SM PPT_Group No.3


Nokia : A stable player in Turbulent Industry

Presented by

Group No -03

Sapna Bangera - Roll No.04

Nikhil Jamnare - Roll No.19

Prasenjit Paul - Roll No.42

Nilesh Singh - Roll No.52

2007- Global market volume of mobile phone- 1.15 billion units

(16% increase from 2006)

3 billion users word wide

Prediction to reach $ 200 billion by 2011

Mobile phone industry grew- 50% growth from 1996 to 2000

Nokia- Finland based company -1990 as core business

Nokia became market leader in 1998

Nokia was ranked no.5 in 2007 in telecommunication by

Interbrand a leading brand consultancy

Nokia sold 437 Million handsets in 2007 – an increase of 26% from


Made net profit $10.5 billion on the net sale of 74.6 billion – 2007

Operated in more than 150 countries.

Joint venture with AT&T in US and with GSM in Asia and Europe

Market Strategy- Large Market Share and Economy of Scale

Came with cheap handset to attract immerging market- But faced problem in US and Europe

Introduced first smart phone Nokia 9000 in 1996

Nokia opened Concept Store which gave redefined retail experience.

In-house manufacturing- Vertically integrated.

In 2007- outsourcing around 20% of total volume.

Introduced Multisourcing model- different suppliers for different product level.

Nokia ranked 2 nd in 2008 for supply chain efficiency by AMR

10 manufacturing facility in 9 countries

Manufacturing facility in India- Chennai Plant which exported to

58 countries and became companies global operation centre

In 2007- Almost half of the 185 million handsets sold in India were from Nokia.

In 2006- For US market Nokia Introduced clamshell style phone

6555 exclusively for AT&T.

Nokia integrated various internet service under one brand OVI.

In 2007- restructuring business divisions- Mobile phone, multimedia, enterprise solution and Nokia Siemens division into two divisions- Mobile and Internet technology.

Launch of Fairphone, an ethically sourced and produced mobile phone, put a spotlight on the raw materials in our digital devices. The Dutch company, currently taking orders for a second batch of 35,000 phones, ensures that minerals come from conflict-free areas so they’re not helping to fund armed groups. And Intel is showcasing its commitment to using conflict-free minerals in its microprocessors, in a two-minute spot and on its website. CEO Brian Krzanich also spoke on the topic at

2014’s Consumer Electronics Show.

Why it’s interesting:

Expect more tech companies to start improving their track record on how their products are made.

Disruption in the payments sphere is opening the way for social media brands to act as intermediaries between consumers and their money.

Facebook is said to be planning a P2P payments feature for Messenger, South Korea’s KakaoTalk announced a

PayPal-like service, and Line is creating a mobile service that will let users make online and offline purchases.

Snapchat is partnering with Square to enable payments between users, as explained in an energetic retro musical number delivered by video. After users (U.S. and 18-plus only) enter bank card information, they simply send a cash amount within a text.

Xiaomi, which we is included in the 100 Things to Watch in

2014 list, is now the world’s third-largest smartphone maker. The young company has seen triple-digit yearover-year growth in smartphone shipments surging ahead of both LG and Lenovo.

Often described as the “Apple of China,” Xiaomi released its first phone just three years ago; its latest, Mi4, is an iPhone clone that runs on a modified version of Android.

The company is expanding beyond China into India and

Singapore, and planning to enter a slew of other growth markets, including Russia, Turkey, Brazil and Mexico.

It’s also getting into the content game and smart-home products.

Why it’s interesting:

◦ From luxury to technology, BRIC and emerging-market brands are increasingly hitting the global stage.

The startup Circle launched a web app that effectively functions as a bitcoin Bank.

Using a Debit card or a bank account, users transfer funds to Circle, which converts money to bitcoin at no fee.

Circle also insures this money at no cost

The company aims to make bitcoin more accessible via consumer friendly design and is aiming to take on traditional banks and companies like Pay Pal.

