, Mintzberg declared strategy did indeed have several meanings, all of
which were useful. He indicated that strategy is a plan, a pattern, a position, a
perspective and, in a footnote, he indicated that it can also be a ploy, a
maneuver intended to outwit a competitor
Strategic planning is a defined, recognizable set of activities. Techniques vary
with the particular author but the substantive issues are essentially the same
across authors.

Background History of Nokia:

Nokia, a company that takes its name from a small river outside the Finnish city
of Tampere, began life in 1865 as a wood pulp and paper producer. Over its
history, it has manufactured rubber boots, tyres, television sets and generated
electricity, Nokia found its way into telecommunications in the early 1960s. Since
then, in a mere 40 years, Nokia has developed and refined it telecommunication
focus, and by connecting on mobile communications it has become a global
technology leader and the worlds fifth most valuable brand.
TASK 1

1.1 Importance of External factor of Nokia.

There are certain external f actors that Nokia should be very aware of , such as
P.E.S.T.L.E factor and also S.W.O.T. A business must take into account all these
constraints f or strategic planning.

PEST Analysis:
Political factors:
Political factor is very important f or Nokia. Because Nokia sales their product
globally. If government changes their laws in terms of export import the sales will
be affected. Any political harassment or political partys threat can be affected
market of Nokia. Political riot is a giant problem f or any company and Nokia as
well. For example in Egypt and Libya there are ongoing a political riot and in this
situation Nokia company decreased their market. The governmental bodies in
the U.K have introduced new laws into the business environment, which ensure
that none of these procedures take place; if a company is to be successful they
must follow all of these laws.

Economical f actor: Economical f actor is a very important f or a company.

Nokias market all around the word. In this economic rescission all over the world
Nokias Market decreased in a wide range. Especially in Europe and U.S.A Nokia
loosed their market. There are other things as well such as labour share to value
added where Nokia consolidated rate is 39.8% and high rate of export duty.
Environmental and Social f actors: Some un-ethical practices are against the law
and companies cannot become involved in them but there are also some
practices that aren't illegal by law but are considered highly un-ethical by the
consuming public, companies who engage in these practices can lose a lot of
market share. In this recent year Nokia loosed their market in Asia because China
and India producing their own Nokia hand set which is cheaper on the other hand
there are lot of local hand set captured their own market. So now Socio and
environment f actor is a challenge f or Nokia as Asia is a giant market f or Nokia.
Technological: In the communications market technology is perhaps the most
important f actor that companies like Nokia have to take into consideration. They
have to keep up to date with all the newest technological advances (like express
music, Smooth touch screen, unexpected memory and camera and motion
capture phones) if they are going to capture the biggest market share and stay
ahead of their competitors (Apple and HTC).
Legal: Legal constraints must be taken into account because many businesses
aim to make a profit so they may be tempted to mislead their customers about
prices, quality of products and the availability of their products. They may also
try to cut expenditure by using lesser quality materials in their products all of
these are illegal. So legal f actors are very important f or Nokia. As Nokia is
running their business globally so it is very important f actor to aware about
global legal issue.

1.2 Stakeholder needs and Expectation of Nokia:

Stakeholders are those groups and people who are interest of business and
organisational activities. Nokia is one of the largest companies so its
stakeholders are major part of Nokia Corporation.
There is chart of Nokias stakeholders and their needs and expectation which is
described below:

Organization
Internal Stakeholders
External Stakeholders
Shareholder
Employee
Suppliers
Customers

Government
Local Community
Media
Business
Community
Bank and Insurance

Stakeholders needs and Expectations:

Internal Stakeholders
Shareholder: Nokia always try to do better f or them. Shareholders arrange the
major part of capital for organization development as they part of owner of an
organization. Shareholders receive share of profit, bonus, and dividend as well as
reward. Its company policy to give them bonus share, dividend, premium share
as they are f eel secured to invest money more.
Employee: Nokia regularly involve employees in discussions about issues such as
corporate values, career and competence development, performance, diversity
and work-life balance thats meet employees need and expectations.
Suppliers: Suppliers are very effective role f or an organization. Nokia understand
the important of them and try to meet their needs and expectation such as early
payment, advanced payment, competitive value, communication regularity,
preference of product etc.

