Nokia Company Profile and SWOT analysis.

are certain external factors that should be considered when developing a market strategy for Nokia. These factors will include a SWOT (Strength, Weakness, Opportunities and Threats) analysis and also PESTEL (Political, Economic, Social, Technological, Environmental and Legal) factors.                                                                                                             3.1 SWOT Analysis of the company3.1.1 Strengths (Internal factors)Strong brand image Nokia's core asset is its strong brand image. The company continues to strengthen its brand equity through various marketing campaigns. Nokia's brand was the fifth most valued brand in the world and was the only mobile phone manufacturer in the top 10 best brands list compiled by InterBrand and Business week in 2007. The company was also recognized as Asia's most trusted brand in 2006 among 1,000 brands across 15 product and service categories. The company is the leading mobile phone brand in most of the countries it operates. Further, according to Brand Equity 'Most Trusted Brands' survey 2008, Nokia became the most trusted brand in India, which is the second largest revenue contributing country to the company's total revenue, as of 2007.                                                                                                                                                                           Leading market position Nokia has been the leading player in the global mobile device market since 1998. The company has a global market share of approximately 38% of the global market volume of 1.14 billion mobile devices units sold in 2007. The company's total mobile device volume was 437 million units in 2007, an increase of 26% from 347 million units in 2006.                                                                                                          It also sold 60.5 million converged devices (Smart phone) in 2007 compare to 39 million in 2006.                                                   This made Nokia a leader in the converged device segment and the world's largest manufacturer of cameras and digital music players. The company's strong market position, besides enhancing the brand image, provides economies of scale in operation.Increasing presence in growth markets Nokia has a strong presence in growing markets such as India and China. In FY2007, China, the company's largest geographical market, accounted for 11.6% of the total revenues. The revenues from China reached E5, 898 million (approximately $8,084.6 million) in 2007, an increase of 20% over 2006. In FY2006, its revenue from China grew at 44.4% over 2005. India became the second largest revenue contributor to the company's total revenues in FY2007 replacing the US. India accounted for 7.2% of the total revenues in FY2007, compared to 6.6% in 2006. Further, the company's market share in India has increased to approximately 60% as of 2007. A strong presence in growing markets enhances the growth prospects of Nokia.   Product warrantee worldwide No matter where Nokia’s customers are, if they got a problem from Nokia’s mobile phone. Of course, they can use Nokia service worldwide wherever Nokia centers are. These can ensure customers who worried about service system.                                                                                                                           3.1.2 Weaknesses (Internal factors)New Product Develop ProblemsAlthough Nokia provided colour screen mobile phones in September 2002, this was already late in the market that compared to its competitors, such as Sony Ericsson, and Samsung (BBC NEWS, 2002).   As Fahad (2002) mentioned that Nokia is not so successful in the market because it was too slow to introduce its colour screen mobile phones and its global competitors produced more ‘new products’ in these years. Weak high end product portfolio Nokia's high end product portfolio is weak compared to its competitors. The company's high end products are mainly offered through the N-series range as part of its multimedia offerings.While the company's multimedia products feature music players, cameras, pocket computers, gaming consoles and navigation devices, it lacks touch screen functionally and sleek designs compared to products of its competitors. 3.2 Opportunities (External factors)Strategic acquisitions The company made several strategic acquisitions in the recent years to enhance its offerings. Its recent successful acquisitions include Trolltech, a software provider with software development platforms and frameworks and NAVTEQ, a provider of digital map information.   In FY2007, Nokia acquired Twango, a provider of media sharing solution for organizing and sharing photos, videos and other personal media. It also acquired Enpocket, a global leader in mobile advertising with technology and services for planning, creating, executing, measuring and optimizing mobile advertising campaigns along with Avenue, a company providing secure remote access and private sharing technology that allows users to access and view PC files remotely. Nokia Siemens Networks Nokia and Siemens established a 50-50 joint venture, Nokia Siemens Networks (NSN), combining Nokia's networks business and Siemens' carrier related operations for fixed and mobile networks. The combined company had pro-forma revenues of E15.8 billion in 2005, with approximately 60,000 employees in its rolls. In FY2007, NSN recorded revenues of about $18,358.3 million (NSN consolidated revenues includes that of Nokia Siemens Networks on a fully consolidated basis from April 2007). The joint venture is forecast to achieve significant cost synergies estimated at approximately E1.5 billion annually by 2010.   