NOKIA

STRATEGIC ANALYSIS- EXTERNAL AND INTERNAL

SUBMITTED BY-
Komal Pujara (271142)
Kritika Chawla (271143)
Kartik Narang (271179)
Ishani Pattnaik (271138)
Ankit Mittal (271128)
Arjun Liju (271129)
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INDEX

Contents
History of Nokia ............................................................................................................................. 2
EXTERNAL ANALYSIS FOR NOKIA .................................................................................. 3
Industry Analysis Using Porters 5 forces: .................................................................... 3
Competitors Analysis: ............................................................................................................ 6
Challenge That the Mobile Device Industry Needs to Solve ................................................ 6
Adjusting the Pace of Innovation ............................................................................................... 6
4 CORNER ANALYSIS:.......................................................................................................... 10
Vision 2020 ............................................................................................................................. 10
Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition ............................................... 12
INTERNAL ANALYSIS ........................................................................................................... 16
Key Value driving factor ..................................................................................................... 16
Value Chain Analysis of Nokia ......................................................................................... 20
The purpose of Strategic Human Resource Management activities of Nokia: ................................ 29
VRIO ANALYSIS ...................................................................................................................... 31
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A Finland multinational company, Nokia Corporation (Nokia) is one of the many companies
in today’s mobile industry. Nokia aims to provide a range of mobile devices which enable
people to enjoy their services and software in areas like entertainment, business purposes and
many more.

In 1865, Nokia was founded by by Fedrik Idestam with the business of cable, rubber and pulp
manufacturer. Today, the CEO of Nokia is Olli-Pekka Kallasvuo and the chairman is Jorma
Ollila.

Nokia is one of the worlds leading mobile phone provider operating in more than 150 countries
around the globe with more than 123,000 employees of which almost 30 percent is employed
for Research and Development in 16 countries. As of 2009, the global revenue for Nokia was
EUR 41 billion and the operating profit was 1.2 billion.

Its rapid growth in the 1990s coincided with a basal structural change of the Finnish economy
and industry which Nokia had played an important role. Despite being a leading multinational
company in Finland, Nokia plays an important role in the economic growth of Finland as it has
been one of the fastest growing companies in the whole of Europe.

History of Nokia

In 1865 when the demand for paper was strong, engineer Fredrik Idestam established a wood-
pulp mill started manufacturing paper in southern Finland near the banks of a river. This made
the company’s sales improved tremendously and Nokia expanded even faster. Nokia had first
exported paper to Russia followed by the United Kingdom and lastly, France. Nokia factory
then employed a large workforce and a small community grew around it.

Finnish Rubber Works, one of the manufacturer for Rubber goods was impressed with the
hydro-electrcity produced by the Nokia wood-pulp. They decided to merge and started selling
goods under the brand name, Nokia. After World War II, it acquired a major part of the Finnish
Cable Works shares. The Finnish Cable Works had expanded quickly due to the increasing
need for telegraph, telephone networks and power transmission. Gradually the ownership of
the Rubber Works and the Cable Works companies consolidated. In 1967, Nokia Group was
formed when all the 3 companies merged-up. The Electronics Department generated 3 percent
of the Group’s net sales and provided work for 460 people.

In the beginning of 1970, the telephone exchanges consisted of electro-mechanical analog

switches. Soon Nokia successfully developed the digital switch (Nokia DX 200) thereby
replacing the prior electro mechanical analog switch. The Nokia DX 200 was fixed and
improved with high-level computer language as well as Intel microprocessors which allowed
computer-controlled telephone exchanges to be the best and is the basis for Nokia’s network
infrastructure even till today.

In 1981, the introduction of mobile network enabled the Nokia production to invent the Nordic
Mobile Telephony(NMT), the world’s very first multinational cellular network. The NMT was
later on introduced in many other countries. Soon after, a digital mobile telephony, Global
System for Mobile Communication (GSM) was launched and Nokia started the development
of GSM phones. Beginning of 1990, there was an economic recession in Finland which made
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Nokia’s sale of GSM phones increased tremendously. This was the main reason for Nokia to
not only be one of the largest but also the most important companies in Finland. Based on
resources, Nokia supplied GSM systems to a total of 59 operators in 31 countries in August
1997. Improving successfully; Nokia also became a large television manufacturer and the
largest information technology company in the Nordic countries.

At a point of time, Nokia was a world leader in digital technologies, including multimedia
terminals, wireless data solutions, telecommunications networks and mobile phones but fell
dramatically and has risen up due to its internal strengths. The report presents an analysis of
the same.

EXTERNAL ANALYSIS FOR NOKIA

Industry Analysis Using Porters 5 forces:

Force 1: Threat of New Entrants

The threat of new entrants is low in the handset manufacturing industry, making
industry profitability high. Barriers to entry are high because of the costs of
technology, marketing, and research and development, as well as market control of
existing firms. The technological competency required to compete in this industry is
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expensive to obtain and increases daily. Costs of production such as equipment and
land are also high, making this industry difficult to enter.
Among the companies that spend the most on research and development are the
handset manufacturing companies Samsung and Nokia. These companies spent
roughly $7-9 billion on research and development in 2011 alone (The Economist,
October 2012). The top five firms in the industry have approximately 56.1% of the
market share (see Table 1). Only firms that are truly innovative are able to survive in
this market.

Force 2: Bargaining Power of Suppliers

The bargaining power of suppliers is moderately high. The factors behind this are:
importance of the market share of the firm, the large number of component suppliers,
and few software suppliers for smartphones. Firms with a large market share have
negotiation power with component suppliers, but software suppliers have power
especially in the smartphone market.
Larger firms with more control of the market are able to choose suppliers more freely
(see Table 1). In addition to that, there are many suppliers of the components of
handsets. In the smartphone subsector, there are few software suppliers like Google
(Android), Microsoft, and Apple that have power to control prices of their software
(see Table 2). Therefore, profitability in the industry is moderate when this force is
taken into account.

