Nokia New Product Development Report

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Name – Akshay Chavan
College - Vidyalankar School of Business
Location – Wadala, Mumbai
A PROJECT REPORT ON
“NEW PRODUCT
DEVELOPMENT OF NOKIA
COMPANY REPORT”
SUBMITTED TO
ALL INDIA MANAGEMENT
ASSOCIATION
CENTRE FOR MANAGEMENT EDUCATION
MANAGEMENT HOUSE, 14 INSTITUTIONAL AREA, LODHI
ROAD, NEW DELHI-110003
CERTIFICATE OF ORIGINALITY

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This is to certify that the project titled “NEW
PRODUCT DEVELOPMENT OF NOKIA
COMPANY REPORT” is an original work of the
student and is being submitted by AKSHAY
CHAVAN in partial fulfillment for the award of the
xxx degree of ALL INDIA MANAGEMENT
ASSOCIATION. This report has not been submitted
earlier either to this University or to any other
University/Institution for the fulfillment of the
requirement of a course of study.
ACKNOWLEDGEMENT
In this project, I have made an honest and dedicated
attempt to make the Project Report so easy to
understand for a person who is willing to get
knowledge about the “NEW PRODUCT
DEVELOPMENT OF NOKIA COMPANY

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REPORT” I am deeply indebted to my lecturers &
my faculties who gave me opportunity of making
project report Mr. XXX for their kind support &
suggestion for making project report.
DECLARATION
I hereby declare that this project work titled “NEW
PRODUCT DEVELOPMENT OF NOKIA
COMPANY REPORT” is my original work and no
part of it has been submitted for any other degree
purpose or published in any other from till date.
TABLE OF CONTENT

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CHAPTER
NO.
TITLE PAGE
NO.
1 Introduction 22
2 Review of Literature 31
3 Research
Methodology
90
4 Data Analysis &
Interpretation
92
5 Conclusion 100
6 Suggestions 102
7 Reference 107

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LIST OF TABLES
Table 1 Process & Objectives
26
Table 2 Categories of Product & FDI Policy
29
Table 3 Marketing Strategy & Product line
Strategy 33
Table 4 Factors affecting on NPD
43
Table 5 Market Research & Market Mix
53
Table 6 Requirement of NPD
59
Table 7 Methods in NPD
62
Table 8 Conclusion & Reasons of Failure
80

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Table 9 Approach & Benefits of Nokia
82
Table 10 Key Success Factor
84
Table 11 SWOT Analysis
85
Table 12 Problems & Solution
89
Table 13 Employee
Response
98
Table 14
Questionnaire
105
LIST OF FIGURES
Figure 1 Product Line Strategy
40

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Figure 2 Nokia Worldwide Net Sales
55
Figure 3 Methods in NPD of
Nokia
63
Figure 4 Comparative Study of Nokia &
Sony
76
Figure 5 Pie Chart &
Graph
93
PREFACE
This report is on New Product Development
(NPD). The Various Process, Steps and
strategies are discussed. Then we have
concentrated on explaining about the methods
in New Product Development of NOKIA.

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The risk factor involved in NPD is studied in
depth.
We have also explained why NPD is essential for
an organization. The benefits and drawbacks of
NPD are explained so that the organization going
for NPD are aware of the consequences.
The knowledge about the methodology of NPD
helps us to understand the pricing methods in
NPD.
Advantages and disadvantages of going public
are discussed in this topic. This educates the
organizations to do their business in deciding the
efficient method which enables them to earn
maximum profit for the given constraints.
CHAPTER - 1

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Nokia is About Connecting people. It offers much more: mobile
devices and solutions for imaging, games, multimedia, mobile
network operators and Business. Headquarter is in Espoo,
Finland.
NPD for companies in today’s world is the only way of
survival in today’s increasing competition. The need of such new
product arises according to requirement of consumer & trends
prevailing in the society. Every company needs development of
more & newer product. But making a new product is not as easy
a job. It needs a detailed study about the product. If company
really wants that consumer to choose their product, they should
be specific about the characteristics and most beneficial service
that the product offers to their customer.
In this project, we will first talk about what Nokia is and
what they do, how they came to where they are today. Vision.
goals. and their strategy are discussed, as well as their wide
variety of products and services offered for the regular
consumer, businesses, and service providers. Nokia's success
benefits were some advantages they had in the market. These
also include the advance technology and features, as well as
services they offer to their consumers. However, like most other
companies. Nokia has some weaknesses. but we consider these
to be very minimal, and almost only come down to their
competition. Lastly. we Will talk about their informational
business model. This model includes Nokia's work organization,
control system, industrial relations, human resources, business
strategy, and finally, enterprise organization. We will look closely
at and discuss all of these elements, and why we think that they
are relevant to Nokia.
Mobile phone market in India is going through major
changes. Key players are losing market share while new and

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young companies, mostly from Asian countries, are coming to
the market. At the same time the market is slowly expanding
when people are buying more phones than ever. The whole
process of buying mobile phones has changed in the last few
years. People no longer carry the same phone year in year out;
change is the fast technological development of the phones. But
also, consumer's but they change their phone every year, some
even twice a year. One reason for these attitudes towards
mobile phones has changed. Mobile phones are no longer seen
as expensive, hi-tech products, but they have become
accessories like jewellery or a piece of clothing. "Nokia is still
the largest mobile phone company in the world, but its long-term
dominance is now challenged more than ever and emerging
markets."
Apart from providing handsets, Nokia also provides after
sales service, a channel for handset replacement and also mobile
accessories. The channel for all these services along with the
competitors in this line has been mentioned in this paper. This
report gives an overview on What is happening on the mobile
phone market today and analyses Nokia's market position in the
growing market. Finally, we try to make a conclusion of the topics
discussed and attempt to give some possible answers to the
question at hand.
All aggressive organizations strive to capitalize on their
potential and amass a large market share while retaining the
existing customers. Ideally, many firms opt to design new
product as a competitive tool. Thus, most innovative firms find it

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easier for them to outdo their rivals. Although innovation is vital
for success, the process adopted to develop new product has
bearing on the final product. Most organizations and firms use
varied processes in developing a new product.
The method used depends on the level of technology that is
available. When producing a simple product, a simple procedure
is adopted compared to the procedures used when developing
sophisticated products. This report will therefore compare the
process that is used by Nokia Company against the process that
was proposed by Crawford (1994). Crawford (1994)’s New
Product Development (NPD) process is perceived as a universal
one upon which other manufacturers derive their processes.
 INTRODUCTION OF NPD -
NEW PRODUCT DEVELOPMENT:-
o New product development is a task taken by the company
to introduce newer products in the market. Regularly there
will arise a need in the business for new product
development
o It is a process of taking a product or service from
conception to market
o Every product goes through a number of stages before
being introduced in the market
NPD OF NOKIA:- NOKIA, connecting people is a mobile
company which has a long history in designing for experience as
mobile phone are very personal & experiential device. The NPD
process in Nokia is a continuous cycle of field feedback &
development. They use & continuously develop method to
evaluate usability and user experience in the different phases of
development. After the product is released, they gather
feedback from the field via many controlled & uncontrolled
channels. This information can be used for improving the

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forthcoming product. Nokia have established processes to take
user needs & wants into account when designing new concept
and they do various types of evaluations with real user during
the development process. The user experience evaluation
practices in the different phases of Nokia product development
process are given below-
PROCESS OVERVIEW: – The process consists of two principal
strategies: user experience (UX) target setting and UX
improvement.
 User experience (UX) target setting – This process starts
by examining user needs and behaviours. They innovate
new concepts by reflecting user data with market insights &
technological opportunities. They start UX evaluations for
the concepts as early as possible and find out the pros &
cons of each concept so that development process will be
more effective.
 UX improvement – It is continuous process of identifying
problems, gaps & new idea. They do in all phases of the
development process by analysing the UX evaluation result
for concept being developed, field feedback for existing
products and competitive trends on the market. UX
improvement topics are then created and followed up via
systematic analysis & applied in the development. The
practical challenge is to link the available idea to right
development activities at the right time. UX improvement
process is, first of all is an UX management activity. They
apply conceptual analytical research & data gathering
techniques.
REQUIREMENT FOR UX EVALUATION:- In global company,
they need to make data collection from different parts of physical
& virtual worlds easy. Tens of Nokia products are coming out
every year & they want to evaluate also competitor’s products.
Second the theory behind UX evaluation needs to be applicable
for various types of product & prototypes. Third they do UX
evaluation in order to improve the products. They need to find

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out the pros & cons of the evaluated system. Finally, they want
to relate the project incentives to excellent user experience, not
only to technical quality. This would require a fair UX evaluation
process that produces some kind of a UX score. Fairness
means that all different types of products with different target
user group would be on the same line.
UX EVALUATION FOR CONCEPT IDEA: – UX target are set in
the very early phases of the development & then used as
guidance & evaluation criteria throughout the development. UX
targets are conclusion of several research activities, such as
user research, product feedback, market research & technology
analysis. They run individual interview and present narrative
visualization of the imagined user experience which provide an
opportunity to iterate it to make sure it fulfils real user behaviours
& needs.
UX EVALUATION FOR PROTOTYPES: – The in house UX
experts with a background in usability master a bunch of good
usability evaluation methods for different types of product
prototypes. It is beneficial to use this existing knowledge & just
include experiential aspects to the evaluations. Sometimes this
works, especially with long term field trials. In field trials they use
diaries, experience sampling, questionnaires & focus group to
collect experiential data.
UX EVALUATION FOR READY PRODUCT: – Nokia has been
developing & selling mobile devices for a relatively long time,
reached a large customer base. It is natural to look at the
continuous feedback from existing product & users and this
information when designing future product & experience.
Original UX target set in early phases can be reliable measured
when product and related services are completed and running.
This measurement can be done in various ways, such as
collecting feedback data using traditional market & user
research method & utilizing the latest technological & community
opportunities enable by interest. Combining several types of