Nokia Siemens Networks which started operations in April 2007 could provide significant long term returns to the company.   Expansion into content services Nokia has been strategically moving into the content market. It launched 'N-Gage' gaming service and 'Share on Ovi' media sharing site in February 2008 to expand into mobile Internet services. The company is the first handset maker to move strongly into the content space. Further in the second quarter of 2008, the company expanded its network of Nokia Music Store in Sweden, Singapore, France, Australia, the Netherlands and Ireland. It also announced agreements with Warner Music Group and Sony BMG Music Entertainment for their respective catalogs to be made available through Nokia Music Stores. The worldwide mobile content services are expected to record strong growth in the coming years. For instance, Informa expects revenues from mobile games to reach $7.2 billions in 2012 from $3.2 billion in 2007. It also expects revenues from mobile social networks to grow to at least $29 billion by 2012 from $1.5 billion in 2006.   3.2.1 Threats (External factors)Product recalls   In August 2007, Nokia issued a product advisory for the Nokia-branded BL-5C battery manufactured by Matsushita Battery (Matsushita) of Japan between December 2005 and November 2006. The company issued a product advisory as result of approximately 100 reported incidents of overheating globally. This resulted in the company recalling 46 million batteries manufactured by Matsushita between December 2005 and November 2006. Nokia has several suppliers for BL-5C batteries who have collectively produced more than 300 million BL-5C batteries including that produced by Matsushita. Though the company initiated product recalls at an early stage, these recalls would negatively impact the company's reputation and brand image. Increasing competition Nokia is facing severe competition in all the segments of the communications market it operates. In the mobile devices segment, the company has been facing competition from other mobile device companies such as LG, Motorola, Samsung and Sony Ericsson. Additionally, it is also facing competition from mobile network operators offering mobile phones under their own brand. In the multimedia and enterprise solutions segment, the company is facing intense competition from internet based products and services, consumer electronics manufacturers and business devices and solutions providers. The launch of iphone by Apple, and Microsoft's entry into this segment has further intensified competition. Litigation issues The company is facing allegations related to possible health risks from electromagnetic fields generated by base stations and mobile devices. Nokia, and other manufacturers, and cellular service providers have been involved in several class actions for the last seven years.                                                                                                   This is in relation with the alleged failure to properly warn consumers of potential adverse health effects and failure to package headsets with every handset to reduce the potential for adverse health effects. Two of these cases were either withdrawn or dismissed. The remaining cases are before the US District Court for the District of Maryland in Baltimore, Maryland. Any negative results from these cases and further studies could lead to significant changes of devices, which could affect operations of mobile device manufacturers such as Nokia.4. PESTEL AnalysisPolitical factorsLegal constraints (such as the G3 technology constraints that Nokia have to take into consideration) 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 (such as weaker materials for Nokia cases and batteries), also some companies may also dispose their waste in ways that damage the environment (pollution) and not ensuring high standards of hygiene and safety in the workplace and outlet stores, all of these are illegal and can leave companies in big legal trouble. 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. Economic factorsAccording to the fact that Russian Federation was collapsed in early 1990s and it assaulted with Finnish economics Organization for Economic Co-operation and Development (OECD, 1996).   Nokia also face with the problem, and changed its functions from single market and overall products to global market and focusing mobile phone market. Technological In the communications market technology is perhaps the most important factor that companies like Nokia have to take into consideration. They have to keep up to date with all the newest technological advances (like camera and motion capture phones) if they are going to capture the biggest market share and stay ahead of their competitors (Sony and Siemens).                                                       Environmental social and ethical factors Some businesses view profits are more valuable then a strong ethical code and this can govern behaviour and business conduct. Some un-ethical practices are against the law and companies can not become involved in them (I have mentioned these above) 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 practice's can lose a lot of market share if they are found out.An example of this is cosmetic testing on animals, it is legal but some of the consuming public are not happy about it and boycott certain products because of it, companies must be very careful about how they conduct themselves. Nokia have managed to be quite environmentally friendly and have not done anything that the consuming public have taken huge offence to, they have been very careful about this and this is one of the reasons they are such a popular brand of mobile phones.Legal factorsThese are related to the legal environment in which firms operate. In recentyears in the UK there have been many significant legal changes that have affected firms' behaviour.The introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle are examples of relatively recent laws that affect an organisation's actions. Legal changes can affect a firm's costs (e.g. if new systems and procedures have to be developed) and demand (e.g. if the law affects the likelihood of customers buying the good or using the service). 