INTRODUCTION

Marketing:

The process of planning and executing the conception, pricing, promotion, and distribution
of ideas, goods, services, organizations, and events to create and maintain relationships that
will satisfy individual and organizational objectives."

Marketing is the management process responsible for identifying, anticipating, and satisfying
customer requirements profitably.

Goals:

1. Attract new customers by promising superior value.

2. Keep and grow current customers by delivering satisfaction.

3. Marketing is the activity, set of instructions, and processes for creating,

communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large.

OLD view of marketing:

Making a saletelling and selling.

NEW view of marketing:

Satisfying customer needs

Need: State of felt deprivation including physical, social, and individual needs.

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 Physical needs: Food, clothing, shelter, safety

Social needs: Belonging, affection

Individual needs: Learning, knowledge, self-expression

Want: Form that a human need takes, as shaped by culture and individual personality.

Wants + Buying Power = Deman

The 4 Ps of Marketing

Program

Goods or services (programs) and their benefits

Price

Cost for goods or services, e.g. money, time, travel

Place

Location (place, Web), also time of day/week/year

Promotion

Activities designed to publicize programs/services

Environmental Analysis > Response

Updated Goals

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 Sustainable, Profitable and Safe Plant, Animal and Food Systems

Environmental Stewardship and Natural Resources Management

Energy Conservation and Alternatives

Emergency and Disaster Preparedness Updated Goals

Healthy Weight and Chronic Disease Prevention

Life Skills and Parenting

Youth and Adults Achieve Educational Success

Needs & wants are fulfilled through a Marketing Offering:

Products:

Persons, places, organizations, information, ideas.

Services:

Activity or benefit offered for sale that is essentially intangible and does not result in
ownership.

Experiences:Consumers live the offering.

What We Have Done:

Retail Customer Survey

Capture data on name recognition, Extension topic interest, preferences for

communication, time and location, and demographic information.

Data pinpoint popular topics, target audiences and methods used to reach them.

Retail Customer Survey > Findings

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 High interest in Extension topics

Lower retail name recognition than expected

Preference for direct mail, TV, Web and newspaper source.

SCOPE OF THE STUDY

The scope of the study is to know the challenges and the reasons for the failure of nokia in
the international industrial market and to figure out the problems and issues related to the
failure and downfall of nokia mobiles.

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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.

Even though the nokia mobiles are quality with the reasonable price which are mostly attract
by the middle class family in the country. But lack technology up grade makes the nokia
phones down in the market.

NEED FOR THE STUDY

The need of the study is to analyze the existing situation of the company. In that study gives a
clear cut picture to company regarding financial reports to improve the gray of the areas of
the company. The study also helps the company analysis.

OBJECTIVE OF THE STUDY

The main objective of the study will be:

To know the reasons for the failure of nokia smart phones

To evaluate the preference level of nokia mobiles among the consumers

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 To know who suggested nokia brand to customers.

To figure out the problems and issues related to the failure and downfall of nokia
mobiles.

To know the consumer attitude towards the nokia market.

METHODOLOGY

SECONDARY DATA:

Apart from primary data the secondary data is being collected through text books, journals,
from library, etc.

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The secondary data collected from the company general reports of the organization and some internet,
company reports. Magazine, Internet searches or libraries, progress reports

LIMITATIONS

INDUSTRY PROFILE

Network equipment

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In the 1970s, Nokia became more involved in the telecommunications industry by developing
the Nokia DX 200, a digital switch for telephone exchanges. The DX 200 became the
workhorse of the network equipment division. Its architecture enabled it to be developed into
various switching products. In 1984, development of a version of the exchange for the Nordic
Mobile Telephony network was started.

For a while in the 1970s, Nokia's network equipment production was separated
into Telephone, a company jointly owned by the parent corporation and by a company owned
by the Finnish state. In 1987, the state sold its shares to Nokia and in 1992 the name was
changed to Nokia Telecommunications.

In 1998, Check Point established a partnership with Nokia, bundling Check Point's Software
with Nokia's computer Network Security Appliances.

Involvement in NMT (1G)

The Mobira Cityman 150, Nokia's NMT-900 mobile

phone from 1989 (left), compared to the Nokia
1100 , a GSM phone from 2003.

In 1979, the merger of Nokia and Salora resulted in the

establishment of Mobira Oy. Mobira began developing mobile phones for the NMT network
standard, the 1G, Finland's, as wells as world's first fully automatic cellular phone system that
went online in 1981. In 1982, Mobira introduced its first car phone, the Mobira Senator for
NMT-450 networks.

One year later, Nokia-Mobira Oy became Nokia Mobile Phones.

Involvement in GSM (2G)

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Nokia was a key developer of GSM (2G) (Global System for Mobile
Communications), the second-generation mobile technology that could carry data as well as
voice traffic. NMT (Nordic Mobile Telephony), the world's first mobile telephony standard to
allow international roaming, provided expertise for Nokia in developing GSM, which was
adopted in 1987 as the new European standard for digital mobile technology.