Force 3: Bargaining Power of Buyers

Buyers have a lot of power in this industry due to the large number of similar handset
devices available and the restrictions of a cell phone plan for that device. Buyers will
try to find the best value for their money, and with a large number of devices that can
perform the functions they want, buyers have power to bargain.
The other factor as to why this force is high is that cell phone service companies
attach large fees to switching plans or changing phones. This limits the amount of
phones the buyers are willing to pay for, and lowers the demand for phones until
phone plans expire or upgrades are necessary. Industry profitability is reduced by this
force.

Force 4: Threat of Substitutes

With limited substitutes available and the increasing convenience of phones and
smartphones, the threat of substitutes is low. Only recently have tablet PCs and small,
portable laptops become available. The rate at which these technologies are
developing has been much slower than that of mobile devices.
The development of multifunctional handsets such as smartphones, have increased the
convenience of phones. Now people can have essentially a small computer in the palm
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of their hands. Phones have become a necessary tool for everyday life, and because of
that, this force is low.

Force 5: Threat of Rivalry among Existing Firms

This force significantly reduces industry profitability. The existing firms in this
market have intense rivalry between each other. Many of the existing firms have
patents on the innovations that they have developed, which causes patent disputes
among the firms. Just recently Samsung was sued by Apple for patent infringement
with the development of the new smartphone, the Samsung Galaxy SIII (Forbes,
August 2012).
These lawsuits inevitably happen because many smartphones have similar designs and
features. Therefore, there is high price competition for similar devices with the same
features. The large firms in this industry have a large amount of rivalry, which makes
this threat very high and lowers industry profitability.

Tables
Table 1: Sales and Market Shares
Company First Quarter First Quarter First Quarter First Quarter
2012 2012 Market 2011 Units 2011 Market
Units Share (%) Share (%)
Samsung 86,567,600 20.7% 68,782,000 16.1%
Nokia 83,162,500 19.8% 107,556,100 25.1%
Apple 33,120,500 7.9% 16,883,200 3.9%
ZTE 17,439,300 4.2% 10,788,700 2.5%
LG 14,720,400 3.5% 23,997,200 5.6%
Huawei 10,796,100 2.6% 7,002,900 1.6%
Device
RIM 9,939,300 2.4% 13,004,000 3.0%
Motorola 8,368,200 2.0% 8,789,700 2.1%
Sony 7,898,400 1.9% 7,919,400 1.9%
HTC 7,703,400 1.8% 9,313,500 2.2%
Others 139,392,600 33.3% 153,809,000 35.9%
Total 419,108,300 100% 427,845,700 100%
*From Gartner, May 2012
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Table 2: Operating System Sales and Market Share

Operating System First First First First
Quarter Quarter Quarter Quarter
2012 Units 2012 2011 Units 2011
Market Market
Share (%) Share (%)
Android 81,067,400 56.1% 36,350,100 36.4%
iOS 33,120,500 22.9% 16,883,200 16.9%
Symbian 12,466,900 8.6% 27,598,500 27.7%
Research In Motion 9,939,300 6.9% 13,004,000 13.0%
Bada 3,842,200 2.7% 1,862,200 1.9%
Microsoft 2,712,500 1.9% 2,582,100 2.6%
Others 1,242,900 0.9% 1,495,000 1.5%
Total 144,391,700 100% 99,775,000 100%
*From Gartner, May 2012

Competitors Analysis:
Challenge That the Mobile Device
Industry Needs to Solve
Adjusting the Pace of Innovation

The emergence of smartphones in the mobile communication and manufacturing sector has
been characterized by the introduction of a series of changes in the technology that has been
both intangible –the operating system –and tangible –the hardware characteristics.
Smartphone manufacturers owe it to consumers to continuously innovate and create reliable
products. New features must aim to improve user experience, but must be robust enough not to
introduce vulnerabilities to security and privacy. The industry must also look into adopting
standards of technology and quality to ensure that customers enjoy an acceptable level of
quality, security and reliability.
Otherwise, the manufacturers may be exacerbating the issues that could lead to their own
downfall. Ultimately, developments must be oriented toward a sustainable and rewarding
symbiosis among stakeholders – users, manufacturers and intermediaries alike.
The mobile phone industry is a very innovative segment within the ICT sector and the
smartphone is becoming the standard configuration among the different types of mobile
devices. Technical change and new product proliferation have made this industry extremely
dynamic, even if market shares are highly concentrated in the hands of very few companies.
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Creating an opportunity out of the challenge: Success of

Apple
Apple has been evaluated as most innovative company from 2006 to 2008 because of the
development of different product such as iPhone, iMac and iPod. The production of music,
video, movie and electronic records helped Apple to gain valuable brand recognition as in 2008
it was recognized as 24th most valuable brand. The core competencies of Apple were its
innovative designs and technology based on software. The latest batch of Apple products
includes iPhones, iPad and iPod with more innovative features and colours. Apple offers a
complete range of its products to its customer. It is very dynamic in its nature as it is very
responsive to any changes from its competitors. In recent days Samsung is the biggest rival of
Apple in mobile technology but it is equally challenging Apple positively. Due to their
competition customers are getting the best quality products from both of them.
It has been observed that Apple has been emphasizing more on developing competencies not
limited to technology only. With this approach they were thriving to achieve extreme form of
technical development and in doing so customer orientation was also not ignored. Every effort
were made to developed their products based on differentiation which is initiated by the CEO
Spilinder tenure and then the pace was accelerated in Steve Job’s time in 1997. Technical
expertise of their concerned staff played a vital role that was able to take to an extreme end in
terms of product features, functions and specifications. This approach of developing
competencies remained an area utmost importance by Steve Job’s which helped to register
phenomenal in sales and profitability as well. Just due to competency the customer positioned
these products in their mind as ultimate unique in functions and no other competitor could
produce something closer to this. As Apple’s products are highly sophisticated that is why it is
exercising the skimming pricing policy and people do not mind opening their valets and buying
the unique feature products they are desperate for.
The products Apple offers in the market are more valuable for the customer as compared to its
prices due to the following reasons.

• Apple invests heavily in research and development to make its products different from
others.

• Attractive design and simple usage attract people towards Apple Products.

• All the Apple products are based on latest technology.

• Apple Knows when and where to market its products.

• Innovative and domain expert human resource.

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• When customer thinks about Apple the first things come in mind innovative and unique
design.