4.1 Ansoff's MatrixWhy I choose Ansoff's matrix-Since most of Nokia products are existing products in an existing market, this research made use of Ansoff’s matrix in a bid to help Nokia grow as a business. With this, the research looks at:                   ■ Market penetration •                   ■ Market development                   ■ Product development and                   ■ Diversification                           Current products                         New products      Market penetration       Product development    Market development           DiversificationCurrent marketsNew markets                                    Figure: The Ansoff matrixMarket penetration The aim of market penetration is to sell existing products to an existing market, to do this Nokia must do a few things:         ■ Change the pricing scheme (for example, penetration or competitor based)         ■ Introduce discounting               ■ Start up a different advertising campaign or consider changing an existing one. Market development To complete market development successfully, Nokia must look into the following:                 ■ Researching and selling to a different market (in case of saturation or poor market share)           ■ Change times that television adverts are aired at and alter the places in which print adverts are being displayed (this can help your products appeal to a whole new market segmentation)           ■ Lower current prices to help the products appeal to a wider range of consumers. Product development   This area of the Ansoff's matrix involves keeping up to date with the latest technologies available in your chosen market and using them to appeal to different people (for example, WAP phones are aimed at more professional people while Camera phones are aimed at the youth market) DiversificationThis 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 profits.                                                                                                                                            TASK-24.1.1 Mission and Vision Statement of NokiaMission Statement: Connecting people By connecting people, we help fulfil a fundamental human need for social connections and contact. Nokia builds bridges between people-both when they are far apart and face-to-face and also bridges the gap between people and the information they need.   The mission of our venturing activity: the renewal of Nokia.Venturing at Nokia contributes to Nokia's renewal by identifying and developing new businesses. The Nokia Ventures Organization and the other venturing teams throughout Nokia are working on new businesses that fall outside the scope or current focus of Nokia's core business units. Vision Statement              "Vision without action is daydream. Action without vision is a nightmare".                                                                                                           -----Japanese proverb                               "Your vision is the promise of what you shall one day be; your ideal is the prophecy Of what you shall at last unveil."                                                                                     ---- James Allen● In 1992 Nokia's strategic intend was expressed in four criteria             ----- Focused          ----- Global          ----- Telecommunications-orientated          ----- High value-added                                            ● Its vision was the voice will go wireless                                                                      ● In 1997 the strategic intend was articulated in terms of a mobile information society and bring the internet to everyone's pocket.● The Nokia vision in 1992 led to the company divesting a broad range of businesses that contributed some 90 percent of its revenues and to focus on the manufacture of handsets and network equipment.                                                    ● The 1997 vision further consolidated Nokia's market position and led to the development of the picture phone and the mobile internet etc.                  ● The Company’s 2006 vision is about "the awesome potential in connecting people”                         Wherever, whenever, we believe in                                         Communicating, sharing                      And in the awesome potential of                       Connecting the 2 billion who do,                                            With the 4 billion who don't.