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data & sources give them rich information to help improving user
experience of coming product.
Objectives
This report provides information on how Nokia develops its new
products. Therefore, the objectives of the report include;
 To understand the method used by Nokia in developing
new products.
 To evaluate the existing gaps between Nokia NPD process
and the Crawford (1994) process.
 To evaluate Constraints that influences an organisation’s
NPD procedures.
 To understand the adjustments that Nokia can employ to
improve its production.
 To understand the marketing and advertising strategies of
Nokia.
 To analyse the strategies and its effect on the corporate
profile of the company.
 To compare the strategies of Nokia with its competitors and
to analyse its strengths.
 To realize the role being played by advertising and
promotion on the change in sales volume of the company.
 To understand the future trends in advertising and
marketing in mobile handsets sector especially.
 To understand the international operations of the company.
Mission Statement
+ Customer — To maintain customer confidence by continuing to
provide quality service specifically designed to meet their
needs.
+ Market — To be recognised as a market innovator in the mobile
phone industry to continuing to improve our business practice.

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Business— To ensure the team has a complete understanding
of all Mobile Network Internal Systems and Procedures and that
each team member is responsible for compliance With the
Business Management System.
Training —To develop ongoing training strategies to empower
personnel with skill levels essential for future company
Success.
 The Team — To create the best possible working
environment, promoting career enhancement and job
security, encouraging trust in the company and loyalty to the
customer
The Six Categories of New Products -
Keeping these definitions in mind, there are six categories of
new products.
1. New-to-the-world products: these are innovative products
that create completely new markets. Recent examples
include digital music players, such as Apple’s iPod, that
have spawned new delivery methods (downloadable
music) and new media (pod casting). Other examples
include personal computers and the internet.
2. New product lines: these products are not new to the
marketplace but are usually new to the company.
Companies develop these products to enter an already
established market for the first time. Often these products
are similar to competitors’ products already available in the
market but with some level of difference. A good example
of a new product line is Microsoft’s entry into the video
gaming system market with their Xbox.
3. Additions to existing product lines (product line extensions):
these are usually new additions to the company, but they fit
under an existing line of products that the company makes.
This type of new product can be seen in Procter and

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Gamble’s Tide product line which contains many product
variations of the basic Tide product.
4. Product improvements: these products offer improved
quality, features or performance of an existing product.
They might also act as replacements of existing products.
Crest regularly promotes "new and improved" versions of
its toothpastes for which the fluoride formula has
undergone simple modifications.
5. Re-positioning: these are existing products targeted to new
markets, it involves introducing a new application for an
existing product that is aimed towards a new market
segment. Aspirin was re-positioned as blood thinner
although it was also used to relieve headaches.
6. Cost reductions: these products offer similar benefits at a
lower cost. They are not new products to the company from
the consumer point of view, but from design and production
standpoint, they usually represent significant change.
Always make sure to develop a clear definition of what “new
products” are in your organization, because this will prove
beneficial in determining your overall strategy, portfolio of
products and measuring the success of your new product
development efforts.
* Company can add new products by:
1. Acquisition -
• Company can buy other company.
• Can acquire patents from other companies.
• Buy license or franchise from other company.
2. New Product Development — developments of products
within the company
• Develop new product on its own.
• Contact independent researchers or new products
development firms to develop specific new product.

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CHAPTER- 2
REVIEW OF LITERATURE
Many academicians and scholars have suggested criteria,
which organizations should use to develop new products. The
process of developing a new product begins when a firm
identifies the need to generate a new product line to meet the
needs of the customers. Chesbrough (2003) asserts that all
firms operating in an open innovation paradigm are compelled to
always produce superior products compared to their rivals.
They do this to acquire or to maintain their market share. With
such aspirations, organizations devise ways and means to meet
the existing gaps by producing new products. Management in
most organizations bases their new product development
strategies on process described by Crawford (1994). Below is an
elaboration of the linkages existing between Nokia’s eight tier
models compared to Crawford (1994)’s five tier NPD processes.
Furthermore, consumer buying preferences can either be
approached by utilizing different choice models examined
empirically brand choice and store choice in regard to. The
research found that while neural networks have higher
probability Of resulting in a better performance, hybrid models
guaranteed equal or better results than stand-alone models.
FDI POLICY IN THE TELECOM SECTOR
Foreign Direct Investment (FDI) was permitted in the telecom
sector beginning with the telecom manufacturing segment in
1991 - when India embarked on economic liberalisation. FDI is
defined as investment made by non-residents in the equity capital
of a company. For the telecom sector, FDI includes investment
made by Non-Resident

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Indians (NRIS), Overseas Corporate Bodies (OCBS), foreign
entities, Foreign Institutional Investors (Fns), American
Depository Receipts (ADRs)/Global Depository Receipts (GDRs)
etc. present FDI policy for the Telecom sector:
 In Basic, Cellular Mobile, National Long Distance,
International Long Distance, Value Added Services and
Global Mobile personal Communications by Satellite, FDI is
limited to 49 percent (under automatic route) subject to grant
Of license from the Department Of Telecommunications and
adherence by the companies (who are investing and the
companies in which investment is being made) to the licence
conditions for foreign equity cap and lock-in period for
transfer and addition of equity and other licence provisions.
 Foreign Direct Investment up to 74 per cent permitted,
subject to licensing and security requirements for the
following:
 Internet Service (With gateways) - Infrastructure Providers
(Category Il)
 Radio paging Service
 FDI up to 100 per cent permitted in reflect to the following
telecom services:
 ISPs not providing gateways (both for satellite and
submarine cables)
 Infrastructure Providers providing dark fibre
 Electronic Mail
 Voice Mail
The above is subject to the following conditions:

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 FDI up to 100 per cent is allowed subject to the condition
that such companies would divest 26 per cent of their
equity in favour of Indian public within 5 years, if these
companies are listed in other parts of the world
 The above services would be subject to licensing and
security requirements, wherever required
 proposals for FDI beyond 49 per cent shall be considered
by Foreign Investment promotion Board (FIPB) on a case-
to-case basis
 In the manufacturing sector 100 per cent FDI is permitted
under the automatic route
 Marketing Strategy
Nokia’s Corporate responsibility strategy is to engage,
improve and be accountable. They constantly measure and
review their performance in economic, environmental and social
issues. They engage in stakeholder dialogue and form
partnerships that serve the areas they want to improve upon.
They pursue focused and practical improvement programs in
relevant organizational or geographical areas as part of business
operations - this involves business planning, internal
communications, training. They increase accountability to
stakeholders through reporting, and informative internal and
external communications activities.
What makes them unique is the way they do it. Based on the
same approach that guides the rest of their activity — ' The Nokia
Way' - their corporate responsibility is developed through logical
steps, with much of the work concentrated inside the company,
much of the work built on existing programs, and many stages
taken forward in parallel.
According to them it is essential to drive corporate responsibility
through the companywide strategy process. support issue

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owners in building business cases for ethical improvement and
implementation. and increase accountability to both internal and
extremal stakeholders.
For them, corporate responsibility is an integral and continuous
part of decision-making in all parts of their business; taking
responsibility for the consequence of their actions. It's a belief that
by focusing on issues over Which they have most influence and
Which their stakeholders consider important, they will be able to
mobilize more of company resources, be more proactive, and
ensure long-term programs.
The Nokia Strategy continues to focus on three activities to
expand mobile communications in terms of volume and value:
• Expand mobile voice
• Drive consumer multimedia
• Bring extended mobility to enterprises
Expand Mobile Voice
We believe that many opportunities for growth exist in the mobile
voice market, and we intend to continue to focus on this area. In
doing so, we aim to capitalize on Our demonstrated efficiency and
skill in execution and demand-supply chain management, and our
history of innovation. The markets on which we intend to focus
include markets with IOW' mobile subscription rates relative to
the size of the population. geographic areas where it is more cost-
effective to build wireless infrastructure than fixed-line networks,
and heavily populated areas, where factors such as poor housing
infrastructure or theft of materials tilt the scales in favour of
wireless solutions. We also intend to focus on markets where the
need for network capacity is growing as a result of mobile network
operators promoting the replacement of fixed networks with
wireless.