•Apple always utilizes the opportunity available in the IT Industry.

• iPhone, Store, iPod and iPad has been doing well in terms customer acceptance,
revenues and profits.

The key secret behind the success of any business is its Vision and Apple has the vision to
deliver the best quality product to its consumers. Apple makes some of the best products in the
market available today. The main idea is to create products for them who make them. The
engineers who are creating Apple products actually make them for themselves. And Jobs was
the chief “user” of Apple products when he was alive. With the guidance of Steve, Apple
became more confident in their products and hence that energy and vibes are ultimately
delivered to the consumers. Apple products are unique so it’s difficult for competitors to
imitate. Human resources are innovative and expert in different domain are rare in the market
and latest use of technology, powerful architecture, attractive design, latest software’s and easy
to use products are valuable and unique for the people.

Failure of NOKIA:
Nokia a mighty firm, well flourished and is known to be the best specifically for its hardware
and battery life. It was one of the leading mobile firms. It has a stand and prestige of its own.
The users were very satisfied with its services and hardware. Nokia was the name one used to
take in amongst the top other brands. Nokia failure is not just a single factor which is
responsible for its downfall instead there are many reasons for the downfall of Nokia.
 The mighty firm Nokia sold itself to the Microsoft. This raised many questions like – was
the firm incapable of managing the business or was it the Nokia management failure.
 Nokia was very slow to cope up with the prevailing trends like that of the touch screen,
sending of the emails and the importance of software with that of the hardware could be
some of the reasons of Nokia downfall.
 The emergence of Android which was accepted by the brands like Samsung, Sony, HTC
has gripped the roots of the market tight leading to the reason why Nokia lost market share.

Loosing on the innovation front:

Samsung has launched the Samsung android phones which were cost-effective and user-
friendly. When it was a phase going on to built for the touch-screen phones when the other
brands were busy in working on it. Nokia was in the mindset that the touch screen concept will
get failed and people will come back to the QWERTY keypad. But it was a huge misconception
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by the Nokia and Nokia fails in its assumptions, meanwhile, the company has taken the space
and users too liked the concept and rapidly switched to the touch-screen format.

Then after when Nokia made up to come back with the existing trend, its entrance was too late
via windows platform. The operating system of Samsung and Apple was much advanced as
compared to the Nokia’s Symbian OS. Nokia, however, was unable to get up these mighty
giants and was one of the reasons for the collapse of Nokia’s Symbian OS. These were the
reasons why Nokia failed in smartphones.

Nokia by the time has realized that they are far back to the mighty giants like that of Samsung,
Apple, Sony etc, they also failed to realize that they have lost their hold on the lower ends also.
For example, earlier the models of Nokia like 1100 was very popular.

Comparatively, when Nokia entered the new trend it failed in its lower end also of
manufacturing best model. After some time when it realized with the fact that it should focus
on the hardware point also, then it launched the Asha series. Unfortunately, was unable to
maintain a stand and it got swiped out of the market.

Loosing on the managerial front:

One of the reasons for the failure of Nokia is the incorrect deal of the Nokia with the Windows.
The time when Nokia mingled with the windows, windows was already running through the
declining phase and the thought of Nokia to regain the windows was not at all proved to be
fruitful. When the giants like Samsung was busy with the innovation factor, Nokia was the one
who entered late and was much behind in terms of functionalities and innovation. This was the
time when Samsung and Apple edged on the Nokia and spread the roots in the market.

Nokia’s marketing strategy was not up to the mark. First of all, the company was unable to
come up with the epic sets and have not been implemented the correct strategy of umbrella
branding. The customers trust was taken over by the other companies and the selling and
distribution management was not proper and also it became difficult for the customers to jump
back to Nokia, as through awesome innovations Samsung and others have already won the
hearts of the customers and people were unable to give the traditional concept phone a thought.

When Nokia decided to focus on its hardware fascinating strategy, it was already late and other
brands have too launched the models whose hardware and software both are tremendous.
Therefore it got beaten even in its marketing strategy. Hence, these were the reasons for Nokia
marketing strategy failure.

In short, Nokia gets failed firstly because of its own decision to get it sold to the Microsoft,
reflecting its image of incapability to manage its firm. Next its decisions which it took to not
to enter in an experiment of launching touch screens and eventually denying the concept of
smartphones which made it late and out of market and uprooted all its well-settled branches
and the giants like Samsung, Apple, Sony etc have filled the space with their hard work and
innovation which in turn diverted all the customers to the fantasy osf the wonders of the latest
technology.
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4 CORNER ANALYSIS:
Samsung
Motivator
Samsung follows a simple business philosophy: to devote its talent and technology to creating
superior products and services that contribute to a better global society. To achieve this,
Samsung sets a high value on its people and technologies.
On the Basis of Human Resources & Technologies

· Make the extension of human resource development and technical superiority with
management principles
· Increase the synergy effect of the whole management system through human resources and
technologies

Create the Best Products and Services

· Create the products and services that give customers the best satisfaction
· Retain the 1st position in the world in the same line of business

And Contribute to Society

· Contribute for common interests and a rich life

· Perform the mission statement by a member of the community

Vision 2020
"Inspire the World, Create the Future".
The Vision 2020 is at the core of their commitment to create a better world full of richer digital
experiences, through innovative technology and products.
The goal of the vision is to become a beloved brand, an innovative company, and an admired
company. For this, we dedicate our efforts to creativity and innovation, shared value with our
partners, and our great people.
We have delivered world best products and services through passion for innovation and optimal
operation.
We look forward to exploring new business areas such as healthcare and automotive
electronics, and continue our journey through history of innovation.
Samsung Electronics will welcome new challenges and opportunities with joy.