External Stakeholders
Customers: Nokia increasingly engage with customers on issues related to
sustainability. Network operators Nokias biggest customers expect to meet
high standards of corporate responsibility in their own operations and
increasingly in their supply chain. Nokia continues to receive enquiries and
assessment requests about social and environmental performance from their
operator customers. Nokia respond to those requests through our normal
customer account management interface.
Government: Nokia is operating their business in world wide. Nokia always obey
the government rules and regulation and pay tax vat as per government rules.
Nokia create a giant employment all over the world and it is a government basic
expectation from a company.
Local Community: Nokia is always promised to help all kind of local community
all around the world. Nokia sponsored f or AIDS hospital, cancer hospital, all
kinds of national game. Nokia sponsors many research collaborations with
industrial and academic partners. Nokias goal is to strengthen co-operation
between our researchers and academics.

Business Community:

Nokia works in collaboration with other companies on key issues through a

number of industry organisations, such as: The Global eSustainability Initiative
(GeSI): We participate in the Supply Chain Working Group, e-Waste Working
Group and Climate Change Working Group. International Chamber of Commerce
(ICC) World Business Council f or Sustainable Development (WBCSD)
Bank and Insurance Company: Nokia always meet the expectations of bank and
insurance company. They are taking loan from bank and investing money f or
other issue as well and paying interest.
Media: Nokia plying a vital role f or increasing the media such as TV, newspaper,
magazine and any other media. Nokia pays high rate of amount f or promotion
their product f or advertisement with those media.

1.3 Major change in External Environment of Nokia:

Economical environment: In recent year there is ongoing a economic recession
all over the world where is suffering world leading Mobile phone company Nokia.
which released their results f or the first second quarter of 2009 on Thursday,
where they revealed losses in income and drop in volumes shipped, expect the
setback to continue in the current quarter. Nokia continues to expect 2009
industry mobile device volumes to decline approximately 10 percent from 2008
levels. Nokia now expects its market share in mobile devices to be approximately
flat in 2009, compared with 2008. This is an update to Nokias earlier target to
increase its market share in mobile devices in 2009, the company says in a
statement.

2.1 Using appropriate tools to analyse the effect of

current business plan of Nokia.
SWOT ANALYSIS:
SWOT analysis is the way of deciding on a successful marketing scheme, we
must look at strength, weakness, opportunity and threat.
Strength (internal factors): Nokia is going to be one of the most popular Mobile
communications companies in the industry all over the England, Nokia provide
high quality of product with average price. And this company have very skillful
technologist also have strong board of marketing management.
Weakness (internal f actors): This is basically looking at where the product is f
ailing or not doing as well as it should in the market. Nokia's problems are that:
1. They are currently aiming their products at a saturated market segment.
2. Their wage costs are currently rising.
3. Higher import charges have now been put into place.
4. There are some quite high supply chain costs that Nokia are currently paying.

Opportunity (external f actors): This is the area in which Nokia can make more
profit, or gain more market share. There are 2 ways in which Nokia can currently
do this:
1. Improve the technology that they are using to make their phones and use in
their products, for example, camera phones and advanced picture messaging,
3G supporting and very smooth touch screen.
2. Using innovation to re-invent their products, change and develop within the
market to offer something none of the competitors have.
Threat (external factors):
China Mobile made copy Nokia sets. Orange, Voda-phone, and O2 are globally
selling their own brand products. Higher import charges.

2.2 Analysing the current Market position of Nokia:

Now the Nokia Corporation deals in 4 markets, Mobile Phones, Multimedia,
Enterprise solution and Networks, the Mobile phone market being the most
profitable and dominating among the rest. Currently, Nokia enjoys about 36% of
the Mobile phone market, more than twice its immediate competitors Samsung
and Motorola.

(Current Market Position of Nokia)

Although there have been reports of its competitors growing market shares,
Nokia continues to stay close around the 35 % mark. It shows that the
competitors are munching on the market share of the small players in the
Industry.