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Drive Consumer Mobile Multimedia
They intend to enter new product and service niches, which we
expect Will emerge as technologies from diverse industries start
to converge, especially in the area of consumer multimedia. Our
strategy is to explore, identify and extract revenue from the

most profitable and fastest growing segments of the consumer
multimedia business and its value chain by anticipating
consumer needs in this area, and developing innovative
products and services. In the near term, we intend to focus on
imaging and games, where we have already introduced a
number of products. Our strategy to drive Consumer multimedia
will also involves leverage of our strong position in the consumer
voice market.
Bring Extended Mobility to Enterprise
We intend to capture profitable segments of the corporate
market by offering products and services that Will benefit
companies and individual business people alike, including a
diverse handset range as well as security and mobile
connectivity solutions specifically tailored for enterprise needs.
As we do this, we intend to capitalize on companies' needs for
mobility and seamless mobile connectivity in their operations,
and also expect to collaborate with leading technology and
systems integration partners.
Business Objective
Nokia's business objective is to strengthen their position as a
leading Systems and products provider. Their strategic intent, as
the trusted brand, is to create personalized communication
technology that enables people to shape their own mobile world.
Nokia innovates technology to allow people to access Internet
applications, devices and services instantly, irrespective of time
and place. Achieving interoperability of network environments,
terminals and mobile services is a key part of their objective.
They intend to capitalize on their leadership role by continuing
to target and enter segments of the communications market that

they believe will experience rapid growth or grow faster than the
industry as a whole.
By expanding into these segments during the initial stages of
their development, Nokia has been established as one of the
world's leading players in wireless communications and
significantly influenced the way in which voice and other services
have been transferred to a wireless, mobile environment.
As demand for wireless access to an increasing range of
services accelerates, they plan to lead the development and
commercialisation of the higher capacity networks and systems
required to make wireless content more accessible and
rewarding to the end user. In the process. they plan to offer their
customers unprecedented choice, speed and value.
In addition, they will continue to be active in convergence. Nokia
has established alliances with other service providers in order to
make mobile access to services easier for the end user.
 Areas of Focus:
To achieve their business objective, their Strategy focuses on:
being the preferred provider of solutions for mobile
communications; creating personalized communication
technology; driving open mobile architecture enabling a non-
fragmented global mobile services market; strengthening and
leveraging Nokia, the trusted brand; and expanding our business
and market position on a global basis.
Mobile Communications - The aim is to position Nokia as the
preferred provider of products and solutions for mobile

communications by providing leading communications
networks that enable end-to-end service delivery for both
cellular and broadband networks. Illy develop leading high-
capacity cellular networks, platforms and user applications for
the mobile Internet. end-to-end broadband access solutions
and Professional Mobile Radio systems.
personalized technology - They want to strengthen their
leadership position in converging personal digital terminal
solutions. They build on their core competencies in various key
areas, including design and product innovations, brand
development, and effective demand/supply network
management. to bring new product concepts and associated
services to market.
Driving Open Mobile Architecture - Nokia's key commitment is
to create a global and open mobile software and services
market. They aim to achieve this through strong partnering
with customers. suppliers and industry participants, and solid
focus on end-to-end solutions in all their development
activities.
+ Strengthening the Brand - According to a variety of consumer
surveys, the Nokia brand is associated with well-designed,
high quality and technologically advanced products and
Customer services that are also user-friendly. Having invested
considerable resources in establishing the Nokia name as the
leading brand in mobile communications, they intend to
sustain and enhance the brand through aggressive

advertising, sponsorship and other marketing activities in all of
their principal markets. It's a that the leading market position
provides significant Opportunities for Nokia to better
understand and respond to the usage patterns of end users,
and thus enhance the Nokia brand.
Expanding The Business - For more than a decade, they have
actively expanded their business globally. As a result. the
network systems, equipment and wireless terminals are
produced and sold throughout the world. therefore, benefit
from Strong economies of scale throughout the organization.
Nokia's strategy is to continue focused pursuit of global
business Opportunities by cultivating a Strong local presence
in all growing markets and pursuing partnering and acquisition
opportunities in order to obtain complementary technologies
and market positions.
At Nokia, one of the top priorities is to continue to strengthen
their leading market position in a profitable way. They believe
that further market share gains are key to expanding the
customer base and developing the future business potential.
Their leading position also enhances the positive effects of
their economies of scale, which they believe should
strengthen their competitive position in the next generation of
mobile communications.
 STRATEGIC MANAGEMENT

This report outlines the mission statement, strategy and
purposes of Nokia. It analyses the impact of the external and
internal influences on the business strategies of Nokia. It also
emphasises the strengths, weaknesses, opportunities and
threats in context Of Nokia's operating and marketing activities.
Nokia has established its leadership in the mobile phone market
owing to its successful marketing strategies and internal
management. Nokia's philosophy is to learn continuously, to
satisfy customers and to respect individual and pursue
professionalism.
Product Line Strategy -
Starting since 1994, Nokia:
• Created global platform, GSM 900 platforms (2110,8110
and 6110)
- GSM 900 and 1800, primarily in Europe and Asia

- 1900 MHz and TDMA 800, primarily in US and South
America
- PDC (Personal Digital Cellular), primarily in Japan
• Introduces lots of product in a short time
• Emphasizes aesthetic design, user interface and software
features
• Use common designs across standards
• Concise Architecture-documents
 SECRETS TO NOKIA'S STRATEGIC SUCCESS
One can analyse the secrets behind how an enigmatic Finnish
Company got an edge over the US and Asian giants to triumph
as the global leader in mobile communications.
Bold Strategic Intent — While others debate and agonize
over first —mover strategies, Nokia rushes for new
opportunities and products. Growing up as a small Finnish
Company With few resources and no incumbent privileges,
Nokia is accustomed to moving swiftly and decisively to claim
its share of worldwide markets- from infrastructure to handsets
and software applications.
Innovation through Value Chain — Through technology,
innovation and Segmentation, branding and design, Nokia
makes innovation a top priority. Like Proctor & Gamble, it has
shrewdly filled the shelves with innovative new products to
dominate categories. Like Sony, it has used its umbrella brand
to sell new products and services and to create footholds in
new markets. Unlike its direct rivals (Motorola, Ericsson),
Nokia's innovation extends from technology innovation to
marketing activities.

Flat Organization — Prior to its worldwide expansion, Nokia
extended the use Of IT throughout the company. As it became
a process organization, it has shunned hierarchies and
bureaucracy. Even the senior executives have been rotated
from one work task to another. The organization chart looks
hierarchic but teams and networking reigns.
Entrepreneurial Spirit — Like the best Silicon start-ups,
Nokia encourages entrepreneurialism throughout the ranks
and views failure as a learning experience. Incentives,
rewards and lifelong learning permeate the entire company.
Humility is taken seriously at Nokia as in the technology
sector, the arrogant of today are considered losers of
tomorrow.
Collective leadership — Nokia relies on its executive board,
with each member bringing something unique
Global R & D Networks — Nokia's R&D efforts reflect
extensive collaboration with vital research institutions
worldwide. The company invests less in technology
development than its rivals, but often exploits new knowledge
more efficiently.
Through technology coalitions it has managed to internalize
new know-how while neutralizing competitive threats.
Competition and Co-operation — By managing its
corporate and government relations with diplomacy and
consideration. Nokia has been able to avoid high profile and
costly anti-trust actions and competition policy struggles.
Instead of trying to buy or crush potential rivals, Nokia works
to cooperate with suppliers, partners, clients, even direct
competitors.
Customer Focus — The most enduring factor is Nokia's
ability and willingness to listen to the customer —a fact
apparent in its strategy, structure and resource allocation and
also in its products and services. Due to its foresight, Nokia
can not only finger at the pulse of the market — it often knows

what the customer wants even if the customer is not yet aware
of this.
FACTORS AFFECTING ON NPD (New Product
Development): -
Nokia, is an international organisation which requires to focus on
macro environmental factors. Macro Environmental factors
comprise Political, Economic, Society and Technology, viz„
PEST Analysis. In view of the different culture and different
external factors between different countries, Nokia has to adjust
its strategic plan in order to develop international market.
 Political Factors
It is important of a company to acquire certain kind of policies
from its government, such as the economic policy, and science
and technology policy. Finnish policies assist Nokia to advance
its products.
The Finnish policies are the most important factors behind
Nokia's success. To operate efficiently, a modern knowledge-
and technology-based economy that is highly specialized,
internationalized and undergoing rapid structural change
requires active Support from the public sector. In its widest
sense industrial policy and science and technology (S&T) policy
comprise all those measures by which the public sector shapes
the operating environment for business and thus fosters public
welfare. Both policies pursued by Finnish government and the
Parliament are crucial for the development of both, the Finnish
Economy and of national information society.
General macroeconomic stability, low interest rates, stable
currency conditions and the international competitiveness of the
tax system fun the foundation for the growth of business and
improvement in employment. As the result of this, not only
Finnish Government but also international companies, such as
Nokia, have to play very important roles to develop their
information society and national technology strength.