Assumptions
Strengths

 Samsung enjoys the widest range of product portfolio which includes Mobile phone,
Tablet, TV/Audio/Video, Camera, camcorder, Home appliance, pc, peripherals, printer,
memory cards and other accessories
 Samsung holds significant market share in most of the product categories
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 Samsung is NO.2 in terms of market share in mobiles, it captured Nokia’s market share
by superior innovation in smart phones
 Samsungs is the best in terms of design features and technology. It was the first to
introduced dual screen mobiles , 65k TFT/LCD colour phone, first phone with
polyphonic ringtones, phones with rotating lens, thinnest and lightest note pad etc
 Samsung enjoys the first mover advantage in terms of introducing advance features in
LCD, refrigerator, Air conditioner etc. It introduced the world’s smallest MP3 player and
India’s first 17” TFT-LCD-TV monitor.
 Samsung took advantage of the growing economy of Asian market by setting up
manufacturing plant in India there by reducing logistics and supply chain costs.
 Samsung brand value increased by 80% in past three years

Weakness

 Samsung Mobile launched a series of Smart phones recently which led to cannibalization
 The demand for LCD panels is expected to decline in the future
 Still Nokia is considered to be the most preferred product in India in terms of ease of
use, reliability and resale value
 Chinese products focus on economies of scale and dump into Indian market for lesser
cost. This results in reduction of sales
 Samsung is a hardware leader but has too much of dependence for software from other
parties.
 Online stores which sell a wide range of products are giving better deals as they don’t
incur cost in distribution channel

Opportunities recognised in industry

 Samsung is planning to make the air-condition product category more strong with unique
technology called ‘Triple protection proposition’
 Samsung is the India’s official ‘Olympic partner’ for the 2012 London Olympic and
recently launched ‘Olympic Ratna Program’. This will result enhance brand
awareness and increase the sales
 Samsung Mobile and Home appliance has future plans of launching Customized
products for Indian market. This will improve the market share in rural market
 The Indian youth population is growing and mobile phone sales is expected to increase
due to lesser call rates
 Its financial position is strong and there is a scope of entering into
unrelated diversification

Threats from environment

 Samsung has wide variety of product lines, failure of one product line will have impact
on the other and will result in brand dilution
 The competitors like Nokia are focussed only in one segment
 Since India is a potential market, entry of foreign players is likely high. Foreign players
like Haier have already started gaining market share in India in home appliances.
 Threats from Chinese products
 Retail Chains like Bigbazaar sell consumer electronics and home appliance in low
cost strategy which are procured in bulks from foreign market
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Capabilities

Dynamic Capabilities at Samsung: Optimizing Internal Co-opetition

When Apple’s iPhone became a global sensation in June 2007, Samsung was not a major player
in the smartphone industry. The iPhone shock hit Samsung hard. Few companies were prepared
for rapid adoption of smartphones. However, within three years, Samsung launched its first
Android-based smartphone, the Galaxy S1. By the end of 2010, Samsung was selling as many
smartphones as Apple. And by 2013, it had become the leading smartphone manufacturer in
the world, with a 32% global market share. How did Samsung rebound so quickly? The key
was dynamic capabilities. While existing research has emphasized cooperation among
organizational units in developing new products and technologies, the example of Samsung
demonstrates that competition among business units can also enhance a firm’s dynamic
capabilities.

The term “co-opetition,” inspired by game theory, was coined to describe the
relationship between two entities that are simultaneously involved in competition
and cooperation. Existing studies focus mostly on inter-firm co-opetition.
However, subunits of an organization can also engage in co-opetition. In
Samsung’s case, the co-opetition model applies to affiliate companies within a
diversified business group, as well as to business divisions within those affiliate
companies.

Internal competition can enhance organizational flexibility by forcing business

units to continuously improve performance, keeping them on their toes. It should
be noted that the co-opetition model can increase in-fighting among units, and has
the potential to jeopardize team spirit, ultimately wasting resources. As such,
effectively managing competition between units is essential.

Samsung Group Chairman Kun-Hee Lee suggested that the company’s highly
diversified business structure is the main source of its competitive advantage:

“Samsung Electronics is one of the few companies in the world that handles
components, digital products, home electronics, and communications businesses
under one roof. These divisions cooperate with and support each other.”

As a business group, Samsung’s complementary assets were useful in the

development of smartphones. The mobile phone division of Samsung Electronics
procures memory chips and mobile application processors from its semiconductor
counterpart within Samsung Electronics. At the same time, it purchases its display
panels, rechargeable batteries, and printed circuit boards from other Samsung
affiliates such as Samsung Display and Samsung Electro-Mechanics.
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When Samsung was developing its first smartphone, the Galaxy S1, affiliates
collaborated intensely to allow for a rapid launch -- about six months after
development began. This collaborative relationship allows Samsung’s mobile
phone division to incorporate the most recent developments in component
technology -- including state of the art semiconductors and the world’s first OLED
smartphone display panels. To promote this kind of voluntary cooperation,
Samsung held in-house technology forums and conferences to share technological
information throughout the group. R&D personnel, CEOs of all Samsung affiliates,
and core technology talent from across the Samsung Group were all in attendance.

But collaboration within Samsung Group is only part of the story. Internal co-opetition became
a core part of Samsung’s management philosophy when a broad transformation occurred in
1993. Since that time, Samsung has encouraged its components divisions and affiliates to raise
productivity by applying market principles to internal transactions. In line with this vision,
Samsung built a dual sourcing system, where it would purchase components both externally
and internally, and strongly encouraged component-making affiliates to sell their products
outside the group simultaneously. For example, Samsung’s mobile phone division procures
printed circuit boards from Samsung Electro-Mechanics and other external vendors. In 2004,
it sourced 70% of its boards from Samsung Electro-Mechanics. These days, it procures more
than 50% from external vendors. In addition to dual sourcing, Samsung Group relies
on parallel development to ensure that there is a competitive market once a strategic option has
been isolated -- competing internal groups will seek to develop the best implementation of a
technology. The superior implementation is chosen, and members of competing groups are
integrated into the winning unit to speed up the development of the most viable
implementation.