Nokia delivered its first GSM network to Finnish operator Radiolinja in 1989. The world's
first commercial GSM call was made on July 1, 1991 in Helsinki, over a Nokia-supplied
network, by then-Prime Minister of Finland Harri Holkeri, using a prototype Nokia GSM
phone. In 1992, the first GSM phone, the Nokia 1011, was launched. The model number
refers to its launch date, 10 November. The Nokia 1011 did not yet employ Nokia's
characteristic ringtone, the Nokia tune, which was introduced as a ringtone in 1994 with
the Nokia 2100 series.

GSM's high-quality voice calls, easy international roaming and support for new services
like text messaging (Short Message Service) laid the foundations for a worldwide boom in
mobile phone use. GSM came to dominate mobile telephony in the 1990s, by mid-2008
accounting for about three billion subscribers, with more than 700 mobile operators across
218 countries and territories. Connections were growing at the rate of 15 per second, or 1.3
million per day.

Loss of Smartphone market share

Apple'sI phone, originally launched in 2007, was initially still outsold by Nokia smartphones,
most notably the Nokia N95 for some time.\Symbian had a dominating 62.5% market share as
of Q4 2007 ahead of Microsoft's Windows Mobile (11.9%) and RIM (10.9%).

However, with the launch of the iPhone 3G in 2008, Apple's year-on-year market share
doubled by the end of that year and the market share of iPhone OS (now known as iOS)
pulled ahead of Windows Mobile, although Nokia retained a 40.8% share by Q4 2008;
nevertheless, it saw a decline of over 10% from Q4 2007, replaced by Apple's increasing
share.[95] The Nokia N96, released in late 2008, proved to be much less successful, although
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the Nokia 5800 XpressMusic was considered to be the iPhone 3G's main rival in some
quarters. The success of the business-oriented Nokia E71, was not enough to halt the decline
of Nokia's smartphone market share. On 24 June 2008, Nokia bought the Symbian operating
system and the next year made it open source.

In early 2009, Nokia released the Nokia N97, a touchscreen device with a landscape
QWERTY slider keyboard that was focused on social networking. It was a commercial
success despite its mixed reception. The N97's closest competitor was the iPhone 3GS. In
2009 several devices were launched, such as the Nokia E52, which gained positive
reception. However, Symbian's market share dropped from 52.4% in Q4 2008 to 46.1% a
year later. RIM (subsequently Blackbery) increased its market share during the period from
16.6% to 19.9%, while Apple increased its share from 8.2% to 14.4%. Android grew to 3.9%

2010 to 2013

In 2010, pressure on Nokia increased dramatically as Android and iOS continued to make
gains. Other Symbian OEMs including Samsung Electronics and Sony Ericssonchose to
make Android-based smartphones instead of Symbian, and by mid-2010 Nokia was its only
OEM outside Japan. Nokia developed Symbian^3 to replace S60, but it never became
popular. By Q4 2010, Symbian's market share dipped to 32%, surpassing Android's at
30%.Despite losing share, the smartphone unit was profitable and smartphone unit sales
increased every quarter during 2010. An estimated 4 million units were sold in Q4 2010.[106]

In February 2010, Nokia and Intel announced MeeGo, a merger of their Linux-
based Maemo and Moblin projects aiming to create a unified mobile operating system for a
wide array of devices, including tablets and smartphones. In particular, Nokia planned to use
MeeGo as a successor to Symbian on its future smartphones, but despite of warm reception
from all markets only Nokia N9 has been launched.

In an employee memo that surfaced in February 2011, Elop infamously described Nokia as
being on a "burning platform", blaming the "war of ecosystems" between iOS and Android as
part of Nokia's overall struggle, and asserting that the company needed to make major
changes to its operation.

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COMPANY PROFILE

ABOUT NOKIA

Nokia was founded by Fredrik Idestam, a mining engineer in 1865. The name Nokia was
decided in 1871 when he opened his second paper mill on the bank of Nokianvirta river.
Nokia started out with making paper which incidentally was one of the very first technologies
used for communications. Fredrik Idestam was the chairman of the company till 1896 when
he retired, and Leo Mechelin took over as the chairman.Under Mechelin, Nokia started a new
business unit of electricity generation. In 1898, Eduard Polon founded the Finnish Rubber
Works, which later became Nokias rubber business. They were making everything from
galoshes to tires. In 1912, Finnish Cable Works was established by Arvid Wickstrom, which
later .Nokia's headquarters are located in Espoo, a neighbouring city of Finland's capital
Helsinki. It has R&D, manufacturing, and sales representation sites in many continents
throughout the world. Nokia Research Center, the corporation's industrial research

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laboratories, has sites in Helsinki; Tampere; Toijala; Tokyo; Beijing; Budapest; Bochum; Palo
Alto, California and Cambridge, Massachusetts. Major production factories are located at
Salo, Finland; Beijing, China; Dongguan, China; Chennai, India; Komrom, Hungary and the
Ruhr region at Germany. In March 2007, Nokia signed a memorandum with Cluj-Napoca
City Council, Romania to open a new plant near the city in Jucu commune. Nokia's Design
Departure has stayed at Salo.