 Economic Factors
According to the fact that Russian Federation was collapsed in
early 1990s and it clashed With Finnish economics. Nokia also
faced problems, and changed its functions from single market
and overall products to global market and focusing mobile phone
market.
During the first half of the year 2001, Nokia continued to perform
strongly in the global mobile communications market and was
able to strengthen its leading market position. However, the
general economic slowdown in the US has recently shown signs
of extending to other regions and to the wireless
telecommunications industry as a whole. The slowdown could
be a result of a general market deterioration - driven by
economic uncertainty, the ongoing technology transition and
less aggressive marketing by the Operators.
In a press release on June 12, 2001, it was quoted that 'Nokia
saw slower market growth affecting second quarter results and
was to take up actions to expand leadership While maintaining
strong profitability'.
Nokia will continue to take determined actions in all areas of the
business to align its operations with the changing market
conditions. Previously announced moves to increase the
company's efficiency and competitiveness include operational
changes to further enhance customer focus in Nokia Networks.
While market deterioration has had an inevitable impact on
Nokia's sales growth, their products have remained strong, their
market position has strengthened and they have been able to
find further efficiencies through tight control of their own
performance. Nokia has countered changing market conditions
by accelerating ongoing programs and generating eminencies
and cost savings. This, in combination with the current financial
health and proven performance, should enable them to exit the
current slowdown in a stronger position than before.
 International Factors

At Nokia, their whole business is based around communication
and connecting people. One of Nokia's aims is to make it as easy
as possible for their people to be satisfied working with them,
Thus, it keeps various stakeholders’ interests in mind.
Nokia develops products and services that encourage
communication and leaning among people and societies. They
are using their strengths connecting and communicating - to help
make a difference. It complements the core business and their
vision to be involved with the youth and education issues around
the world, preparing young people for their future. The goal is to
be a good corporate community member wherever they operate,
as a responsible and contributing member of society. Sharing in
the belief that prevention is better than cure, they take part in
long-term projects aimed at helping young people to create a
firm foundation for themselves and to find their place in the
world.
 `Technological Factors
In the 1980s. there was a trend towards microcomputers and
Nokia tried to match this tendency by producing its main
products as computers, monitors and TV sets. Due to the
changes in 1990s, Nokia also changed its functions to mobile
phone market.
Sustainable development and environmental protection have
various effects on the operation of the innovation system.
Innovation also creates new opportunities for promoting
sustainable development.
Nokia always improve their product line through Research and
development process, beside this Nokia also has multimedia
compatible improvement with mobile at the same time, such as,
GPRS and WAP Service. Nokia has numerous technologies
which can satisfy those end-users need, such as, Bluetooth,
Symbian, SYNCML, M2M, Wireless LAN and Java. Nokia
employed more than 7,000 people in department over fourteen
countries worldwide. They also provided customers to choose

the features and service that they personally want and need. It
means Nokia does not develop only their product line, but they
also improve their service process to provide the most
appropriate service to those customers efficiently.
The most quickly developing agglomeration of knowledge-
intensive activities in Finland is the ICT cluster formed by
information and communications sector companies. The cluster
includes a network of hundreds of small and medium-sized
companies as well as a rapidly growing operator and service
sector, but Nokia is clearly its core.
Nokia has grown to become a multi-national giant in a small
country. Its contribution to the Finnish economy is significant.
Nokia's exports alone are larger than that of the total paper
industry - the sector that previously dominated the economy.
Nokia is, of course, the major player in the ICT cluster. But it is
not alone. Altogether there are some 3000 small and medium-
sized companies in the cluster. Some 300 Of these are direct
first-tier suppliers to Nokia, known as the Nokia network. Nokia's
direct contribution to the Finnish economy can be summed up
as follows. The development Of GSM technology is
comparatively advanced, and telecommunication operators are
experienced with managing GSM services, therefore the
corresponding distribution channels are also relatively mature.
Different Types of Stores of Nokia in India
Nokia being the market leader in mobile phones, its way of
operating is usually different from its competitors. Nokia
operates according to its customer segmentations. Nokia motto
of connecting people and for this Nokia is spreading its wing in
every part of the country. Seeing the great opportunity in rural
India, Nokia is opening new stores there depending upon the
prospect of that area.

Generally, Nokia is operating four types of stores in India
depending upon the areas and the surroundings: -
1. Nokia Concept Store (NCS )
2. Nokia Priority Dealer (NPD)
3. Nokia solution point (NSP )
4. Nokia Shop-ln-Shop (SIS )
1. Nokia Concept store (NCS): - There are a total of nine Nokia
Concept Stores designed in the global formats across the
country. Nokia opened its first Concept Store in Bangalore,
which was
also, the country's first such Store in India. The aim was to
provide customers a complete experiential mobile experience.
The layout and design of the store follows the same pattern
as Nokia Concept Stores around the world to guarantee an
easy and informative shopping experience. With a simple to-
navigate setup, open doorways and low-glare lighting, the
store provides a relaxed and satisfying customer experience.
The idea is also to inspire and educate consumers on the
benefits of Nokia's latest products and technology through a
hands-on experience.
Nokia Concept Stores are designed to express Nokia brand
heritage. The aim is to reach Out to Our consumers with end-
to-end exposure On Nokia products and services all under
one roof.
They offerings at Concept Stores

Nokia Concept Stores also offer a complete portfolio of Nokia
mobile devices, enhancements and services including email,
music, imaging and gaming to its customers.
With its futuristic and high-tech ambience and a trained staff to
assist customers. the stores provide the latest mobile
applications and solutions across business domains. Nokia
Concept stores are always equipped to deliver newer concepts,
services and products, a completely redefined solutions
experience in a truly compelling environment.
Future connections
The future speaks a lot about the retail concept of the brand. For
the concept stores a special team of highly trained Nokia
Solution Specialists are taking Care of Nokia's solution selling
philosophy at the retail floor. These solution specialists engage
the consumer, understand their needs and create experiences
through demos and stories. The retail strategy for the concept
store remains focused on 'availability' Of the latest launched
Nokia handset.
The retail differentiation in the philosophy of Nokia Concept
Stores, comes through in Solution Selling where the device is
not an end in itself but a way to a solution. %Nokia's strategy is
to be present critically at •concept' selling at high-end retail
points across major cities and key locations."
2. Nokia Priority Dealer (NPD): - NPD store is the second store
which Nokia is looking out. In an NPD store there are

minimum 4-5 employees, one is cashier; two of them are sales
promoter and one peon employed by the franchise’s owner
and above all one Solution Specialist employed by Nokia. The
main criteria of getting an NPD store are that an area of
minimum 600sq ft is required in a good location. After the
application, Nokia will look into the pile of the applicant and
then it will decide after examining the all required factors that
whether franchisee is to be allotted or not to the desired
applicant. 58 NPD stores are functioning in Delhi. The
minimum monthly target for an NPD Store is more than RS
5,00,000
3. Nokia Solution Point (SSP):- The third type of store is Nokia
solution point (NSP). This store can be opened on alone or it
can be opened With Other brands under one roof. Again, it is
owned by an individual but whole operation is looked after by
Nokia. One solution specialist is deployed here by Nokia.
Solution specialist helps customers to choose right mobile
phone which matches with their requirement. The minimum
monthly target for a NSP is of
4. Shop-in-Shop counter (SIS):- The fourth and the last type of
store is the shop-in-shop store. This is a small counter with a
minimum monthly target of Rs. 5,000.00. new types of outlets
can be seen in rural areas also. This type of outlet is given to
per-son Who are already running a shop and if he wants to
open the Nokia store in his existing shop.
ADVERTISEMENT- TV’S :-
We have observed that strategy in television is entirely different
when Nokia decides to Start its marketing initiative on tv. The

focus is more on emotional appeal and the most commonly
appeal used by Nokia is the life style, who can forget the soup
ad Of Nokia and their latest campaign on Nokia 8810. The most
preferred channel in India for Nokia is CNBC followed by star
and then SONY
LOCAL COMMUNITY INVOLVEMENT INTERNATIONALLY
Nokia's country Organisation support various local community
programs. In the US, for example, these include:
Class Link — a project that uses wireless technology to
connect students, teachers and parent.
Vision one — an initiative in which Nokia provided 38,700
wireless phones worth USS3 million to four Native American
tribes in Arizona.
The United Way to America — an organization bringing
diverse people and resources together to address community
issues.
In the UK, Nokia supports Men cap, a leading charity working
with children and adults with learning disabilities, and in China,
Nokia Thinking Corner is a series of road shows and activities is
schools, encouraging creativity and innovation amongst young
people.
 INTERNATIONAL MARKETING STRATEGY
Nokia internationally has used combination of public relations,
advertising, promotions and direct selling. But internationally
company has international campaigns which are regional

specific like the advertisement in which a Chinese couple at
excursion sends photos to their kids through Nokia was used in
south east Asia i.e., Singapore, China, Indonesia etc.
The company normally has tie up With Hollywood production
houses and launches co promotions on major releases and the
latest example being Nokia tying up With Warner brothers for the
latest nick of Tom Cruise "minority report"
The company normally participates in trade fairs in which it
showcases its latest offerings and products and the best
example is exhibition launched in Singapore in Which the
company launched 6210 range of mobiles which has latest
cutting technologies
The company has different forums like Nokia forum in which the
people having different background interact with each other in
order to exchange the information.
As Of personal selling the company normally sells the products
through net and at trade fairs and doesn't follow direct selling
techniques too much.
As Of pricing the pricing of the products is same across the
nations and if there is a difference then it is due to taxes like
custom duty etc.
Company has 8 production plants majority being in USA and
Finland and the products are shipped from their plants to
different parts of the world.
There are many priorities within a business, but in a marketing
orientated company like Nokia, many of the following principles
will be high on the agenda:
1) Customer satisfaction: Market research must be used to
find out whether customers' expectations are being met by
current products or services.
2) Customer perception: this is based on the images
consumers have of the organization and its products, this
can be based on; value for money, product quality, fashion
and product reliability.