Value chain analysis

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INTERNAL ANALYSIS
Key Value driving factor

Key activities performed by Nokia to bring in new business

• Introduced attractive feature phones with its signature long battery life
• With its brand value still intact adoption of Android worked well for Nokia in
smartphones
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• To regain its position in market Nokia enhanced offline distribution reach across the
country

Nokia Value Proposition

● For this we are considering the mobile manufacturing division of Nokia
● Nokia was the market leader in mobile phones for quite a long time
● The reason for their downfall can be attributed to their non existent value Proposition
● With the advent of major changes in the mobile phone industry with the launch of the
iPhone and other android devices newer and stronger competitors with strong value
propositions were cropping up
● For example, Apple iPhones were considered as premium devices with extra value and
functionality if you already had a Mac
● Samsung’s Android devices were considered as more versatile and user friendly when
compared to the iPhones
● Now considering Nokia, they had no feasible value proposition so as to make
consumers buy their products
● They tried to bring in some value by launching phones with superior camera but the
increase in perceived value of that to the customer were not big enough to make them
buy a Nokia devices over its competitors

Major stakeholders of NOKIA

Stakeholders are those who have an interest in the organization’s activities and are affected by
the events and judgment, actions and decisions of the company. These peoples have interest in
the organization and extensively affected by the activities of the organization. The company
should consider the interest of the stakeholders, what they want, there choices, how they can
be facilitated etc. for effective implementation of the change the company should discuss the
factors of the change and about the implementation of the change with the stakeholders. Obtain
suggestions and decide accordingly. In deciding about the change the organization should take
into consideration both the factors and the suggestions of the stakeholders.
NOKIA recognises the fact that they have a duty to act responsibly to their stakeholders.
NOKIA defines their stakeholders as the people and groups that are affected by their business
activities.
Thus the major stakeholders for NOKIA are:-
1. NOKIA employees
2. Customers
3. Investors
4. The community in which they operate
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How NOKIA creates value it's stakeholders

Customers
Nokia believes in basing all their strategies and actions on creating customer satisfaction.
This can not only be added in the quality of their products but also on their approach to various
environmental, social and ethical issues.
Nokia has also designed various services designed to support and assist customers in
understanding and using NOKIA products.
The Nokia accessibility team actively researches the varied needs of customers with limitations
in vision, hearing, speech, mobility, and cognition. This happens by including the disabled
community in product studies as well as design and focus studies on usability.

Employees
Nokia's corporate culture ensures that working at NOKIA is an experience which has a positive
impact on the lives of all its employees. NOKIA seeks to do this by offering its employees
education, training, and development programs, rewarding good performance, and ensuring
that the Nokia business culture is one that values openness and appreciates diversity.
Further, NOKIA implemented a number of different schemes and initiatives to help improve
its working environment and overall culture. They have also undertaken internal labor
condition assessments, conducted employee surveys, and designed specific employment
guidelines in order to make NOKIA a better place to work.

Investors
NOKIA has recognised the growing importance of sound and ethical business practices to both
mainstream and socially responsible institutional investors.
Hence, they have actively participated in third-party evaluations of its performance in areas
relevant to such investors.
The subjects that are most important to the investors are supply-chain management,
environmental impact, societal contribution, and corporate governance. Hence NOKIA has
taken numerous steps and conducted various programmes to strengthen all such aspects of their
company.

The community
NOKIA brings value to the community in which they operate with they help of numerous
corporate social responsibility projects that they are involved in. They also provide
employment to the people of the community thus increasing their well being and adding value
to the community as a whole.
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Channel of promotion

Nokia tend to promote the new technologies and mobile devices they create using one
big advertising campaign that focuses on a singular technology instead of each
individual handset, so they can appeal to a lot of different markets with one campaign.

They are attempting to have an offer for everybody and play across all price points. So,
they do plan to go up and down the price points over a period.

They started with the ₹9,000-15,000 range as it is where 50-60 per cent of the market
is. So, they entered a segment where there is maximum opportunity.

However, they will deliver products based on strong design and craftsmanship, real-life
experience and pure Android (the operating system is more or less similar to how
Google has made it, with least modifications.).

But, they talk of consumer benefits and driving real-life experiences. To provide the consumer
what they need, and at a price at which company think the price-value equation is fair. Strategy
is not be based on what the competition does
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Value Chain Analysis of Nokia

PRIMARY ACTIVITIES
Nokia boost for inbound supply

Nokia has reported big improvements in the performance of the inbound supply chain
to its factory at Cluj in Romania from a pilot project run in collaboration with Agility.

The trial run over a period of two months on shipments from Hong Kong to the Cluj
factory produced double-digit cost savings on transport, 100 per cent on-time
performance, zero damage to goods and succeeded in halving total transit time.

Robert Srumf, director global logistics service provider management and inbound
logistics at Nokia, said: “As a world leader in our field, focus on innovation in our
supply chain has been of critical importance to us.”
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The benefits are delivered by systems that link Agility’s Hong Kong receiving centre to
Nokia’s factory in Cluj. The centre, named the Nokia Goods in Transit Centre, is a key
element in the process.

Automated on-line booking tools enable vendors to automate the release process, and
carton level inventory is confirmed, providing inbound visibility for production
planning.

Dedicated Nokia cargo space is secured through smart configuration of air carrier and
cargo, resulting in elimination of waste in the air cargo supply chain. The system
provides accurate and comprehensive cargo information to the Nokia factory in
Romania before the goods leave Hong Kong.

Since data on inventory is captured in advance, the factory can begin the receiving
process as soon as the shipment is airborne, saving significant time. Special handling
arrangements at the factory enable break-down of one large unit in less than an hour –
a substantial operational gain.

The service is now live and in full operation and is being expanded to include mainland
China.

“From both economic and ecological standpoints, this approach creates a double win
by decreasing cost as well as CO2 emission. Working closely together, we have brought
our supply chain onto a new level. Agility helped us create what we were looking for –
an efficient integrated supply chain solution – and very quickly too – with little elapsed
time between concept and implementation,” said Srumf.

Operations

Service Operations and Management is the industry’s most comprehensive solution for
delivering excellent mobile broadband service experiences.

Nokia’s new Service Operations and Management Solution combines customer insights
with operations to close the gap between network and service experience. Operators can
now manage the service lifecycle and tackle service degradations before customers
experience bad service.

The solution encompasses the strategy, design, modeling, configuration, activation,

problem and quality management, assurance and profitability management of services.