Nokia plays a very large role in the economy of Finland. Nokia is by far the largest Finnish
company, accounting for about a third of the market capitalization of the Helsinki Stock
Exchange (OMX Helsinki); a unique situation for an industrialized country. It is an important
employer in Finland and several small companies have grown into large ones as Nokia's
subcontractors. Nokia increased Finland's GDP by more than 1.5 percent in 1999 alone. In
2004 Nokia's share of the Finland's GDP was 3.5 percent and accounted for almost a quarter
of Finland's exports in 2003. In 2006, Nokia generated revenue that for the first time
exceeded the state budget of Finland. This has led some to refer to Finland as "Nokialand."
2000 to 2010

Product releases

Reduction in size of Nokia mobile phones. Left to right: Nokia 638 (1996; 19.06 cm height),
Nokia 2160 EFR (1996; 16.42 cm), Nokia 5160 (1998; 14.84 cm), Nokia 6070 (2006; 10.5
cm)

Nokia launched the Nokia 3310 in 2000. It has become one of the most popular devices of all
time. The Nokia 1100 handset launched in 2003, shipped over 200 million units, is the best-
selling mobile phone of all time and the world's top-selling consumer electronicsproduct, and
contributed to the company's rise in developing markets.[49] Nokia was one of the first to
recognize the market opportunity in combining a game console and a mobile phone (both of

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 which many gamers were carrying in 2003) into the N-Gage. The N-Gage was a mobile
phone and game console meant to lure gamers away from the Game Boy Advance, though it
cost twice as much.

Nokia Productions was the first mobile movie-making project which was directed by Spike
Lee. Work began in April 2008, and the movie premiered in October 2008.

In 2009, the company reentered the personal computing market, announcing a high-
end Windows-based netbook called the Nokia Booklet 3G. The company also entered the
smartphone market.

Symbian was Nokia's main smartphone operating system until 2011. Symbian was popular
among the Smartphone market during the 2000s.

Some popular Symbian-powered devices include the Nokia 7650, the first S60
Smartphone; Nokia N-Gage the first game-centric Smartphone; Nokia 6600, the first
Symbian Smartphone to sold over a million unit with a soap-like design; Nokia 7610, the first
Nokia with a megapixel camera; Nokia 6630 the first 3G Nokia Smartphone; Nokia N90, the
first camera-centric phone; Nokia N95, a popular slider; Nokia N82, with Xenon flash; Nokia
E71, offering a full "qwerty" keyboard and premium build; Nokia 5800 Xpress Music the
first full-touch smartphone; Nokia N97 with full-touch screen and a side-sliding QWERTY
keyboard; Nokia X6 the first capacitive touch screen and the Nokia N8 with the
newerSymbian^3 and 12 megapixel camera.

The 2012 Nokia 808 Preview had a record 41-megapixel camera, and represented the end of
the Symbian platform after its replacement by Windows Phone.[55]

Nokia 6600 from 2003 with a VGA camera, Bluetooth and expandable memory. It was the
first Nokia and Symbian device to sell over a million. (Series 60 2nd)

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Nokia N73 released in August 2006, with 3Gand a front camera. (S60 3rd)

The Nokia N95 released in March 2007, with a 5-megapixel camera and sliding multimedia
keys. Often considered Nokia's hero Smartphone. (S60 3rd)

Nokia E71 with a QWERTY keyboard, released in July 2008. (S60 3rd)

The Nokia 5800 Xpress Music, Nokia's first full-touch smartphone. (S60 5th)

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The Nokia N8 released in September 2010 is the first Symbian^3 device, and the first to
feature a 12-megapixel autofocus lens. (Symbian^3/Anna/Belle)

The Nokia 808 Preview, released in February 2012 as the last Symbian Smartphone, features
a 41-megapixel camera and a 1.3 GHz CPU. (Belle)

2014 PRESENT

In October 2014, Nokia and China Mobile signed a $970 million framework deal for delivery
between 2014 and 2015.

On November 17, 2014, Nokia technologies head Ramzi Haidamus disclosed that the
company planned to re-enter the consumer electronics business by licensing in-house
hardware designs and technologies to third-party manufacturers. Haidamus stated that the
Nokia brand was "valuable" but "is diminishing in value, and thats why it is important that
we reverse that trend very quickly, imminently.

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First hit when competition started. Second hit when Competitors took over

Partnership with Microsoft

In February 2011, Stephen Elop and Microsoft's CEO Steve Ballmer jointly announced a
major business partnership between the two companies, which would see Nokia adopt
Windows as its primary platform on future smart phones, replacing both Symbian and MeeGo.
The deal also included the use of Bing as the search engine on Nokia devices, and the
integration of Nokia Maps into Microsoft's own mapping services. Nokia announced that it
would still release one device running the MeeGo platform in 2011, but that it would devote
fewer resources to future development of the platform, and that it would phase out Symbian

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entirely. Aligning with Microsoft had been considered a possibility by analysts due to Elop's
prior employment with the company. Nokia unveiled its first Windows Phone 7-based
devices, the mid-range Lumia 710 and high-end Lumia 800, on October 26, 2011 at its Nokia
World conference.