2.3
Evaluation
the
weaknesses of Nokia:

competitive

strengths

and

Strengths: It basically shows that Nokia upgrading and innovating performance is

better than the other competitors. They are taking places very successfully in
competitive market. These are given below:
They are taking lower time to innovate a product where as others Nokias core
competitors (like I-phone, Blackberry) taking huge time to innovate a new
product.
Nokia products easy to use or flexible thats why different ages of people very
comfortable of their products.
Nokia provides the same level of technology of their products like their core
competitor (i-phone or blackberry) but Nokia provides lower cost.
Nokias accessories is available their local market.
Weakness:

1. They are currently promoting their products to a market that is verging on

saturation- Nokia need to relaunch some of the older models to a different
market and only promote new products to the existing market segment.
2. Their costs are already high, and are always rising- To solve this they can try
and invent or discover machines that can increase productivity so that the
number of staff currently employed (The average number of employees in 2002
was 52714 and this was a decrease from 57716 in 2001).
3. High import charges are being implemented by the government- To counter
this Nokia need to set up factories in more companies.

3.1 Developing strategic options for Nokia:

Ansoff's matrix:
Market penetration (existing markets, existing products): Market penetration is
the least risky way for a company to grow. The aim of market penetration is to
sell existing products to an existing market, to do this Nokia must do a few
things:
1. The pricing scheme should be reasonable (f or example, penetration or
competitor based)
2. Introduce discounting offer
3. Start up a different advertising campaign or consider changing an existing
one.
4. Improve better quality of consumer services.
Market development (existing markets, new products): new product development
can be a crucial business development strategy for firms to stay competitive.
To complete market development successf ully, Nokia must look into the f
ollowing:
1. Researching and selling to a different market (in case of saturation or poor
market share)
Change times that television advertise are aired at and alter the places in which
print adverts and leaf letting are being displayed (this can help your products
appeal to a whole new market segmentation).
2. Lower current prices to help the products appeal to a wider range of
consumers.

Product development (new markets, existing products):

An established product in the marketplace can be tweaked or targeted to a
different customer segment, as a strategy to earn more revenue f or the firm. For
example, WAP phones are aimed at more professional people while Camera
phones are aimed at the youth market.

Diversification (new markets, new products):

This refers to developing technology that offers consumers something new or
different, this is the most common way of companies trying to gain greater
market share and increase their prof its.

A comparative understanding of activity

from Nokia in the market:
Porters generic strategy of Nokia:
Cost leadership: Cost leadership means that the firms produces its goods and
services at relatively low cost by taking advantage of economies of scale and the
experience curve effect. In order to use this strategy the firm has to reduce costs
at each stage of the business.
Differentiation: Differentiation means differentiating a product on the basis of
superior performance in an important consumer benefit area. Nokia can
differentiate its product in the following ways:
i. Superior product performance by adding features, improving reliability,
durability, quality etc.
ii. Superiority of product perception achieved by marketing communication,
iii. Distributing the product effectively, making the product more conveniently
available than the competitors
iv. Providing high service levels, better sales support and more affordable
financing.

Focus Strategy:
Nokia that use Focus strategies concentrate on particular niche markets and, by
understanding the dynamics of that market and the unique needs of customers
within it, develop uniquely low cost or well specified products f or the market.
Nokia basically maintains the cost leadership strategy in their competitive broad
market because Nokia reduces costs at each stage of their business.

Future Organizational strategy of Nokia:

Nokia planning to take new organizational strategy based on their current market
strategy, these are shown is given below:
The CTO Off ice will be responsible f or Nokia's technology strategy and forwardlooking technology activities, including Nokia Research Center. It will be headed
by Rich Green. Design, responsible f or Nokia product and user experience
design, will be led by Marko Ahtisaari.
The CFO Of f ice, responsible f or all financial activity, will be headed by Timo
Ihamuotila.
Corporate Development, responsible f or driving implementation of Nokia's
ecosystem strategy and strategic partnerships, will be headed by Kai Oistamo.
Corporate Relations & Responsibility, responsible f or Nokia's government and
public af f airs, sustainable development and social responsibility, will be led by
Esko Aho. Human Resources will be led by Juha Akras.