The Service Operations and Management Solution helps service operations to link and
understand the customer impact in realtime for each service problem they detect.
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The solution is being delivered today and is showcased by a new Service Management
Capability Center (SMCC) in India, which is ready to serve customers throughout the
world and acts as our center of competence for service operations and management. The
SMCC builds upon Nokia Networks’ global delivery capabilities that include integrated
Global Service Delivery and Global Network Operations Centers that provide real-time
network performance for more than 250 million customers.

The business benefits improved operational efficiency for services: for example a UK
operator achieved 57% reduction in service quality related customer complaints
Faster time to market: for example, a mobile operator in Europe reported 70% decrease
in time-to-market
Enhance service revenue: for example, an APAC operator minimized service downtime
and avoided revenue loss of >2million euros / yr

Why Nokia Networks?

This Service Operations and Management solution combines: Extensive intelligence
from our CEM software Carrier-grade system integration and solutions capabilities
Strong operations experience and expertise derived from our existing Managed Services
activities It is a unique combination within the industry in service quality and
experience; it makes the most of our strengths in tools, processes and people.

In addition, Service Operations and Management is ready for delivery from world’s
first, vendor-operated Service Management Capability Centre in Noida, India, which
has already begun proof of concept work with customers around the world.

They are managing networks that carry over 550m Subscribers at over 100 operators in
multi-vendor environments– a unique capability that operators can leverage right away.

Marketing Strategy

HMD Global was formed by former Finnish Nokia employees with the sole purpose of
bringing the brand back to the mobile phone market. That includes CMO Pekka Rantala,
who previously worked at Nokia for 17 years, latterly as SVP of global marketing,
before joining Angry Birds creator Rovio as CEO.

Speaking to Marketing Week, Rantala has all the giddy excitement of someone who
believes his bosses may just have pulled off the bargain of the century.

“We were given a once in a lifetime opportunity to revive one of the greatest consumer
brands of all time,” he says. “It’s a 152-year-old brand that’s loved across the world.
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And that love isn’t just about nostalgia either – some of the biggest demand we’re seeing
for new Nokia smartphones is coming from millennials who want an alternative!”

Moving beyond nostalgia

There’s no doubting Rantala when it comes to Nokia’s brand awareness. According to
YouGov Brand Index, Nokia (with a score of 93) has more brand awareness among UK
consumers than the iPhone (on 92.3).

But when you switch this scoring to quality, the stats paint a very difference picture.
Over the last six months, Nokia’s quality perceptions have fallen 2.1 points to just 15.4.
Samsung and Apple, which occupy the top two spots, have a combined quality score of
72.5 points.

HMD recently launched the first flagship Nokia device since the deal: the £600 Nokia
8 smartphone. It received positive views from critics, who praised the Android-powered
device as a “step in the right direction”. But with Samsung and Apple so far ahead of
the pack in terms of sales and market share, and pretty much every handset player
struggling to make money out of the smartphone market, does Nokia even stand a
chance?

“We’re ready to become one of the leading players,” replies a bullish Rantala. “Yes,
there are certain things we can and will leverage from Nokia’s history, but we’re not
planning a nostalgia trip, or a history lesson this time around. We’re providing
something entirely new.”

The marketing of the Nokia 8 certainly has a fresh feel. One of the phone’s headline
features is the ‘bothie’, something Nokia hopes can replace the selfie. Essentially, the
Nokia 8 simultaneously takes a photo of who is in-front of and behind the lens, which
brings another layer to live streaming, videos and photo-taking. Bothie, HMD hopes,
will soon enter the millennial vernacular.
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“The bothie gives us a rich possibility for storytelling and something that’s completely
different,” he says. “Just having the Nokia brand gives us license to be different. We
don’t want to join those smartphone players who just do boring campaigns. The people
are bored because marketing wise it is just more of the same right now from celebrity
endorsements to focusing on tech and spec.”

Service

The professional service portfolio gives you direct access to the innovation and quality
offered by network experts.

They can help you plan upgrades to your networks and services, bringing your
subscribers the highest data speeds and excellent connectivity.

One way to achieve this is through network planning and optimization. By maximizing
the potential of your multi cell, multi-layer, multi technology network, your subscribers
receive a great mobile experience, whether in a busy shopping mall or travelling by high
speed train.

Rolling out LTE, or need to maximize the value of LTE? Their full LTE service suite
will help you solve the issues, so you can deliver on LTE’s high expectations.

Experts work closely with you to make sure the latest product and software innovations
work smoothly on your network. System integration team knows our products best and
can integrate our Core Network, Customer Experience Management, Operations
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Support Systems (OSS) Security and Subscriber Data Management solutions. The result
is a supremely efficient end-to-end mobile broadband service.

Need to focus on managing your current operations while also developing new areas
and improving existing services?

They will help manage your network and service operations. You benefit from
experience of managing 750 million subscribers in their network and service operations.

Professional services experts put your subscribers centre stage, giving your revenue a
major boost.

Benefits:

 Boost accessibility, retainability and data speeds for smartphones users. 30

percent increase on average for accessibility and retainability, up to 300 percent
improvements with data speeds.
 Upgrade capacity to save 20 percent on OPEX and plan close to demand.
 Improve market share by 23.7 percent with managed operations and
optimization.
 Boost spectrum capacity by 50 percent
 Reduce customer complaints by 57 percent and fault detection time by 70 percent
 Reduce time to market for new services from six months to three weeks.