3) Customer needs and expectations: This is anticipating
future trends and forecasting for long run sales. This is vital
to any organization if they wish to keep their entire current
market share and develop more.
4) Generating income or profit: This principle clearly states
that the need of the organization is to be profitable enough
to generate income for growth and to satisfy stakeholders
in the business. Although satisfying the customer is a big
part of a company’s plans, they also need to take into
account their own needs, such as:
5) Making satisfactory progress: Organizations need to make
sure that their product is developing along with the market,
if a product is developing well, then income should
increase, if not then the marketing strategy should be
revised.
6) Be aware of the environment: An organization should
always know what is happening within their designated
market, if it is changing, saturation, technological
advances, slowing down or rapidly growing, being up to
date on this is essential for companies to survive.
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.
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).
Market penetration- the aim of market penetration is to sell
existing products to an existing market, to do this Nokia must do
a few things:

a. Change the pricing scheme (for example, penetration or
competitor based)
b. Introduce discounting
c. Start up a different advertising campaign or consider
changing an existing one.
Market development - TO complete market development
successfully, Nokia must 100k into the following:
Researching and selling to a different market (in ease 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 Anson's 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)
Diversification - This 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.
Market Research
A businesses success is based on whether they can give the
Customer what they want and when they want it. Market
research involves the collection, collation and analysis of data
relating to the consumption and marketing of relevant goods and
services.

The purpose of market research is really to find Out Whether
there is a gap in the market for your product or service or whether
you can make customers want your product through persuasive
adverting. We already know that there is a market for mobile
phones but the current market gap has become saturated (or if
not saturated. almost saturated) so Nokia need to find a new
market segment to aim their products at. In order to classify the
wants and needs of the consuming population, companies need
to gather information on the following:
Consumer behaviour- How do customers react to
advertising? Whether they are partial to prize give-aways
or free gifts? What are their reactions to new and developed
products?
Buying patterns and sales trends- Organizations need to
100k at how buying trends and patterns are affected by
class, gender, religion and region. They also need to
understand how buying patterns change over time and
What markets arc expanding and are worth trying to enter
and obviously which markets are contracting and
companies shouldn't aim to enter into.
Consumer preferences- What customers are looking for in
a product, for example, style, colour, technology, amount of
outlets, customer service and promotional styles.
Activities of competitors in the market- Nokia need to
examine how their rivals are adapting their prices and

products to meet the consumers need's, how well the rivals
are selling and What marketing strategies they are using.

In 2021, Nokia generated 21.1 billion euros in net sales, an
increase from the year before where the company made 21.85 billion
euros.
Market research should supply the company with all the
information they require about consumers preferences, whether
they buy certain products, what design features are preferable
and What kind of retail outfits are most frequently used for
purchasing certain products. Sources of marketing information
The information that companies collect through market research
can be in one Of two forms, either quantitative or qualitative data.
1. Quantitative data refers to data presented in numerical form,
usually figures, for example, Nokia's operating profit in the 4th
quarter Of 1997 was 830 million.
2. Qualitative data is the information concerning the motives and
attitudes of consumers; for example. more people buy Nokia
phones then Sony phones because Nokia phones are more
reliable.
The two main sources of market research information are
primary research (where the company has gathered the
information about the markets themselves) and secondary
research (When researchers use information that has been
discovered by other companies).
The Marketing Mix

The marketing mix refers to the combination of elements within
a company’s marketing strategy, these are designed to give the
customer What they want and in the long term are designed to
maximise profits. The marketing mix is based around the idea
of the 4P’s
1. Product-The product is the centre of the marketing mix and
the Other three Ps are based around it. Consumers
purchase goods and services for a variety of individual
reasons and a company must be aware of all of these when
selling a product (that is why they conduct market
research).
2. Price-Is a key factor in the selling of a product, and is
usually the one that is open to the most change based on
different pricing strategies, for example, competitor based,
penetration or skimming. The three main factors affecting
the amount charged for a product or service, are; the cost
of production, customer demand and competition.
3. Place-This refers to the chosen Outlets for a product or
sen'ice, for a product to be very successful it must be easy
to access, Mobile phones are very easy to access
nowadays, they are sold in supermarkets, specialised
outlets (either by network or brand) and all major
department stores.
4. Promotion-This involves providing information to the
customer over a variety of media platforms. using radio,
television and print advertising as well as using Other

promotional tools such as "money Off deals" and "free
giveaways".
The stages of marketing
1. Market and product research:
- Finding out What your customers want
- Technical research
2. Product launch
- Test market
- Pricing
- Branding
- Packaging
3. Product promotion
- Advertising
- Merchandising
- Publicity and P.R
- Sales promotion
4. Sales and distribution
- Managing the sales force
- Type and amount of sales outlets
- Local, national or international sales?
- Transportation of goods
5. Monitoring and analysing the sales
- Meeting customer satisfaction?
- Does the product need modifying or replacing?
- Is a profit being made?
- Is customer service satisfactory?
- Have the sales targets been met?

- Is the promotion and distribution policy effective?
 If a company gets to section 5 of the marketing cycle
and a substantial amount of the goals have not been
met then they Will have to consider re-launching the
product or taking it Out of the market completely and
placing it in a different market or changing it to meet
the needs of the current market.
 WHY NPD ESSENTIAL FOR THE ORGANISATION?
 New product development is essential to any business that
must keep up with market trends and changes.
 Changing environment creates new demands a needs.
 A way of getting new and keeping old customers.
 Effective way of obtaining a competitive advantage.
 Source of growth and excitement.
Nokia announces first phase of its new strategy, changes to
operating model and Group Leadership Team. New company
strategy to be shared in three phases, starting today; new
operating model to be effective January 1, 2021, designed to
better position company for changing markets and align with
customer needs.
• New model to include four P&L-responsible business
groups aligned with customer buying behaviour
• New business groups are Mobile Networks, IP and Fixed
Networks, Cloud and Network Services and Nokia Technologies
• New Customer Experience organization to strengthen
customer relationships across all businesses

• Optimizes model for better accountability and
transparency, increased simplicity and improved cost-efficiency
• New structure effective January 1, 2021
• Nokia will announce its new strategy in three phases; more
information to be shared on December 16, 2020, and at Capital
Markets Day on March 18, 2021
At this point, Nokia’s strategy review has reached four
conclusions. First, that technology leadership will be the top
priority; second, that the company’s current customer base,
consisting of telco operators and enterprises (including web
scale companies), provides a solid platform for value creation;
third, that there is a longer-term opportunity to move into higher-
value “network-as-a-service” business models; and fourth, that
end-to-end as a core strategic idea will be replaced with a more
focused approach, with each of the company’s new business
groups having a distinct role in the overall strategy.
Nokia will have four P&L-responsible business groups structured
around unique customer offerings, with ownership for becoming
one of the market leaders in their respective sector. They will
also need to demonstrate a clear route for delivering shareholder
value with return on capital employed as a key metric.
The new business groups are:
• Mobile Networks, which will include mobile network
products, network deployment and technical support services,
and related network management. This business group will offer
the full portfolio for customers wanting to buy mobile access
networks. It will target leadership in key technologies such as
5G, ORAN and vRAN. The net sales of Mobile Networks in the
last four quarters were approximately €10 billion. Tommi Uitto
has been appointed as President of this business group.

• IP and Fixed Networks, which will include IP Routing,
Optical Networks and Fixed Networks, as well as Alcatel
Submarine Networks business, currently reported under “Group
Common.” This business group will respond to the ever-
increasing demand for higher capacity, greater reliability, faster
speeds and lower costs. The net sales of IP and Fixed Networks
in the last four quarters were approximately €7 billion. Federico
Guillén has been appointed as President of this business group.
• Cloud and Network Services, which will include the existing
Nokia Software business (excluding Mobile Networks network
management), Nokia’s enterprise solutions, core network
solutions including both voice and packet core, and managed
and advanced services from its current Global Services unit.
This unit will also act as a delivery channel of certain products
from other business groups to enterprise customers. Cloud and
Network Services will target growth by leveraging the industry
transition to cloud-based delivery, network-as-a-service
business models, and software-led value creation. The net sales
of Cloud and Network Services in the last four quarters were
approximately €3 billion. Raghav Sahgal has been appointed as
President of this business group.
• Nokia Technologies, which will remain largely unchanged.
The net sales of this business group in the last four quarters
were approximately €1.4 billion. Jenni Lukander continues as
President of this business group.
In addition to these four business groups, there will be a
Customer Experience organization that will provide a common
interface with customers and will act as the voice of the customer
across all business groups. This unit will include Nokia’s
customer teams, region and country management, as well as
marketing. The organization will be led by Ricky Corker.
Additionally, there will be four corporate functions:

• Finance, which will also include cross-company shared
services, and which will be led by Chief Financial Officer Marco
Wirén.
• Legal and Compliance, which will be led by Chief Legal
Officer Nassib Abou-Khalil.
• People, which will include human resources functions,
operating model management and real estate. This function will
be led by Chief People Officer Stephanie Werner-Dietz.
• Strategy and Technology, which will include strategic
planning, long-term research including Nokia Bell Labs, and IT
and digitalization. The leader for this function will be named at a
later stage.
The new structure and any resulting new appointments will take
effect on January 1, 2021, at which point the roles mentioned
above will form Nokia’s new Group Leadership Team led by
President and CEO Pekka Lundmark. These leaders will start
developing business plans for their respective units immediately.
 Methods in NPD of NOKIA
1. Idea Generation

The first stage of the New product Development is the idea
generation. Ideas come from everywhere, can be of any form,
and can be numerous. This stage involves creating a large pool
of ideas from various sources amongst which, here are few: i.
Marketing research ii. Internal sources iii. SWOT analysis iv.
Competitors
Nokia has well elaborated NPD process that commences with
ideal generation. The Research and Development (R&D)
department has the responsibility of generating ideas deemed
relevant in generation of new ideas. Since obtaining information
is such a tedious task, the R&D engages in brainstorming
session to obtain internal information (Cravens, 2000).