After this announcement, Nokia's share price fell about 14%, its biggest drop since July
200] Nokia's Smartphone sales, which had previously increased, collapsed. From the
beginning of 2011 until 2013, Nokia fell from #1 to #10 in Smartphone sales. Amid falling
sales, Nokia posted a loss of 368 million euros for Q2 2011, whereas in Q2 2010, it had
realized a profit of 227 million euros. On September 2011, Nokia has announced it would cut
another 3,500 jobs worldwide, including the closure of its Cluj factory inRomania. As Nokia
was the largest mobile phone and Smartphone manufacturer worldwide at the time, it was
suggested the alliance would help Windows Phone. Nokia was overtaken by Apple as the
world's biggest Smartphone maker by volume in June 2011. In August 2011 Chris Weber,
head of Nokia's subsidiary in the U.S., stated "The reality is if we are not successful with
Windows Phone, it doesn't matter what we do (elsewhere)." He further added "North America
is a priority for Nokia (...) because it is a key market for Microsoft.".

Nokia reported "well above 1 million" sales for its Lumia line up to January 26, 2012, 2
million sales for the first quarter of 2012, and 4 million for the second quarter of 2012. In this
quarter, Nokia only sold 600,000 smart phones (Symbian and Windows Phone 7) in North
America. For comparison, Nokia sold more than 30 million Symbian devices world-wide in
Q4 2010and the Nokia N8 alone sold almost 4 million in its first quarter. In Q2 2012, 26
million iPhones and 105 million Android phones shipped, compared to only 6.8 million
devices with Symbian and 5.4 million with Windows Phone.

While announcing an alliance with Group on, Elop declared "The competition... is not with
other device manufacturers, it's with Google. In June 2012, Nokia chairman Risto
Siilasmaa told journalists that Nokia had a contingency plan in the event that Windows Phone
failed, but did not specify what it was.

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Market share of Windows Mobile and Windows Phone 7 among US Smartphone owners
from Q1 2011 to Q2 2012 according to Nielsen Company.

On February 8, 2012, Nokia Corp. announced 4,000 layoffs at Smartphone manufacturing

plants in Europe by the end of 2012 to move assembly closer to component suppliers in
Asia. On 14 June 2012, Nokia announced 10,000 layoffs globally by the end of 2013 and shut
production and research sites in Finland, Germany and Canada in line with continuing losses
and the stock price falling to its lowest point since 1996. On June 18,
2012, Moody's downgraded Nokia's bond rating to junk. Nokia CEO admitted that the
company's inability to foresee rapid changes in the mobile phone industry was one of the
major reasons for the problems. On 4 May 2012, a group of Nokia investors filed a class
action against the company as a result of disappointing sales. On August 22, 2012, it was
reported that a group of Finnish Nokia investors were considering gathering signatures for the
removal of Elop as CEO.

In December 2012, Nokia announced that it would be selling its headquarters Nokia
House for 170 million, and leasing it back in the long-term. This decision was taken to slash
costs as the company was during a financial crisis of falling revenues.

In total, Nokia laid off 24,500 employees by the end of 2013.

In January 2013, Nokia reported 6.6 million Smartphone sales for Q4 2012 consisting of 2.2
million Symbian and 4.4 million sales of Lumia devices (Windows Phone 7 and 8) In North
America, only 700,000 mobile phones have been sold including smart phones.

In May 2013, Nokia released the Asha platform for its low-end borderline Smartphone
devices. The Verge commented that this may be a recognition on the part of Nokia that they
are unable to move Windows Phone into the bottom end of smart phone devices fast enough
and may be "hedging their commitment" to the Windows Phone platform.

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In the same month, Nokia announced its partnership with the world's largest cellular
operator China Mobile to offer Nokia's new Windows-based phone, the Lumia 920, as Lumia
920T, an exclusive Chinese variant. The partnership was a bid by Nokia to connect with
China Mobile's 700 million-person customer base.

Following the second quarter of 2013, Nokia made an operating loss of 115m (98.8m),
with revenues falling 24% to 5.7bn, despite sales figures for the Lumia exceeding those
of BlackBerry's handsets during the same period. Over the nine-quarters prior to the second
quarter of 2013, Nokia sustained 4.1 billion worth of operating losses. The company
experienced particular problems in both China and the U.S.; in the former, Nokia's handset
revenues were the lowest since 2002, while in the U.S., Francisco Jeronimo, analyst for
research company IDC, stated: "Nokia continues to show no signs of recovery in the US
market. High investments, high expectations, low results."

In July 2013, Nokia announced that Lumia sales were 7.4 million for the second quarter of
the year .