Stakeholders Analysis of Nokia Ltd:

These are the owners of a business and most of them are concern about the
companys ethical
Performances as such the can increase their investment:

Stakeholder
Main Interest
Power
Potential
Impact
Strategies/Control Measure
Bankers
Suppliers
Government
Consumers
Bankers and other financial institutions are interested in the overall condition of
a firm. Suppliers will expect to be paid and will be interested in the future of the
business. Tax revenue, Compliance with legal regulations and Continuous
national development Consumers have high interest in the goods and services
and reasonable prices. A bank is interested in minimising the risk of interest not
being paid. Suppliers can reduce their level of service, or even switch to
supplying competitors. Government has legal power To control business.
Consumers have more option to bargaining power. Collateral security is being
strongly. Imposing new products with competitive price and reduces consumers
rivalry. Flexible rules and regulation f or business. Suppliers can analyze through
the competitors of existing market. Nokia never disrupts any bank money. Nokia
try to give them good feedback and a competitive value. Obeying all rules and
regulations. Nokia always bringing hi- technology in a competitive price.

Criteria for reviewing potential options for strategy plan

of Nokia:
Share Market Strategy:
Nokia regards it as its main scholar mobile phone devices to adopt Windows
Phone, carries on the modernism of various fields on this stage. It and Microsoft
will carry on close support in development and market will go about, and share
the street chart of product development, in order to move forwards the evolution
of the movement products in the future together.

Stakeholder Engagement Strategy:

Regular communication with respect to our sustainability efforts, both internally
and externally, Nokia builds trust and helps develop of their reputation. Nokia
understand how important it is to communicate clearly and correctly to the
outside world the ways in which our business affects society.

Decision Making Strategy:

Nokia outlined its new strategic direction, including changes in leadership and
operational structure to accelerate the company's speed of execution in a
dynamic competitive environment. Major elements of the new strategy include:
- Plans f or a broad strategic partnership with Microsoft to build a new global
mobile ecosystem; Windows Phone would serve as Nokia's primary smart phone
platform.
- A renewed approach to capture volume and value growth to connect "the next
billion" to the Internet in developing growth markets.
- Focused investments in next-generation disruptive technologies.

Risk Assessment:
Nokias overall risk management concept is based on visibility of the key risks
preventing it from reaching our business objectives. This covers all risk areas:
strategic, operational, and financial and hazard risks. Political, social, human
rights and environmental risks are considered within these categories of risk,
rather than as a separate strand. The principles set out in Nokia Risk Policy and
accepted by the Boards Audit Committee, require risk management and its
elements to be integrated into business processes.

Strategy plan of Nokia includes Resources implications:

Strategy has been defined as the match an organization makes between its
internal resources and skills and the opportunities and risks created by its
external environment. Nokias strategy plan in connections of their external and
internal environment which is described below:

Network Solution:
Nokia is introducing core network solutions that leverage the possibilities of IP to
expand operators service portfolios, while keeping full control over their network
usage.

Reduction of cost:
According to Nokia Siemens Networks the cost reductions should rise to EUR 500
million by the end of 2011. The company plans to review its global personnel,
and expects f or around 7-9 percent of its current number of around 64,000
employees to receive the pink slip, yet the number of layoff s will differ from a
country to another.

Usages of Human Resources:

There is a system of Nokia to ensure the availability of workforce f or current and
future business needs, in
a sustainable and ethical manner, at both organizational and unit level.

Nokias Resource Implications Imagination:

Resources
2012
Jan- Jun
July- Dec
Jan- Jun
July- Dec

Market Research
Outlet
Face to Face
Telephonic
Online survey

Advertisement
TV
Newspaper
Billboard
Internet

Plan Development
Advance version mobile phone
Connected with Microsof t
Using I Tune
Flexible Application download

Price
Reducing production cost
Reduction
Export duty
Call charge low
Reduction of Accessories
Total

Product:
Nokia developing products and services which not only meet customers
immediate usability needs but help them to make more sustainable choices
through the innovative use of materials, technologies and concepts.

Technology:
The mobile phone in your hand is now packed with advanced tools that let you
do so much more. A picture, music, Internet, games, radio, video, and
navigation, messaging todays Nokia phones are overf lowing with practical
ways to help you make the most of every day. Nokia gives you insights into the
technologies that make your Nokia phone alive. From 3G to WLAN, the acronyms
and terminologies are explained in detail.

Mission:
Nokia helps communications service providers build more valuable customers
relationship by providing ef f iciency and experiences. Nokia built value by
addressing ef f iciency, and continue to do that. But they also need to address
the customers need f or a better experience, because its experience that builds
relationships, and relationships that build value.

Vision:
The individual communications experience is the greatest value a
communications service provider can deliver to their customer, and so its the
greatest value we can support communications service providers in delivering.
Nokias vision guides their mission, and mission is to build more valuable
customer relationships. The individual communications experience builds more
valuable customer relationships.