On the other hand, where need arises, the organization carries
out outreach information collections to obtain the ideas of
suppliers and customers. This process is a rigorous activity that
requires enormous information to design the best product.
Nokia’s three-fold information is more reliable given that different
ideas are incorporated in the project. Hence, deficiencies of
staff’s ideas are supplemented by customers and supplier’s
ideas and, therefore, the R&D has a better beginning point.
Bruce et al (1995) contend that the R&D need a large pool of
information to begging with in order to accommodate a diverse
scope of customer’s needs. On the other hand, Crawford
(1994)’s NPD process commences with overview and
opportunity identification.
This approach stems back from where the Nokia process starts.
Nokia overlooks this stage since it first identifies the problem and
immediately it starts directly working the solution. The Crawford
(1994) approach is a step behind the Nokia’s approach in almost
all the steps but the ultimate model is similar.
2. Idea Screening
Ideas can be many, but good ideas are few. This second step of
new product development involves finding those good and
feasible ideas and discarding those which aren't.
There are certain factors which play an important role in the
filtration of the ideas. Some of them are as follows:-
I. The necessity to launch a product.
II. ll. Ability of the existing plant and machinery to produce the
product.
III. Ill. The ongoing needs of the consumers.
IV. Affordability, on the part of the organization as well as
consumers.
V. Expected return on the investment (ROI) and more.

Businesses need to perfect their product screening process in
order to avoid making either of the following errors:
1. Drop Error: It occurs when a business errors in deciding to
abandon a product idea that, in hindsight, may have been
successful if developed. Too many drop errors indicate a
conservative approach to product screening.
2. Go Error: It occurs when a business fails to identify a poor
product idea that has already moved into the development and
commercialization stages. Too many go errors indicate a young,
ambitious yet inexperienced approach to product screening.
Once the ideas are generated, the R&D assesses the suitability
of the ideas obtained to eliminate the less useful ones. It is worth
highlighting the value of information simply because inclusion of
erroneous information would spoil the final product (Cravens,
2000). Therefore, the R&D needs to work tirelessly to eliminate
any unwanted information from leaking to the product
development process.
Idea screening is done by appraising each concept against
criteria, less fit information are dropped while the most viable
information is considered for the next step. Crawford (1994)
asserts the importance of working with less but useful
information rather having voluminous and less important data.
Nokia incorporates external partners as well as experts in
screening information to ensure only the most important
information is considered.
Conversely, Crawford (1994)’s second step entails concept
generation and it requires obtaining of relevant information from
all viable sources. Once the concept is generated the
information is subdivided to form several alternatives. Each
alternative is then evaluated to assess its usefulness. He further
proposed the use of analytical method in evaluation of
information to ensure a scientific measurement is used to weigh
the outcome.

3. Concept Development and Testing
Basically, when an idea is developed in every aspect so as to
make it presentable, it is called a concept. This concept (or the
developed ideas) is now brought to the target market. Some
selected customers from the target group are chosen to test the
concept. Information is provided to them to help them visualize
the product. It is followed by questions from both sides.
The idea that passes the screening stage, are turned into
concepts for testing purpose. Under this stage, an organization
tries to understand and analyse that
- Whether the consumers understand the product's idea or
not?
- Whether the product will be demanded by consumers or
not?
- Whether the consumers will accept the product or not?
- Does the product fulfils consumer's needs and wants?
The feedback of the consumers helps the business to develop
the concept further.
Kuczmarski (1988) contends that all information needs to be
tested against the predetermined goals and expectations. Nokia
meets this obligation by ensuring that all information and ideas
are expressed in a meaningful end user term. Stating concepts
according to the consumer terms not only retain the product
focus but it also enhances a mental picture of the product design
(Bruce, Leverick and Littler, 1995).
At this level, Nokia uses some target customers to assess the
product concept. Customer inclusion plays a vital role in
maintaining the product development retails customers’
satisfaction. At this stage, Crawford (1994)’s approach coincides
with the Nokia concept but with few inclusions.

According to Crawford (1994), once information and concepts
are assessed against expectations. The valid concepts are
screened against the market factors to ensure compliance and
validation. Moreover, the focus shifts to sale projections to
assess the expected outcome. Once the marking evaluation is
done, the organization should strive to extract projected financial
reports to determine the worthwhile of the project. Finally, the
product protocol is determined to make sure prior marketing and
distribution channels are set in place.
4. Marketing Strategy Development
To avoid a marketing dilemma, Nokia makes prior arrangement
on the marketing criteria that would best suit the new product. At
this point, the target market is determined and at the same time,
the distribution channel is set. Burt (1992) argues prior marketing
arrangement enhances competitive advantage over competitors
who may opt to make replica of the product.
In addition, Burt (1992) points out that a competitive organization
should always maintain a visionary eye to be able adverse risks
while capitalizing on future opportunities. Nokia has done well in
meeting this expectation as it usually set prices in advance as
well as carrying out projected market survey both in the short run
and in the long run. Precautionary measures are also set in place
in case the actual marketing fails to match expectations. This is
done by designing a marketing mix to sell the products.
5. Business Analysis
Under this stage, the organization finds out whether the new
product is commercially profitable or not.
Under business analysis, the company finds out:-

• Profitability of the product
• Cost of the new product
• Estimates demand
• Demand pattern
• Competitors
• Total sales
• Expenses on marketing
Business analysis is a deliberate act that developers take
towards understanding the scope and challenges that awaits the
new product. At this point, the management should endeavour
to pinpoint all the challenges and limitations that face the new
telephony products. Suggestions on how to cope with such
limitations are also recommended.
In addition, an in-depth assessment of the costs and sales are
projected to help meet the future demands. Finally, the
organization keeps a profit margin as the target for the future
sales. Thomas (1993) supports prior planning as a means of
avoid shocks and surprise turn of events. All these projections
allow the management to evaluate the progress of the market
according to the estimated product sales.
6. Product Development
At this stage, the organization decides to introduce the new
product in the market and it will take all necessary steps and co-
ordinate every department in the production and distribution of
the new product. The production department, will make plans to
produce the product. The marketing department, will make plans
to distribute the product. The finance department, will provide
the finance for introducing the new product. The advertising

department, will plan the advertisements for the new product.
Once the product is developed, functional tests are then
conducted under laboratory and field conditions to ascertain
whether the product performs safely and effectively. However,
all this is done in a small scale for Test Marketing.
Both Nokia and Crawford (1994)’s processes have project
development in their NPD process. This highlights the
importance and the significance of this stage. The Nokia
Company develops prototypes before producing commercial
products. Urban and Hauser (1993) postulate that prototype is
the best way of actual market test since it also allows fine
adjustments of the product before the commercial release.
For Nokia, prototypes are used to measure product acceptability
and final customer observation about the product. The prototype
is also used to test the functionality of the products to evaluate
how well it meets the predetermined goals and objectives.
However, in Crawford (1994) NPD process, prototype is placed
in the third step. According to Crawford (1994), prototype is used
to assess the market situation as well as determining the quality
of the product.
Once the prototype is evaluated, the Nokia Company makes fine
adjustments to ensure that the final product is ideal. All the
amendments are based on the feedback received from the
consumers, suppliers, distributors; as well as ideas generated
from within the organization. However, in case the discrepancies
between the actual performance and expected performance
should surpass the set limit; the management may opt to restart
the entire process.
7. Test Marketing

Test marketing gives, marketer an opportunity to tweak the
marketing mix before the going into the expense of a product
launch. The amount of test marketing varies with the type of
product. Costs of test marketing can be enormous and it can also
allow competitors to launch a "me-too" product or even sabotage
the testing so that the marketer gets skewed results. Hence, at
times, management may decide to do away with this stage and
proceed straight to the next one.
Nokia carries out three types of market testing; standard test
markets, controlled test markets and simulated test markets.
Standard test market is the natural market that is governed by
market forces of demand and supply. When testing by this
method, the product is subjected to the stiff competition that
would affect any normal product.
Once the product is assessed under natural conditions the
management can be able to evaluate the way of improving
product. The second market testing is done under the controlled
environment. One way of doing this is by eliminating competition
and assuming a monopolistic atmosphere. The third test market
i.e., the simulated market testing is done where customers are
exposed to stage advertising and then their purchasing
decisions are monitored.
For accessing a new market, Nokia’s quest to include
collaborations from partners is an added advantage. Hamel and
Prahalad (1994) gave a similar opinion or suggestion of strategic
alliances and partnership as a means of reaching out to the
unexplored territories. This market testing method is only applied
to new products.
Urban and Hauser (1993) have reiterated the need to conduct
market tests to evaluate the behaviour of consumers toward the
new product. Nokia has been using these three tests to most of
its new product. Before launching any product, an intensive

market promotion is usually conducted to popularize the product
before the actual production. Conversely, Crawford (1994) has
set the market-testing phase as a constituent of the final phase.
Nokia decided to carry out market testing as a strategy for
promoting the products.
8. Commercialization
If the test marketing is successful, then the company introduces
the new product on a large scale, say all over the country. The
company makes a large investment in the new product. It
produces and distributes the new product on a huge scale. It
advertises the new product on the mass media like TV, Radio,
Newspapers and Magazines, etc.
Commercialization is the last step that Nokia uses in developing
a new product. This phase involves large-scale production of
new products. Since all the amendment and fine-tuning have
already been done, the organization expects minimal obstacles
limiting the products limitations.
However, according to Crawford (1994) the final stage is dubbed
the launch phase. This step encompasses several activities
such as market testing, the launch strategic planning as well as
public policy issue. By setting the commercialization process
independently, Nokia concentrates all the efforts in
commercializing the product without having any competing
priorities as is the case in Crawford (1994) system.
9. Existing Gaps
Although both processes bear some similarities, some sharp
differences exist. In Crawford (1994) model, five processes are
used whereas Nokia uses a more elaborate process that