SUPPORTING ELEMENTS OF VALUE CHAIN

 Technology
Core innovation strengths within Nokia include speed of action, interconnection
between products and services and the strategic use of design. Over the past few years,
as margins have been three times those of its nearest competitors, the company has re-
emphasised the importance of design to place it literally at the heart of the organisation‚
Äôs operations. This has moved Nokia from being a feature-driven to a design-driven
manufacturer where, amongst others, ethnography is now a core capability linking
consumer behavior around new uses of digital media directly into the development
process.
Nokia‚ leadership in mobile devices has given it a solid platform upon which to
build a services business that expands outside the core. And here‚ Äôs the rub, while
Nokia has consolidated its traditional strengths of R&D and product design, the big
story in 2007 was its strategic shift into the multimedia services space.
Nokia created the N Series to deliver high-end multimedia phones. In addition,
its near-ubiquitous camera-phones have provided revenue opportunities from user-
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generated content. In support of the social networking trend, Nokia has formed alliances
with partners such as Yahoo to allow users to share photos using its Flickr service. 2006
saw the first tablet device with internet, not cellular connectivity, and the success of this
product has led to a next-generation of internet-only devices including webcams and
higher levels of VoIP.
By eliminating the SIM card and breaking the connection to the networks, Nokia
is using alliances with the likes of Google and Skype to offer more freedom of choice
direct to consumers. At the lower end of the market, Nokia is the leading brand in China
and India and is well positioned for further growth. It continues to lead on process
innovation to drive down cost and is opening its tenth factory in India with the capability
to turn out 20m phones a year.
Nokia‚ Äôs innovation roadmap weaves its software and services into a seamless
package. Smart acquisitions have increasingly played a considerable role in this. Seeing
that that location and content services provide major opportunities Nokia bought
Navteq, the leading provider of digital map information for over $8bn in cash.
Nokia expects that the truly mobile internet with multiple connectivity options
that enable faster access to music, video, TV and mobile navigation and massive
multiplayer gaming services will be a major factor in driving further growth. With
overall industry handset volumes growing, Nokia is in the strongest position of any
manufacturer. Add into this mix Nokia‚ Äôs acquisitions and partnerships that are
building new service portfolios and it is clear that this company continues to be the
leading source of innovation in the telecommunications
sector.

Business Scope
Nokia has four business groups to find the unique dynamics of each business.
1. Mobile offers a variety of highly competitive mobile phones for large market
segments, and develop mobile phones for all the important standards and market
segments in more than 130 countries. It is the responsibility of the main mobile phone
business Nokia, based on WCDMA, GSM, CDMA and TDMA. Mobile focuses on rich
features, the phone is targeted for global markets.
2. Multimedia brings mobile multimedia to customers in the form of advanced
mobile devices and applications. Its products have the features and functionality such
as imaging, games, music, media and a variety of interesting content, such as additional
mobile devices and innovative solutions.
3. Network always offer leading network infrastructure, technology and related
services, based on major wireless standards for mobile operators and service providers.
Focusing on GSM technology, group-oriented leadership in radio networks GSM,
EDGE and WCDMA. Our network has been installed on most of the global markets
that have adopted this standard. Network is also a leader provider of broadband access
and TETRA network for professional users in the public safety and security sector.
4. Enterprise Solutions provides a variety of terminals and seamless mobile
connectivity solutions on mobility architecture end-to-end, specifically to help
businesses and institutions worldwide improve their performance through improved
mobility. End-to-end offering a variety of mobile devices that is optimized for business
on the front end, to the gateway portfolio that is optimized for mobile business on the
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back end include: wireless email and internet, application mobility, message protection,
virtual private networks, firewalls, and protection from interference.

 PROCUREMENT
Environmental Management
Environmental management system
Supplier shall have an environmental management system (EMS) ensuring effective
planning, operation and control of environmental aspects. The EMS shall satisfy the
requirements of ISO14001 or other internationally recognized standards. Supplier shall
be well-informed about environmental legislation and applicable regulations and be
able to provide evidence of compliance. The EMS shall include a continuous
improvement program.
Environmental certification
Supplier’s EMS shall be certified by third party as compliant with ISO14001 or Eco-
Management and Audit Scheme. (EMAS)
Raw material content data management
Supplier shall comply with material restrictions, set by applicable law and Nokia, and
continuously maintain records of full raw material content data (materials, substances
and compounds) of products supplied to Nokia or of materials used in implementing
the services provided to Nokia. These records (including any updates) shall be provided
to Nokia in a format specified by Nokia. Suppliers shall comply with the special
requirements set by Nokia on traceability and storing of raw material data with regard
to “Conflict Minerals”.
Waste management
Supplier shall manage any waste generated from its operations or from products or
customer’s assets in its possession, or reaching end-of-life or being classified as waste
according to legal requirements and good environmental practices. Supplier shall
establish and maintain procedures ensuring compliance with its waste management
obligations. Supplier shall primarily investigate ways to reduce waste generation and
secondarily ways to promote reuse (of nonNokia-proprietary material) and recycling.
Nokia proprietary material must not be reused without prior consent from Nokia.
Supplier shall record information about waste management (i.e. how much and where
waste is reused, recycled, energy recovered, sent to landfill etc) and provide this
information to Nokia on request.
Air pollutants
Supplier shall identify, minimize, monitor, control and treat all hazardous air pollutants
and all emissions should be avoided in accordance with international standards and
applicable laws.
Energy Efficiency
Suppliers shall identify the sources of direct and indirect accumulated greenhouse gas
(GHG) emissions and define the boundaries (scope of their responsibility). Supplier
shall measure, record and report on its significant GHG emissions and shall implement
optimized measures to progressively reduce and minimize GHG emissions within its
control. Supplier shall communicate its level of emissions and reduction targets to
Nokia on request.
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Programs for improving environmental performance

Supplier shall identify and measure the environmental consequences and impacts of its
operations and products / services and run continuous improvement programs to address
these impacts. These programs shall promote efficient use of energy, water
conservation, use and access to water; efficiency in the use of materials, elimination of
its impacts on biodiversity, avoid use of hazardous materials, promote waste
minimization and improve treatment and control of waste emissions affecting air, water
and soil. Supplier shall be able to provide supporting evidence.
Supplier management & purchasing
Nokia Networks expects suppliers to have a supplier base strategy and supplier base
management for their suppliers (vendors, subcontractors, service providers, partners,
etc. – sub-suppliers from Nokia Networks’ point of view).
A supplier shall identify, evaluate and select its sub-suppliers according to a
documented procedure. Selection criteria shall be aligned with the Nokia Networks
Supplier Requirements (including environmental and labor condition requirements).
Supplier shall have purchase and/or service agreements as well as valid Non-Disclosure
Agreements (NDAs) in place with all its sub- supplies, service providers and partners.
Any such NDA(s) shall be aligned with supplier’s NDA(s) with Nokia.
As a part of Supplier Requirements to the sub-suppliers, a supplier shall also set
environmental and labor condition requirements (e.g., occupational health and safety,
ethical conduct) for its sub-suppliers, including waste handling/recycling sub-suppliers.
They need to evaluate subsupplier performance and set improvement targets. The
requirements shall be aligned with Nokia Networks supplier requirements. If a sub-
supplier is used for waste disposal, the Nokia Networks supplier shall ensure the
subsupplier is appropriately authorized and licensed.
Conflict Minerals due diligence
Suppliers who manufacture components, parts, or products containing tin, tantalum,
tungsten, and/or gold shall define, implement and communicate to sub-suppliers their
own Conflict Mineral Policy, outlining their commitment to responsible sourcing and
legal compliance and measures for implementation. (See section 1.5). Suppliers shall
work with sub-suppliers to ensure traceability of these metals at least to smelter level.
Traceability data shall be maintained and recorded for 5 years and provided to Nokia
upon request. Once such mechanisms are available, suppliers shall ensure that
purchased metals originate from smelters validated by Suppliers as being conflict
mineral free.
Suppliers are encouraged to support industry efforts to enhance traceability and
responsible practices in global minerals supply chains.