Future Management Objectives of Nokia:

Nokia planning to launch an advertising service Point Find service, next year
that will use pattern recognition technology to let people point camera phones at
cars, movie posters, and other objects.
Nokia going to provides the rates of i-Phone service plans. The plans are
organized in three main categories individual, f amily and existing customers.
Nokia plans to accelerate your mobile application development. Recently,
Nokia announced its new Launch pad mobile sof tware developer of f ering f or
the broad range of sof tware developer companies seeking a f ast-track f or
creating applications that target the millions of devices based on Nokia mobile
platf orms in the market.

Measures for evaluating a strategy plan of Nokia:

BCG MATRIX:
This is simplistic in many ways and the matrix has some understandable
limitations that will be considered later. Each cell has its own name as f ollows.

Dogs:
These are products with a low share of a low growth market. These are the
canine version of 'real turkeys! They do not generate cash f or the company,
they tend to absorb it. Get rid of these products.

Cash Cows:
These are products with a high share of a slow growth market. Cash Cows
generate more than is invested in them. So keep them in your portf olio of
products f or the time being.

Stars:
These are products that are in high growth markets with a relatively high share of
that market. Stars tend to generate high amounts of income. Keep and build your
stars. Look f or some kind of balance within your portf olio. Try not to have any
Dogs. Cash Cows, Problem Children and Stars need to be kept in a kind of
equilibrium. The f unds generated by Nokia Cash Cows are used to turn problem
children into Stars, which may eventually become Cash Cows. Some of the
Problem Children will become Dogs, and this means that you will need a larger
contribution f rom the successf ul products to compensate f or the f ailures.
Question marks: (also known as problem child) are growing rapidly and thus
consumes large amounts of cash, but because they have low market shares they
do not generate much cash. The result is large net cash consumption. A question

mark has the potential to gain market share and become a star, and eventually a
cash cow when the market growth slows. If the question mark does not succeed
in becoming the market leader, then af ter perhaps years of cash consumption it
will degenerate into a dog when the market growth declines.

Implementation a strategy plan for Nokia:

Resources
2011
2012
Jan- Jun
July- Dec
Jan- Jun
July- Dec

Market Research
Outlet
Face to Face
Telephonic
Online survey

Advertisement
TV
Newspaper
Billboard
Internet

Plan Development
Advance version mobile phone
Connected with Microsof t
Using I Tune
Flexible Application download
Reducing production cost
Labour Cost
Export duty
Call charges
Accessories
Total

Processes to gain commitment from stakeholders of

Nokia:
Stakeholders are the major part of an organization, Nokia always tries to
negotiate with their customer,suppliers and shareholders. Its company policy to
give shareholders bonus share, dividend, premium share as they are f eel
secured to invest money. Nokia always try to give its suppliers advance payment,
competitive price. Nokia regularly involve employees in discussions about issues
such as corporate values, career and competence development, perf ormance,
diversity and work-lif e balance thats meet employees need and expectations.

Monitoring
and
evaluate
systems
implementation of Nokia strategy plan:

for

the

Balance Scorecard for Nokia:

In Balance scorecard there are f our kinds of perspective should be think by top
managers.
1. Customer Perspective: Managers of Nokia should make goals, quality, perf
ormance and service, and cost, af ter which translate the goals into specif ic
actions that measure these four categories that tend to be the biggest concern
of customers.
2. Internal Business Perspective: Managers should identif y the companys core
competencies like Blackberry, Motorola, Samsung and business processes that
have the greatest impact on customer satisf action, and then specif y measures f
or each.
3. Innovation and Learning Perspective: Companies need to be able to improve
constantly due to heavy competition and changing customer demands. Although
Nokia serially boosting their hi- technology and f orwarding with great
innovations.
4. Financial Perspective: Financial perf ormance measures indicate whether the
companys strategy, implementation and execution are contributing to bottomline improvement. Typical goals here have to do with prof itability, growth and
shareholder value. Nokia is f inancially strong and it always ready to complete
their planning to implement.
By combining all these dif f erent perspectives, Balanced Scorecard can help
managers to see and understand some of the interrelationships between them.
This understanding can lead to improved decision making and problem solving.