●   The Company's 2007 vision is a world where everyone can be connected, and with mobile subscriptions expected to hit four billion in 2009, we are closer to that then any one could have imagined just a few years ago. 4.1.2 Goals and SMART Objectives of NokiaGoals Nokia’s aim is to comply in all material respects with applicable rules and regulations. To the extent any such non-domestic rules and regulations wouldrequire a violation of the laws of Finland, Nokia is obliged to comply with theFinnish requirements. Nevertheless, the Company aims to minimize the necessity for, or consequences of, conflicts between the laws of Finland andApplicable non-domestic requirements. Five Performance ObjectivesS – Specific – objectives are aimed at what the business does, Nokia want to be a good neighbour concerned for the company and the environment if they achieve this they get a good reputation for being environmentally friendly and this could bring more customers to the business                           M - Measurable – an objective must be measurable so the managers can assess whether it has been achieved or not. The business can put a value to the objective, for example reach Nokia's net sales for 2007 increased 24% to EUR 41121 million for 2006.   A - Achievable – To be a good employer and sustain a working environment that attracts, retains and develops committed employees who share in the success in the company. Nokia wants to achieve this so that workers work well together to help the company. To do this they will need to make sure all the staffs are treated equally, trained well and happy. R-Relevant – the objective should help the business achieve its overall aim. For example, if the main aim of Oxfam is to increase the welfare of the people it serves then a relevant objective could be to increase the numbers of people that it provides aid for. Many business offer bonuses to employees who reach targets and have a reward system for the highest sales or income generated. T- Time specific – they have a time limit of when the objective should be achieved, for example, to increase sales by 7% between the periods 3rd quarter to 2nd quarter 2008.   4.2 The company’s culture and valuesThe Nokia corporate philosophy culture is based on four values that are customer satisfaction, respect for the individual, achievement, and learning continuously.   These important values benefit both the members of individual staff and the integer of the company.  Customers satisfactionThe basic work of Nokia is to create customers satisfaction.   Nokia respects and concerns for customers.   Working in partnership is to satisfy their needs, and give them the best possible service.   The major work of the Nokia staff is to concern with the quality of their solutions, products and services.                                                   Respect for the individualThe strength of Nokia is that Nokia treats people as individuals whether they are employees, customers, or business partners.   In fact, this means that trust, openness, fairness, and acceptance.   Individuals have a responsibility and freedom to make independent decisions in Nokia. It enables the company to respond rapidly and to serve customers flexibly.   AchievementEmployees work to a solid strategy and well-defined business measures that can assist the employees in committing and inspiring in Nokia. Nokia’s leading position in the industry is based on individual courage, innovation, and a constant willingness to learn.   It is used throughout the whole company that everyone will strive to excel at their job and a mediocrity will never be accepted.                                              Continuous learningThe employees of Nokia are continuously looking for ways to develop themselves and improve their performance.   They are aware of the trap of complacency and strive to keep their minds wide.   They aim at staying in the forefront of technological development, and share their experiences, studying and training.   In addition, continuous learning means to collect new ideas and react quicker than others perform.                                                                                                                 TASK-35. Implementation of the strategyImplementation is the process that turns all the marketing strategies and plans into marketing actions in order to accomplish the strategic objective outlined above. Part of the implementation should therefore focus on the strategic goals and objectives (and values) as a basis of creating operational plans for the entire strategic planning and implementation. Resource allocationHuman ResourcesNokia puts a lot of trust in their employees. A high level of education and continuous learning are prerequisites for complex and demanding research work. Further studies are actively encouraged and rewarded. Nokia rewards employees for good performance, competence development, and for overall company success. Highly skilled colleagues at Nokia provide their employees with rich sources of experience and knowledge.   Nokia employees also have access to a wide variety of training activities, as well as management training and development of leadership skills. Since Nokia encourages their employees to work on their own, and develop their own plans, they are integrating thinking and doing, and not separating it. Compensation at Nokia is tailored for each country and typically consists of elements such as annual base salary, incentives, bonuses, possible stock options, flexible Work-Life balance solutions, and other local benefit.Financial managementThere are two units of Nokia production one is Nokia Technology it provide network three countries China, Finland, India and second is Mobile device and Enhancement provide it nine country Brazil, China, Finland, Great Britain, Hungry, India, Mexico, Romania and South Korea.During 2006, Nokia employee number grew to approximately 68,000 persons coming from 120 nationalities. Within Nokia workplace profile, women account for 34 percent of all employees, with 12.5 percent holding senior management positions. The average employee age is 35 years, with 5.1 percent of Nokia employees over 50 years. Nokia Emploment cost consists of elements such as annual base salary, incentives, bonuses, possible stock options or performance shares, flexible Work-Life balance solutions, and other local benefits. In 2007, Nokia selling and marketing expenses were EUR 4380 million, up 32% from EUR 3314 million in 2006, reflecting selling and marketing spend in all business groups to support new product introductions and the higher levelof overall Nokia net sales.TechnologyNokia has joined with Hewlett Packard in technology; it has had a good reputation about computer programs for many years.   