 HUMAN RESOURSE MANAGEMENT AT NOKIA

Strategic human resource management emphases on human resource programme of
Nokia that has long term objectives. It is focusing on internal human resource issues as
well as on addressing and solving problems that effect management programs in the
long term. so the main goal of strategic human resources is to boost employee
productivity by focusing on business resistance that take place outside of human
resources.
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SHRM of Nokia employs strategies that help to develop the business’ performance of
Nokia and help an environment of modernism and flexibility among employees. The
main actions of Head of SHRM Juha Akras are to identify key HR areas where strategies
can be implemented in the long run of progress the overall employee motivation and
productivity.

SHRM also describe about the company’s internal strengths and weaknesses. This is
very important as the strengths and weaknesses of a company’s human resources that
have a straight effect on the company’s future.

The purpose of Strategic Human Resource Management activities of Nokia:

SHRM has a unique purpose to meet the company’s objectives. Different company has
different strategy and SHRM plays a role to identify the overall need for the company
to achieve the company goal. The SHRM activities are as follows for Nokia and it has
a great purpose for company’s future:

 Resource planning: Resources are very important and should be available to

meet both current and future business needs according to company strategy.
Nokia Resource planning conducted at both organizational/ global and unit /local
levels which is done by SHRM of Nokia. Particularly, talented workers or real
apprenticeship schemes must be used.
 Workforce planning and recruiting: Workforce planning is the development
of assessing a company’s current and future human resources needs. Workforce
planning also includes managing any training and recruitment process to make
sure the organisation has the exact staff inexact place. Nokia work force planning
has a great purpose to properly express one way to make a workforce receptive
to cross functional, Cross-cultural teaming that can therefore make fast, high-
quality decisions and increase the organization’s flexibility.
 Performance management: Nokia SHRM has a system to run employee
performance. It ensures individual objectives are copied from company strategy
and policies. This is for motivate Nokia’s employee.
 Recruiting and exit procedures: Nokia SHRM makes sure that competent and
eligible individuals are recruited and appointed to open positions, according to
competence, with equal opportunity and on a voluntary basis. The supplier of
Nokia check the eligibility of candidates and that they exceed the minimum legal
age of employment. SHRM provided with a work contract or offer letter, basic
or specific training. SHRM shall ensure that exit procedures are acquiescent with
local legislation, international labour law and appropriate collective agreements.
 Nokia specific training and certification: Nokia SHRM has the necessary
training on Nokia policies, products, processes and guidelines and, if needed,
have necessary licenses and certificates to learn the social process of engaging
multicultural, multi-country employees in generating and agreeing on a set of
values and to search and get deeper considerate of the relationships between
strategy, culture, values and business outcomes.
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Contribution of Strategic Human Resource Management to the achievement of

Nokia’s organizational objectives.

To continue a strong, booming and efficient environment Nokia collaborates with its
employees under the main goal to create an environment for all its employees where
they can fulfil their potential. Motivation, encouragement and maintaining employee’s
satisfaction and well-being at work is vital for Nokia to perform at its best.

Company growth: Nokia expands their business in regularly basis with new
innovations and ideas. That is why Nokia needs lot of skill and experienced persons to
meet their business growth. For example Nokia’s Research & Development operations
were scattered across the world in 69 sites, and its 19,579 engineers, designers and
sociologists were given complete freedom to operate and develop their own ideas, over
and above their officially designated research projects. In these situations Human
Resource played a vital role. It recruits them and trained them in specific way to success
in this project. Nokia is operating their business all over the world and so the human
resource providing a socio cultural environment to its employee relationship and
workplace.

Profit increasing: Every company is profit oriented. They want to increase their profit
in every aspect. Nokia also increasing profit very successfully by making new ideas
implementations. Human resource has a effective involve to increase their profit by
reducing labour cost and other activities. Human resources is the organization of
resources other than natural resources and capital resources.

Satisfaction of Stakeholders: Human Resource of Nokia always try to satisfy its

Stakeholders like its employees, investors, suppliers and others. It has an employee
satisfaction program based on employee opinion surveys and should take action based
on the results of the program. It makes sure that information related to employees such
as business activities, changes and results is communicated across the organization and
ensure performance is evaluated fairly and independently.HR of Nokia provide to
Supplier services at Nokia facilities, including (Nokia’s) customer sites.

 FIRM INFRASTRUCTURE

Nokia Networks (formerly Nokia Solutions and Networks (NSN) and Nokia Siemens
Networks (NSN) is a multinational data networking and telecommunications
equipment company headquartered in Espoo, Finland, and wholly owned subsidiary
of Nokia Corporation. It started as a joint venture between Nokia of Finland
and Siemens of Germany known as Nokia Siemens Networks. Nokia Networks has
operations in around 120 countries. In 2013, Nokia acquired 100% of Nokia Networks,
buying all of Siemens' shares.[5] In April 2014, NSN name was phased out as part of
rebranding process.
Nokia has major manufacturing units in Sorocaba, Brazil; Oulu, Finland; Suzhou,
China; Chennai, India.
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VRIO ANALYSIS

RESOURCE 1

RESOURCE 2-

RESOURCE 3-
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RESOURCE 4-

RESOURCE 5-