Sale of mobile phone business to Microsoft

On September 2, 2013, Microsoft announced that it would acquire Nokia's mobile device
business in a deal worth 3.79bn($4.25bn), along with another 1.65bn($1.85bn) to license
Nokia's portfolio of patents for 10 years; a deal totaling at over 5.4bn($6.05bn). Steve
Ballmer considered the purchase to be a "bold step into the future" for both companies,
primarily as a result of its recent collaboration. In an interview with Helsingin Sanomat,
former Nokia executive Anssi Vanjoki commented that the Microsoft deal was "inevitable"
due to the "failed strategy" of Stephen Elop.

Its deal was closed on April 25, 2014 for "slightly more" than the originally stated
5.44($6.10) billion. Nokia's mobile phone assets became a part of Microsoft Mobile, a new
subsidiary of Microsoft based in Finland. The deal was originally expected to be closed in
March 2014, but was delayed by a tax dispute involving a factory in Indiaofficials claimed

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that Nokia had not properly paid taxes on devices that were produced at the plant, but sold
domestically (exports are exempt from taxes). Indian governments had required that Nokia
place money in escrow before it was allowed to transfer control of the factory to Microsoft.
As a result, the plant was not transferred to Microsoft, but produced products on behalf of the
company.

As part of the deal, Microsoft acquired the Asha, X and Lumia brands, but only had a limited
license to the Nokia brand. Microsoft could only use the Nokia brand to promote Asha, X and
Lumia products until December 2015, and feature phones for 10 years. Microsoft did not
acquire any rights to the Nokia tune, which the company may only use as the default ringtone
on Nokia-branded devices. Nokia itself was also subject to a non-compete clause forbidding
it from manufacturing any Nokia-branded smartphones until December 2015. Microsoft also
took over Nokia's website and social media outlets following the closure of the deal; this
arrangement was in place for a minimum of one year after the closure. The company
continued to use the Nokia name on smart phones through October 2014, when Microsoft
announced that future smart phones would be branded with Microsoft's name and logo.

A number of Nokia executives joined Microsoft as a result; Stephen Elop became the head of
Microsoft's devices team (which include products such as Xbox and Surface lines);Risto
Siilasmaa replaced Elop as interim CEO, before the appointment of Rajeev Suri. Post-
acquisition, Nokia focuses on two core business units; its infrastructure division Nokia
Networks, and developing and licensing division Nokia Technologies.

In July 2014, Microsoft announced a significant layoff of workers, including 12,500 workers
from the former mobile phone group at Nokia. Microsoft also ended future development of
Nokia's non-Windows Phone product lines, in favor of focusing only on Windows Phone
and Series 30+ devices.

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ANALYSIS:
Challenges of growth

In the 1980s under CEO Kari Kairamo, Nokia expanded into new fields, mostly by
acquisitions. In the late 1980s and early 1990s, the corporation ran into serious financial
problems, partly due to heavy losses in its television manufacturing division. Kairamo
committed suicide in 1988. After Kairamo's death, Simo Vuorilehto became Nokia's chairman
and CEO. In 19901993, Finland underwent a severe recession, which also struck Nokia.
Under Vuorilehto's management, Nokia was severely overhauled. The company responded by
streamlining its telecommunications divisions and by divesting itself of the television and PC
divisions.

Probably the most important strategic change in Nokia's history was made in 1992, however,
when the new CEO Jorma Ollila made a crucial strategic decision to concentrate solely on
telecommunications. As late as 1991, more than a quarter of Nokia's turnover came from
sales in Finland. However, after the strategic change of 1992, Nokia sales to North America,
South America and Asia became significant. The worldwide popularity of mobile telephones,
beyond even Nokia's most optimistic predictions, created logistical crisis in the mid-
1990s, prompting Nokia to overhaul its entire supply chain. By 1998, Nokia's focus on
telecommunications and its early investment in GSM technologies had made the company the
world's largest mobile phone manufacturer, a position it held until 2012. Between 1996 and
2001, Nokia's turnover increased almost fivefold from 6.5 billion euros to 31 billion
euros. Logistics continued to be major advantages over rivals, along with greater economies
of scale.

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The company decided to exit consumer electronics in the 1990s and focused solely on the
fastest growing segments in telecommunications. Nokian Tires, manufacturer of tires, split
from Nokia Corporation in 1988and two years later Nokian Footwear, manufacturer of rubber
boots, was founded. In 1989, Nokia also sold the original paper business; currently this
company is owned by SCA. During the rest of the 1990s, Nokia divested itself of all other
businesses.

Why Nokia failed?

One of the giants in mobile manufacturers sold itself to Microsoft. Is it a sign of

failure or its inability to maintain a firm. No doubt its a failure to properly manage.

So, why do you think Nokia failed. Be attentive to know the reasons behind failure of
Nokia's marketing strategy and what can be learnt from it.

How Nokia failed in connecting 'to' people

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.

In a nutshell, that's how Nokia, which enjoyed a 60% market share in India, ended 7-
9% as per IDC Asia Pacific Mobile Tracker in Q4 2012.

Android weakened roots of Nokia?

In 2008, brands like Samsung, HTC, and Sony found roots to extend their market.

Samsung's Android phones are user friendly and budget friendly too.

When every manufacturer is busy in making touch screen mobiles, Nokia felt that
touch wouldn't have a scope in the near future but customers overwrote their
expectations.