comprises of eight steps. The two approaches harbour all the
steps in new product development but Nokia model is a more
elaborate hence reducing chance of errors occurring in the
process. However, the Nokia model is time consuming due to
the large number of participants that are involved, which delays
agreement.
Therefore, it is upon the organization to reconsider altering the
NPD process; focus should be on reducing the duration that it
takes. Conversely, it’s worth to critic Crawford (1994)’s final step
i.e., the launch phase, which has so many things that ought to
be done in preceding the stages. Testing market with the final
product may prove a misplaced action especially when the
action fails to meet the expected result. Such a backfired mission
would force the organization to start the entire process from the
scratch.
Results and Discussion
The adoption of an eight-tier production generation system, by
Nokia, has proved clearer, more inclusive and accommodating
format as compared to the Crawford (1994)’s five-tier model. The
Nokia model disintegrates the several processes into distinct
activities hence making it easier for the management to deal with
each item with the overlapping effect as in the case of Crawford
(1994) model that overcrowds.
When items are evenly spread, the management is able to
analyse each item exhaustively without being force to subdivide
their focus on competing opinions. The flexibility of Nokia model
to accommodate networks has helped the organization in
reaching out to the marginalized groups hence increasing
chances of product acceptability.
The Nokia model consumes more time before the final product
is generated compared to the Crawford (1994) model that takes
relatively shorter time. Since the need to develop a new product

emanates from customer survey reports, delayed production of
the product is likely to get a negative response from the market.
Thus, the organization strives to merge several activities or
reduce the time that each activity takes. It also worth noting that
since Nokia operates in a perfect market, some of its competitors
may realize to produce telephony with features that are needed
in the market only for Nokia to realize the market is already
occupied.
Core competencies
The terms core competencies are repeatedly used in business
writings although few authors give adequate definitions of the
same (Duysters & Hagedoorn, 2000).
According to Nokia management, there are three main
competencies that the organization is anchored on; the
handsets, network technology and middleware. As the
organization develops new products, it is always important to
maintain a clear consideration on the three issues. This is where
the firm uses an elaborate intermittent process to ensure
adherence to its core principles.
Since Nokia is a world leading telephony producing firm, the
management and the R&D department enjoys the liberty of
operating without pressure in terms finances and technology.
Hence, the organization has ample time to carry out intensive
research as well as forging partnerships with other members to
ensure quality in the product development process. However,
longevity in the product development process has often affected
the products produced negatively.
On the other hand, Crawford (1994) process is a congested
approach and may be difficult to be followed by ordinary
managers. This problem can be addressed by further

subdividing these activities into independent sub-activities to
enhance clear understanding as well as reducing mystification.
Giving clear-cut sub-activities facilitates easier identification of
the problem and this may save the management the agony of
tracing the problem.
Review of market performance
The company must review the marketing performance of the
new product. It must answer the following questions:
- Is the new product accepted by the consumers?
- Are the demand, sales and profits high?
- Are the consumers satisfied with the after-sales-service?
- Are the middlemen happy with their commission?
- Are the marketing staffs happy with their income from the
new product?
- Is the Marketing manager changing the marketing mix
according to the changes in the environment?
- Are the competitors introducing a similar new product in the
market?
The company must continuously monitor the performance of the
new product. They must make necessary changes in their
marketing plans and strategies else the product will fail.
 Why Nokia Product Fails in the Market?
Product Failure can be:
1. Absolute product failure: A new product introduction
which does not manage to recover its production and
marketing costs; the company incurs a financial loss.

2. Relative product failure: A type of new product failure
in which a company earns some profits that is less than the
company's target rate of return. It does not reach profit
goals.
Comparative Study: -
Difference between SONY ERICKSSON Camera Phone &
NOKIA Camera Phone
MODEL:
SONY ERICKSSON P800 VS NOKIA 7650

• Dimensions, weight and autonomy - The phones are quite
comparable to each Other by these features. P800 weighs
158g against Nokia, which weighs 154g. The form-factor is
also similar. P800 has a lithium-polymer battery of 1000
mAh capacity to decrease the weight of the phone, Nokia
is equipped by BLB-2 battery of 750 mAh capacity. We saw
such type of battery in older models, in Nokia 8210 for

instance. In respect to the autonomy, these two handsets
resemble to each other too. In case of similar talk time and
time of using of additional applications the phones work
about 2 days, it's the optimal autonomy Without re-
charging. so, P800 has the parity With Nokia 7650 in
dimensions, form-factor and autonomy.
• Screen and text input - Large energy consumption in P800
is caused by technical characters, firstly, because of the
screen. It can display up to 4096 colours like Nokia 7650
but P800 has a touchscreen, which allows to input
information with a help of on-screen keyboard and to lighten
a menu navigation. You can easily scroll the lists by a stylus
and select the desired menu items. Only a usual keypad
(as in many other handsets) can be used in Nokia 7650 to
input the information. As a result, it's approximately
impossible to input large texts. can be compared in
convenience to any PDA, what is really a Step forward. so,
if you are going to make notes in your smartphone, choose
P800.
• If you don't like on-screen keyboard, you can use a usual
one, it is placed on the removable nip cover of the phone.
• The screen of the 7650 measures 35x41mm and has a
resolution of 176x08 pixels, While P800 measures
40x61mm and has a resolution of 208x320 pixels. As you
see the size of the screen in P800 is larger. The information

is clearly Visible on the displays of both phones in all
lighting conditions, no considerable differences.
• Vibrating alert and ringing tones - A user has an excellent
choice to decide which ringing tone he likes most of all.
Both Of these phones support the most common formats
(in reality, all formats supported by smartphones). But 7650
as well as P800 has problems with the vibrating alert, it is
rather weak. In both cases you touch the screen while
talking, it gets dirty very quickly, especially 7650 has such
a problem. It's possible to use a handsfree mode in but the
volunteer of the loud speaker is very low.
• User's interface - both devices are worked under Symbian
OS, so, the interface has much in common. Both are handy,
no difficulties while working. Notable, that 7650 has OS in
6.1 version and - in 7.0 version. The last version doesn't
give any considerable advantages to the consumer, only
few extra features which don't mean much. Of course, if to
say about long-term outlook, the 7. 0 version is the winning,
but the platform 60 will be also long-life. Hence, here is also
the parity.
• The main navigation key in the 7650 is 5-directional
joystick. P800 has a Jog Dial. The rate of moving through
the menu is rather high in both cases, but P800 has also a
stylus-based navigation. Besides, you can work With P800
even When the flip is closed, in this ease you have an
access to 9 the most one in used applications. so, if to Say

about navigation capabilities, they are definitely in favour of
P800.
• Standard applications and the memory - TO say the truth,
none of these devices has unique software, which can be
the strong case for this or that model. The devices Offer
similar features and the comfort of viewing the information
(P800 has better text input). The applications occupy
almost the same memory space in both handsets, the only
differences are that Sony Ericsson has 3 times more
memory space (12Mb) than 7650 (4Mb). Furthermore,
SonyEricss0n has an additional memory slot -
MemoryStickDuo, which extends greatly the phone's
capabilities. Now there are almost no limits of the internal
memory volume, data bases and rarely used applications,
musical and video files can be kept on the memory cards.
The slot is placed on the right-hand side of the phone, it is
always available. It is one more advantage of P800.
• Bluetooth - Bluetooth can be used only for data
transmission in Nokia 7650, you can't switch it to the phone,
it's really a shortcoming. One can transmit both data and
voice via Bluetooth in P800.
• Data synchronization - You can do it via IR-port or
Bluetooth in both models. Also, in the standard kit Of P800
cable (RS232) is included. You can create reserve data
copies. synchronize notes of organizer, phone book. mail
client with the most popular applications from PC. Both
devices are quite capable. I forgot to say that both handsets
had SyncML support.

• WAP - Nokia7650 has WAP-browser in 1.2.1 version, the
rival product has version 2.0 It doesn't play any role today,
but in future, in a year or year and half it can be crucial.
• Camera - Internal cameras of both devices are similar by
quality and picture resolution. You could 100k at the
pictures taken by this camera in reviews of these
smartphones.
 Conclusion
P800 has more features than Nokia 7650, though form-factor
and approximate work time are similar. The standard kit Of
P800 is also better. But the price of the 7650 goes down little
by little, While P800 Will appear only in December. It's
interesting that the price competition Will be impossible by that
time, 7650 would cost Rs. 19350 approx. While the price of
P800 would be Rs. 25000 approx. The classical situation
emerges, when the new advanced product is more expensive.
P800 can be a real rival to the 7650 if the price parity is
reached, but it's impossible. Hence, P800 - a potential leader -
turns into a usual model, which will have a pressure from Nokia
and Other manufacturers. After Nokia 3650, Which will be
launched in February, the other smartphones on the platform
60 will appear. This segment of the market (Smartphone) is not
great and only the most quick and aggressive companies will
be successful. Sony Ericsson loses Nokia now, though it has
the technological advantage. Every day more applications from
the third companies appear for 7650, Of course, they are
created for P800 too, but slowly. On the Other hand, the life Of
P800 Will be longer because the phone has a high potential to
develop. As you see the decisive point is the market policy of
Sony Ericsson, one mistake and P800 will become a common

model, but if the company comes to decision to decrease the
price of the model as much as possible, P800 will be the leader
of the market.
SUCCES RATE OF THE PRODUCT
30,000 new consumer products are launched annually, 95% of
them fail. The failure rate for new products launched in the
grocery sector is 70 to 80 percent, according to Inez Blackburn
of the University of Toronto. Ask anyone what percentage of new
products fail. The usual answer is somewhere between 70-90
percent.
Reasons for failure:
 Marketing Failures: small size of the potential market. No
clear product differentiation, poor positioning
 Financial Failures: Low return on investment
 Timing Failures: Late or too early in the market
 Technical Failures: Product did not work, bad design.
Organizational Failures: Lack of organizational support
 Environmental Failures: Government regulations,
macroeconomic factors
Approach: -
1. Sequential approach: In this approach, each department
in the company works on the new product separately at
each stage of development and then passes it on to the
next department for the successive stage. This approach
is often used to control risky and complicated projects.
The major disadvantage of this approach is that it is very
slow and not appropriate for fast-changing and highly
competitive markets.