Advances in Smartphone cameras and the proliferation of mobile editing and recording apps are turning the mobile device into a portable studio capable of professional standard results


Why it’s interesting:

More than ever, the latest smartphones are allowing consumers to become content creators, and generators of entertainment and highquality visual media. And with their increased technical capabilities, they are taking over from traditional products such as SLR cameras

Walmart’s mobile app uses location as context for flipping into “store mode.”

Do you understand customer context well enough to help serve customers in their mobile moments? Are you engaging customers in the right moment to drive the next purchase or brand engagement?

Traditional marketing and customer feedback only tells part of the story. Are you tapping into customer mobile data to understand what they really think?

Are you collecting data from products to layer on services? Or give customers more control?

Are you using customer purchase data to improve conversion rates in-store and online?

Combine real-time analytics with push notifications to help deliver contextualized experiences.

Use data to understand when consumers are in their exact moment of need and to meet that need with the right message or service.

New mobile-centric ad formats will emerge.

More mobile ad network will shift to the exchanges.

Short videos (5 to 10 seconds) will make a greater impact on consumers, taking advantage of higher engagement levels with video on mobile. Shift the way you think about mobile advertising

Integrate mobile into your marketing strategy by taking advantage of mobile’s unique benefits.

Test new ad formats and compare their ability to meet your marketing goals.

Total product concept of Nokia and Mobile handset industry
















First Mover advantage

Technological leadership- (R&D)

Control of resources

Scale effect

Switching costs and buyer choice under uncertainty

Network externalities

Second-mover advantages

Free-rider effects

Resolution of technological or market uncertainty

Shifts in technology or customer needs

Government interference

Brands stop being the major driving force in consumer decision and low price becomes paramount. Due to this, differentiation has become a challenge for manufacturers.

Google’s strategy of providing open source Android platform free to mobile manufacturers has played a key role in the commoditization process.

Mobile manufacturers could therefore concentrate on hardware manufacturing and marketing.

Buyers from emerging markets like China and India are more price conscious than their Western counterparts since handsets are not subsidized by carriers in these markets.

Smartphone's are not only getting cheaper but they are getting better with each launch.

Established players like Apple and Samsung would have to innovate in order to keep the exclusivity of their phones in the face of such competition.

Looking ahead, it is vital for manufacturers to not only keep their costs in check and remain innovative, but also react quickly to the changes in the industry.

More importance of technology( Software) than hardware as decision making factor. Example- Apple

Value Chain Trends

Increased urbanization

Aging population

Increased spread of wealth

Increased impact of consumer technology adoption

Increase in consumer service demand

Increased importance of health and wealth being

Growing consumer concern about sustainability

Shifting of economic power

Scarcity of natural resources

Increase in regulatory pressure

Rapid adoption of supply chain technology capabilities

Impact of next generation information technology

Research and Development

Product Design

Production Process

Marketing and Sales

Distribution Management

Customer Service

• What is the best end-to-end value chain that meets business objectives of lowest total costs, utilization and customer service levels?

• What is the best sourcing, manufacturing and distribution strategy?

• What supply and capacity policies should be in place to ensure the required flexibility?

• What should be the inventory policy and positions at different nodes in the value chain?

• What is the carbon footprint of our existing or potential value chains?

• What if some of the underlying assumptions are modified - test of robustness?


Brand Awareness

Technology leader in manufacturing mobiles

Market leader

Presence across 150 countries


Huge loyal customer base

Huge presence in developing countries

Can use its infrastructure business(Nokia

Siemens Network) to reduce the bargaining power of mobile


Not good at software

Performance of symbion OS is lackluster

Increasing dissatisfaction level with its


Very weak market share in Smartphone


Rapidly changing industry

Chances of missing inflection point is high

Threat of entry of new players like

Microsoft, Google has just entered


• Segmentation----Expand total market -

Tapping new customers and increase frequency of use

• Acquisition and merger etc

• Defensive market share -Continuous innovation along with customer services and distribution effectiveness , customer service,

Product differentiation

• Economy of scale- Expanding market share

• Value chain management

• Technology advantage- R&D

Thank you