Nokia's entrance into Windows platform is quite late

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 Finally Nokia gave up for a 7.1 billion to Microsoft.

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 are 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.

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.

3. NOKIA Became Laggard in Smartphone Market

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 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.

4. Losing Market Share on Both Ends

Nokia not only failed to realize competition from Apple, Samsung, Sony, Blackberry
in high end smart phones, they also failed to notice the stiff competition in the lower
segments of phones.

The company which used to have epic models like Nokia 1100 suddenly started losing
at lower ends too.

Very lately company realized this thing and launched their Asha series but by that
time they had already lost the game.

5. Failure to Implement the Right Umbrella Branding Strategy

Apple was the first phone to use the strategy of umbrella branding using iPhone as an
umbrella brand and then building subsequent models each year.

Samsung was quick in identifying this concept and they started building their high
end phones with Galaxy S series.

Nokia on the other hand used to have used an umbrella brand in the N series and
recently the Lumia series, but they failed to create buzz among customers which
Apple created.

The company which is missing the constant innovation has the high probability of
getting punished from the customer.

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SWOT

Strength

Experience

Largest network of selling & distribution

Strong customer relation

Wide range of products for all class

Weakness

Low voice quality

Less stylish in low priced products

Heavy sets

Unlike iPhone Apple, Nokia N-series is complex, tough and not user friendly

Opportunities

New growth markets

Concentrate on Smartphone's

Well designed and styled set

Mini notebooks

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 Threats

China mobiles It has made exact copy of Nokia

Competitors like Samsung & Apple

Sales may decline due to global economic downturn

Standard & Poor downgraded Nokia with low grade

Here was a time when Nokia ruled, Samsung struggled and Apple was nowhere in the phone
market. Now the roles are reversed and Nokia is struggling hard not be nowhere.

Samsung has surpassed Nokia in cell phone sales, thereby ending Nokias 14-year rule as a
leading handset maker, according to IHS iSuppli and Strategy Analytics. Nokia shipped 83
million handsets in Q1 2012, while Samsung shipped 92 million handsets. Its not just about
those numbers. Standard & Poor has also downgraded Nokias bonds to a grade of BB+/B.

Nokia became the worlds largest cell phone maker in 1998 when it overtook Motorola at a
time when Samsung had just entered the industry and it controlled around 40 per cent of the
market for years before Apple Incs iPhone was unveiled in 2007.

"After 14 years as the largest global mobile phone maker, getting knocked off the top spot
will come as a bitter blow to Nokia," says Ben Wood, head of research at CCS Insight, who
has followed the industry since the 1990s.

But whats the reason behind Nokias fall? Here are the possible things that went wrong with
Nokia.

COMPLACENCY
As a market leader for over a decade, Nokia didnt really plan for the future as it seemed a bit
complacent with its products. When Apple launched the iPhone in 2007, the first touch
phone, Nokia was still priding in its E-series by when the definition of smart phone had
undergone a tremendous change. That was least expected from the pioneer in the smart phone
market.

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The success of iPhone didnt have any significant impact on Nokia, unlike Samsung, which
experimented with off-the-shelf technologies and managed a transition to smart phones much
faster than expected. And Nokia, which had launched its first smart phones through its
Symbian series 60 in 2002, remained a pioneer with no better future prospects. Nokia failed
to anticipate, understand or organize itself to deal with the changing times.

LACK OF INNOVATION

While Samsung comes up with new phones almost every year with a slight modification from
the previous launch, Nokias Windows phone which came in 2011 lacked some basic
technology essential to drive its sales. Nokias Lumia series was launched with a bang, but
didnt click. Reasons can be its design, which wasnt as attractive as Samsung phones or the
iPhone. Today the sale of phones is dependent on how shiny or trendy it looks. Leave aside
the looks, Nokia phones didnt have the front camera, which makes it not even 3G enabled.
And we are on the threshold of entering the 4G era. So, Nokias latest phones were feature
ready, but not future ready.

FROM SYMBIAN TO WINDOWS

Nokia was solely dependent on Symbian till it entered into a partnership with Microsoft
recently. But its shift to Windows was considered a tad too late as by then Apple and
Samsung had established their dominance. The operating system space was nearly occupied
by Android and iOS leaving not much role for Windows. But that cannot be translated into a
failed partnership. Nokia and Microsoft are no weaklings, they do have assets. We believe
that there is a good chemistry there with that partnership, and ultimately long-term Windows
Phone will be successful, Wayne Lam, IHS senior analyst, was quoted by Wired. Hence
whats advisable for Nokia is to adopt multi-operating systems to make the most of all.

27
 Journey towards failure

Year 2006

Nokia is on a high. It enjoys 60% share of India's mobile market and is the undisputed lead.

Year 2007:

June 29

Apple launches iPhone 3s.

Redefines smart phone and challenges category leaders like BlackBerry and Nokia.

Year 2008

March

Micromax sets up handset business in India.

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September

Samsung launches Omnia. Becomes dominant in touch screen phones globally.