2. Simultaneous approach: An approach to new product
development in which various departments in a company
work closely together so that there is some overlap in the
development stages in order to save time and increase
effectiveness. Companies that practice Simultaneous
Product Development achieve the closest possible
collaboration between designers and the rest of the
development chain.
Benefits of the Product Development Processes
1. Superior quality products: -
The product development processes can lead companies to
release superior quality products. That becomes possible
because the development process involves extensive research
into what the target consumers want and the companies also
seek consumer collaboration in testing the products. They use
the consumer feedback they get to make improvements,
changes, or additions to the product design, features, and
functionality. By creating superior quality products that meet
consumer requirements, the companies can gain more local,
national and international interest in their brand and products,
improve their industry standing and achieve higher sales.
2. Increase in customer satisfaction: -
Satisfying customer requirements is one of the principal goals
of new product development. Before beginning the product
development process, companies assign teams to identify and
research target groups that are most likely to purchase their
products. They note what these groups want, what they use,
and how they use products and use this information to develop
new products. After developing product prototypes, the teams
gather focus groups to collaborate with them in testing the
products and providing honest insights on their overall appeal

and usefulness. These insights enable the teams to make
better-informed decisions to create usable products.
3. Advanced competitive marketability: -
Along with its quality, the success of a product depends to a
large extent on the ability of the manufacturing company to
market it to its target consumers. Most companies compete in
their marketing with their business rivals. Their ability to
accomplish this is their competitive marketability. The product
development process can help a company to increase its
competitive marketability.
By conducting market and consumer research, the company
becomes better placed to understand current market
challenges and options and anticipate future ones. They can
review the available data and make informed business
decisions. They can brainstorm marketing ideas and create
workable solutions to expand to new markets and gain new
customers.
Besides that, following are the benefits of NPD -
a. Effectively covers various price segments while
maintaining lower development cost
b. Improves efficiency to further development and
manufacturing of products within each series
c. Changes the competition from a single market to global
level
d. Creates a strong brand image, enables it to set prices that
are based more on customer value than on cost
e. Sell more to existing customers (making the most of
existing relationships is cheaper than finding new
customers)
f. Spread fixed costs like premises or machinery across a
range of products
g. Diversify the products you offer so you’re less reliant on
certain customers or markets

 KEY SUCCESS FACTOR OF NEW PRODUCT
DEVELOPMENT OF NOKIA
CROSS FUNCTIONAL TEAM: – It is used widely
throughout industry to resolve complex issue such as the
challenges of new product development. These teams are often
the only means of developing complex products. This team is
more difficult to manage but their combination of different skills
allows them to solve intricate problem. Communication both
within the cross functional team & between the team and the
outside organization are a critical issue that must be resolved to
enable superior team performance.
MANAGEMENT SUPPORT: - Management support
communicate a clear vision of team objectives while
simultaneously given team member the freedom to pursue that
vision resulting in improved product team performance. Close
monitoring of project status by senior manager demonstrates
the importance of a product under development to both team
member & other in the organization. It helps the team to gain
cooperation from other in their organization while increasing
risk taking & innovation.
SUPPORTIVE ORGANIZATIONAL STRUCTURE: – It has
a number of influences that have a positive effect on team
success. Organizational structure, particularly a deliberate
development process, is vital to the success of product
development. An organizational structure that improves
communication both internal & external to the team is critical.
 SWOT ANALYSIS OF NOKIA

Strengths -
Global Products and Image — Nokia is a global company. It not
only sells its products to 130 countries but also sets up
research and development departments in fifteen countries to
produce its products in different culture and language needs
English, Dutch, German and Chinese.
High Quality Products — Nokia concerns about product quality
Which is the most important factor to satisfy customer's needs.
Nokia adds more values by superior quality or differentiated
features to the market. Meanwhile, it also continuously
improves upon the existent markets.
Serving new designs and — Nokia launched a wireless game
which by use of SMS, tv, print media, radio and internet
provides clues to help players to solve a mystery. This helps
Nokia to attract customers to use its products.
Wide range of products — Nokia has the highest number of
product line (more than 10 models) compared to its competitors
Samsung, Ericksson, Motorola etc.
Product Warrantee Worldwide — NO matter where Nokia's
customers are, if they got a problem with their mobile phones,
they can approach any Of the Nokia's centers. Thus, ensuring
a good customer service.
• The biggest strength of the company is their brand name.
Many consumers often opt for Nokia more than any other brand
because of the reliability, durability, and creativity their phones
provide.
• Most of Nokia’s highly qualified personnel have teamed up
with Microsoft’s experts as a part of the acquisition deal.
• The phones provided by Nokia have a much higher re-
sale value compared to other mobile phone brands.

• Many of Nokia’s products are easy to use and are usually
coupled with a variety of handy accessories.
• Products offered by the company are available in all price
ranges.
Weaknesses -
High price — Nokia offers a good range of high-quality
products at high prices Though the high prices may be justified
in terms of the costs to the company but this can act as a
weakness in certain sections of the market e.g. the middle-low
income group people. Demand is skyrocketing but the price
pressure is high.
New product developing problems — Although Nokia provided
color screen mobile phones in September 2002, this was late
as compared with its competitors such as Sony Ericsson and
Samsung. MS acted as a weakness as the people had already
accepted the range introduced in the market and didn't want to
switch.
• The company, though, is often criticized for poor after
sales services.
• Took a long time to enter the highly productive and
booming smartphone market. As a result, the company
lost a lot of its once huge market share.
• Some of Nokia’s products are not affordable for middle-
and lower-class consumers, which often affects their
searches negatively.
• The Finnish mobile company has made comparatively
lower profits due to drop in sales that result from tough
competition. According to statistics, the company’s profits
have fallen by 7% in the second quarter of 2014.

• There are slumps in the company’s development with its
Windows Lumia range of smartphones because of
constant competition from rivals Android and iOS.
Opportunities -
Joint venture i" Technology — Nokia has joined with Hewlett
Packard(HP) Company in technology which has a very good
reputation for many years. Nokia thus. has a considerable
opportunity to enlarge their market size into PC users who
prefer mobile phones compatible With PC device.
product launch continuously - Nokia uses Total Quality
Management (TQM) which mentions more about training
worker program. and makes product of high quality. All
employees are well-trained and motivated and consecutively
production processes are also developed as well. Nokia has
established Research and Development department (R&D)
which develops its product line into modern modification as well
quality as the existing products,
New Software Market— As known, the amount of data tramc in
mobile networks is growing at a tremendous rate. people
around the world are using new mobile services, which are
directly relevant to personal needs. Nokia has already added
value through MMS for Messaging and E-mail, Java for
download any applications and HTML especially for content
search. so, it may attract those businessmen and teenagers
who are interested in the new software market.
Easy Availability - Many mobile phones retail stores, such as,
the link, Phone4U and Carphone warehouse, have spread
across London in every street. And, Of course, every Store
have not missed the opportunity to choose Nokia as their
product line. Consequently, all the customers can be
guaranteed that any damage or loss of Mobile phone will be

serviced through these retail shops. Likewise, in opportunity
aspect, Nokia has an opportunity to convince the prospects of
buying Nokia in the plenty of stores around the town. However,
the key to success of Nokia Will be the flexible changing
capabilities.
The Microsoft-Nokia deal is a win-win situation for both
companies. The deal possesses great opportunity if both
utilize resources in a proper way.
Opportunities to expand the range of products and their
prices. Also bring in new features and applications on to
Windows OS.
Threats -
Threats in PC Markets - Due to fierce competition in mobile
phone market it has caused new technology compatible With
PC computer. Sony Ericksson specializes on PC computer
now. Sony applied their computer system into mobile phone as
well as PC computer on hand at the same time. Furthermore,
nowadays people are interested in advance of computer as
similar as mobile phone market. In this sharp competition. it is
going to be harder for Nokia to grasp customers' attention and
they Will have to focus on outstanding imagination and
creativity in their marketing plans.
Fluctuations in Euro exchange rates — Most of the European
countries have joined the European Union and thus because Of
the varied economic conditions, the currency will fluctuate a lot
finally effecting the profits of the company.
Blurring Of product boundaries — This implies new entrants in
the same industry like Sony, Motorola etc. who are producing
almost the same product range as Nokia and thus, there is a
need to change their models.

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