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The Rise and Fall of Nokia

PESTEL Analysis of NOKIA

Thank you for your attention!

NOKIA’s Strategy:

A new winning mobile eco system

in partnership with Microsoft,

developing growth markets,

investment in next-generation

disruptive-technologies,

focus on speed,

results as well as on accountability

Sources:

Political factors:

  • Lack of governmental support
  • Alliance with Microsoft
  • Both advantages and disadvantages for Nokia
  • Production facilities located all over the world

http://businesstech.co.za/news/mobile/16053/nokia-not-getting-finnish-government-bailout/

http://www.wired.com/2015/07/microsoft-takes-big-nokia-hit-ballmer-era-now/

http://www.androidauthority.com/eu-right-bring-antitrust-case-google-603007/

http://company.nokia.com/en/about-us/corporate-governance/nokia-code-of-conduct

http://networks.nokia.com/about-us/sustainability/environment

http://www.techrez.com/nokia-s-huge-blunder-not-making-an-android-phone/

http://www.cnet.com/news/5-blunders-that-put-nokia-in-the-hot-seat/

http://www.gotabout.info/swot-analysis-of-nokia/

Juan Alcácer, Tarunk Khanna, Christine Snively: The Rise an Fall of Nokia. in Harvard Business School.

SOLUTION

Evolution of Nokia

Solution & Framework

Economic Factors:

  • Economic crisis in Europe
  • Limited buying power in home markets
  • Difficulties in establishing in Chinese market
  • Lack of economic resources and R&D capabilities

Propose strategies for the company based on the strategic thrust framework

Sociocultural Factors:

  • Failures during adoption of smartphones
  • Microsoft Windows phone:

not as appealing as Android

  • Customers focus on Apple

and Samsung

  • Focus on health issues
  • Support the WHO
  • Environmentally sustainable

business

  • Nokia Code of Conduct

Table of Content

Technological Factors:

  • Mobile phones-> handheld computers
  • Nokia stuck with its operating system
  • Difficulty of reaching young customers
  • Partnership with Microsoft brings technological advantages
  • Evolution of Nokia
  • Rise of Nokia
  • Fall of Nokia
  • PESTEL Analysis
  • SWOT Analysis
  • Solutions
  • References

Market penetration - existing customers may become more loyal (brand-switch less often)and new customers in the same market may enter; tactic to increase the use of product

Product development - improving present products or developing new ones for current market; form of brand extensions

Market development - current products sold in new markets, new geographic markets

Enter new markets - most risky strategy but may be necessary when a company’s current products and markets offer few prospects for future growth

  • 19th century – pulp and paper manufacturer

  • Mid 20th century – merged with several companys

  • Headquarter – Espoo

  • 1990s – mobile phones

Strengths

SWOT Analysis of Nokia

  • Reputation
  • Experience- Expertise
  • Distribution network
  • Higher resell value

Introduction

Rise of Nokia

  • Kari Kairamo CEO – driving force

  • First wireless phones

  • 1982 – 1987 market value more than tribled to FIM €1.5 billion

  • Controlling 1/3 patents for GSM standards

  • 1992 first mass-produced digital phone

  • 1998 – 23% market share / 163 million units sold

  • 2007 release of the Apple Iphone

  • Pressure from IOS and Android
  • strength & weakness
  • opportunities & threats
  • strategy and situation
  • position of their business
  • business strategy
  • marketing, production, and sales

Opportunities

  • Growing mobile market-> Expanding the range of products and sizes
  • The demand of smartphones is growing
  • Microsoft-Nokia deal is a win-win

Fall of Nokia

Weaknesses

  • Slow reaction to competition
  • Low sensitivity to industrial changes
  • Poor designed smart phones
  • Low performance of smart phones
  • Poor after-all service
  • 2010 – CEO Stephan Elop

  • Burning oil platform (Symbian)

  • Windows Phone Software

  • September 2013 Microsoft Deal

Threats

  • Competitors (iPhone) are getting more and more popular
  • Big companies get the strength of Android (Samsung)
  • New entrants
  • Strong competition
  • Tough time, still reputable
  • Needs to overcome obstacles
  • Using the best available plans and strategies

Why did Nokia's market share sink suddenly?

How is Nokia trying to get back into mobile phone business?

PESTEL Analysis of Nokia

PESTEL Analysis of Nokia

Environmental Factors:

  • Environmental laws in China -> increase production costs
  • Increased costs for materials, for lithium for batteries
  • Environmentally friendly brand
  • Approved, tested, sustainable materials & lighter, recyclable packaging

Solutions:

  • Create a unique device to compete with iPhone
  • More stylish products - Redesigning products
  • Gaining customer’s attentions
  • Android operating system
  • Willingness to pay for good quality
  • Focus on the high end market
  • Invest in Research and Development
  • Customer Surveys

PESTEL Analysis of Nokia

Legal factors:

  • Protection of intellectual property

Nokia’s biggest mistakes:

  • Production of smartphones not at same time as Apple did
  • Saving partnership
  • Samsung, LG & Apple are preferred
  • Threat by the iPhone
  • Apple´s deal with AT&T
  • Ignoring of US market
  • Nokia sold its products directly to customers

Introduction

PESTEL

SWOT

References

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