Year 2009

June

Android enters Indian market with HTC Magic at Rs 29,990.

Year 2010

June

Samsung launched Galaxy S in India at Rs 31,500, its first smart phone.

Later, Galaxy-3 (Rs 12,300) & Galaxy-5 (Rs 10,200).

Samsung's smart phone sales surge.

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August 30

Nokia launches C1 & C2dual SIM phones.

Nokia market share in India for 2010 (Jan-Sept), according to IDC, crashes to 32.9%

Year 2011

February

Nokia announces Microsoft patnership, but it takes 8-9 months to unveil products.

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 Meanwhile, Samsung consolidates position while Micromax, Karbonn, Lava, Spice
launch cheaper smartphones.

March

iPhone 4. The iPhone changed the industry in more ways than one: apps, superlative
design and accessories.

But Nokia is still struggling to find traction with Windows.

June

Nokia launches dual-SIM phones, becomes no.1 player in this space, but it is 18
months late. This delay cost Nokia.

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November

Samsung's Galaxy Note, iPhone 4S launched.

December

Nokia's Lumia 800 (Rs 29,000)

Lumia 710 (Rs 19,000) launched.

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Year 2012

January

Nokia fights back. Launches first Asha, 200 for Rs 4,400. It is its first QWERTY dual-SIM
device. Strong product, but dual-sim market is past its peak.

June

Full-Touch Asha 305 launched. Nokia claims it's largest-selling smartphone; but rivals and
some tracking agencies don't consider Asha a smartphone.

September

Nokia Market share is 22.2 % and 19.2% in smartphones.

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November

iPhone 5 launched.

December

Samsung's India Galaxy sales count crosses 1 crore.

Year 2013

Nokia's market share dwindles down to 7-9% as per IDC Asia Pacific Mobile Tracker in Q4
2012.

March

Lumia 520 (Rs 10,000) launched but Samsung, Micromax move ahead.\

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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.

If analyzed through the Technology Lens, Nokia primarily failed to innovate attractive
technology and features.

For example, though Nokia had touch screen phones, it did not attract customers as
much as compared to Apple iPhones.

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 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.

Time for Change?

With the company facing fierce competition, Nokia started reporting financial losses
and started losing grip on the market.

Olli-Pekka Kallasvuo, as President and CEO, saw the company's rise to become the
world's preeminent mobile brand but was also at the helm as Nokia fell distantly
behind a new wave of competition.

He was seen off by the management and he was succeeded by Stephen Elop on
September 21, 2010.

Human resources?

As per Stephen Elops initial memo, which leaked to the press, the company was on a
burning platform. This was a reference to the Symbian OS the company had been
using for so long.

This was regarded as very discouraging and one of the most damaging memo in
corporate governance.

Although Elop tried his best, the company saw its worst days.

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 Market share fell drastically from 45% to 34% in 2011

Nokia posted a loss of 368 million Euros for Q1 2011

Redrafting Strategies

In 2011, Nokia joined forces with Microsoft to strengthen its position in the
Smartphone market.

The strategic partnership saw Nokia dump Symbian OS and adopt the Windows
Phone operating system and establish an alternative ecosystem to rivals iOS and
Android. But it was too late.

Under the leadership of the Stephen Elop, Nokia decided to stick to only and only
Windows OS while Android was a free alternative.

Nokia launched Windows Phones series dubbed as the Nokia Lumia. Fast-forward to
2013, Nokia has a full portfolio of great Windows Phone 8 smartphones, from a 520
through the award-winning Lumia 920 and the ground-breaking Lumia 1020, which
enables photography never seen before in a smartphone.

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 smart phones.

Stephen Elop facilitated this deal and his role in it has been questionable.

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38
What did Stephen Elop do wrong?

Inspecting with the organization and human performance lens.

Wrong decisions.

While the entire smart phone 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.

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Results

During the 3 years Elop was Nokia CEO, Nokia revenues fell 40%, Nokia profits fell
95%, Nokia market share collapsed in smart phones 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

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WHAT WENT WRONG?
We will take use the 3 primary lenses which enable the process to analyze where Nokia
possibly went wrong. Nokia made choices, we feel, it shouldnt have and will note these in
our analysis below.

I) Strategy

Symbian OS was created by Symbian Ltd., which was a joint venture between Psion, and
phone manufacturers Ericsson, Motorola and Nokia. Symbion was the most popular
smartphone OS on a global average till Q4 2010 with Nokia having Symbian as the OS in its
all flagship phones. In June 2008, Nokia acquired Symbian Ltd. under a decision to make the
Symbian OS open-source platform so that more developers can use it to develop their mobile
apps. In February 2010, it was officially made available as open source code. But it was a
little too late as Android, which was already open-source and freely available, and iOS has
already started to eat into Symbian market pie with their advanced platforms & a huge
number of support applications on the smartphones. On February 11, 2011 Nokia announced
partnership with Microsoft and carry their OS i.e. Windows OS in their smartphones. A study
in June 2011 showed that over 39% of the mobile developers using Symbian had planned to
abandon the platform for either Android or IOS. By June 2011,, Nokia had made a deal with
Accenture for Symbian based software development and support services through 2016
which also saw 2800 of Nokia employees moving base to Accenture.