As a result of this, Nokia has a considerable opportunity to enlarge their market size into PC users who prefer mobile phones compatible with PC device (Merriden, 2001).   5.1 Action plan for the implementation For sales target Nokia continues to expect industry mobile device volumes in 2008 to grow approximately 10% from the approximately 1.14 billion units Nokia estimates for 2007.Nokia continues to expect very slight growth for the mobile and fixed infrastructure and related services market in euro terms in 2008.Nokia and Nokia Siemens Networks cost synergy target for Nokia Siemens Networks is to achieve substantially all of the EUR 2.0 billion of targeted annual cost synergies by the end of 2008.Production of cost The production cost of Nokia is getting lower than lower because of production volume and large sales. Therefore Nokia can sell their production in low price in the comparison of other company prices. Increase the availabilityThere are enough staffs in every working shift of Nokia. There are lots of store for the storing the delivery goods. Nokia product layouts in the shop are very visible which helps to customer easily get product from the shop. Nokia has got enough machinery and tools for the working places.Improving the Customer ServiceNokia staff is happy to help customer. They can make the profit by providing the goods in low prices with maximum satisfaction from the customers. They have good loyalty for the customers like returning goods, exchanging and by saying politely. 6. ConclusionAs a leading telecommunication in the global mobile phone market, Nokia’s success attributes to the next three factors.   First, strengths and opportunities of Nokia suggest that high quality, advanced technology, worldwide service, and continuous new product are the essential factors for Nokia’s product development.  Second, Nokia concerns on its enterprise culture.   In the company, the relationship between individuals is mutual trust, fair, and openness.   In order to improve employees’ techniques, Nokia makes courses to train its employees regularly.   This training may assist Nokia in achieving its higher goal.  Third, Nokia’s financial position shows, although the net sales decrease, Nokia still has a substantial profit margin.   Therefore, this report proves that enough assets can invest to launch more new products, which will offer more marketing opportunities for Nokia.  At the same time, Nokia meets some problems of mobile market, which have been explained in a Strength and Weakness. Hence, in the process of the Nokia way, the company should remind itself that the Nokia belongs to customers and considers on behalf of customers.   7. References             1.   Book References                     ■ Corporate Strategy by Richard Lynch   (FT Prentice Hall, Third Edition, 2003)          ■ Exploring Corporate Strategy by John G and Scholes K (Prentice Hall. 2003)          ■ Contemporary Strategy Analysis by Grant R (Blackwell, 2004)          ■ Meriden, Trevor (2001), “Business the Nokia Way”, October, published by Capstone Publishing Limited   2. Online References                                  www.nokia.com            www.nokia.com/press            www.nokia/A4942617            www.silicon.com/tags/market+phone.htm            www.ZDnet.co.uk            www.library.marketlineinfo.com/library            www.transnationale.org            www.ethishop.org/brands/nokia            www.marketwatch.com            www.authorstream.com            www.wikinvest.com/stock/nokia_(nok)            www.valuebasedmanagement.net/mehods_75.html            www.datamonitor.com            http://www.nokia.com/A4136001?newsid=1269882             http://www.thetimes100.co.uk8. Appendices         ■ WAP: Wireless Application Protocol, which estimated to grow to over 200 million users worldwide.         ■ GPRS: General Packet Radio Service can connect directly to data network just turn on, tune in, and download whenever users like.         ■ MMS: Multimedia messaging service is very similar to Short Message Service (SMS), or text messaging. It provides automatic, immediate delivery of personal multimedia messages from phone to phone or from phone to e-mail.     ■ Ovi: Nokia introduced Ovi, the company's new Internet services brand name. Ovi will enable people to easily access their existing social network, communities and content, as well as act as a gateway to Nokia service.    ■ Symbian: The Symbian OS platform provides a secure, reliable operating system for mobile information devices. Symbian will provide a stable platform for the telecommunications industry.     ■ GSM: The world's first genuine Global System for Mobile Communications call was made in Finland with equipment supplied by Nokia.         ■ Wireless LAN: The Nokia Wireless LAN solution provides an excellent way to extend the reach of local area networks (LANs). Wireless LAN access zones at airports, hotels and other public places also allow users to connect to their corporate network via the Internet, while the full range of security features offer users reliable access to network resources.