II) Technology

Nokia was a pioneer of technology in mobiles and cell phones. Nokia came a long
way to reach that state, but only due to aging staff and technology could not stand to the new
wave of competition. Nokia. Nokia had the Mobira series from 1982-1990 which were very
popular during its times. From 1990- 1999, Nokia sold the Original series of phones, which
also saw the inclusion of a newly developed GSM technology. Nokia later went forward to
production color screen phones, digital camera featured phones and even music capable
phones. Nokia also had a gaming series of phones which were selling like hot pancakes
amongst teenagers. They indirectly took over Sonys walkman, Apples iPod and other related

41
products market share. Nokia later had business series phones with push email and other
corporate benefitting features.

Later on they used to Symbian OS and were literally on top of the world with their
remarkably smart featured phones. But by this time, Nokia had reached the peak of its
research and development cycles. What they needed to do was to usher in a revolutionary
new technology to continue dominating the market after 2007. But this was brought in by a
new breed of engineers working at Apple and Google, who came up with iOS and Android
Operating Systems. Nokia still believed that it's Symbian OS was capable of fighting this
decision but eventually realized it were not worth the fight and started looking for new OS
partners. In 2009, Nokia developed MaeMo OS, which was later terminated in favor of
Maemo OS. These OS was developed in-house and then handed over to a contractor for
developing apps for them. Although initially it attracted developers, it lacked the charm iOS
and Android had to offer. This was when Nokia decided to go out in the market to look for a
partner for their amazing hardware devices. After their tie-up with Microsoft for its Mobile
Platform OS Windows 7.5 Mango, Nokia launched the Lumia series, which featured
revolutionary hardware advancements. The Nokia Lumia 1020 had a staggering 41 MP Carl
Zeiss camera. Lumia 610 featured NFC which is the top of the class wireless transfer
technology. But by then Nokia was all stripped down of its glory. Nokia also launched the
Asha set in India and other developing nations, which once were its strongholds, but they
performed averagely.

It wasnt until January 25th, 2013 that Nokia announced it would stop shipping
Symbian phones. By then Nokia was shipping only Windows OS based phones. Nokia had to
train an entire division of people for the task such as writing Operating system level code to
developing apps for it. In September, 2013, Microsoft announced it will be buying Nokias
mobile business for $7.2 billion. This signifies the buyout of a failed company by a giant
which caused it to fail in the first case.

III) People

We have mentioned above the various CEOs of Nokia and their valuable contribution
to the company. In September 2010, it was announced that Elop would take Nokia's CEO
position, replacing Olli-Pekka Kallasvuo, and becoming the first non-Finnish director in

42
Nokia's history. On 11 March 2011 Nokia announced that it had paid Elop a $6 million
signing bonus, compensation for lost income from his prior employer," on top of his $1.4
million annual salary. As soon as Stephen Elop took over he sent an internal memo to his
employees which got leaked to the press. The memo dubbed as Burning platform was one
of its kind and regarded as one of the most ridiculous corporate memo. Below is a glimpse of
its content.

CONCLUSION

On the basis of this study it is understood that the role of Stephen Elop is the contributing
factor in the failure of Nokia as a company. The conspiracy theory states that even though
Stephen Elop came from Microsoft to Nokia but against all the ethical rules of
professionalism but he continued to make decisions which were beneficial for Microsoft. The
argument is supported by the facts and statistical data given in the paper on how Nokia went
on a downward spiral after Stephen Elop joined as the CEO. His decisions of only carrying
the Windows operating system in all of their phones & abandoning all other operating
systems did no good for the companys performance in the business. His decision of not
going for the Android OS after Symbian while the other mobile carriers such as Samsung,
Sony Ericson did, eventually led to Nokia losing a major market share. The sales of Nokia
dropped over the period of his tenure which eventually led Nokia being sold to Microsoft. So
the research in this paper digs deeper into the role of Stephen Elop is the downfall of Nokia.
We wonder what would have been if Nokia would have embraced Android as it is the biggest

43
Smartphone operating system in the world by far. Soon after being sold to Microsoft, ousted
employees are on the look for investors to manufacture same quality hardware devices with a
variety of Operating Systems other than Windows. Despite its strong position, Nokia lost out
to new entrants who emerged as the mobile industry converged with adjacent digital
industries. The company did not only fail to beat these new entrants in bring market leading
innovations to the market in a timely manner, but also failed to respond appropriately to
threats posed by the innovations produced by its new competition.

BIBLIOGRAPHY

WEBSITES:

www.bbc.co.uk

www.scmp.com

www.gartner.com

www.nokia.com

http://online.wsj.com/news/articles

www.forbes.com

BOOKS:

Hamel, G., & Prahalad, C. K. (1994). Competing for the future Harvard Business Review.

J P. Herring (1999) Key Intelligence Topics: A Process to Identify and Define Intelligence
Needs" Competitive Intelligence Review.

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