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Nokia Case Study

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Nokia Failed, Why?
Nokia Failed, Why?
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Nokia Case Study

  2. 2. Nokia History  Long history of successful change and innovation Adaptable to shifts in markets and technologies.  Humble beginning One Paper Mill Cables Paper Products Industrial Electronics Telecommunication
  3. 3. Timeline 1960 • Nokia first entered the telecommunications equipment market • Electronics department was established at Finnish Cable. 1967 • Nokia took its current form as Nokia Corporation • rubber, cable, forestry, electronics and power generation. 1982 • Nokia introduced the first fully-digital local telephone exchange in Europe.
  4. 4. 1990 • Nokia made a strategic decision to make telecommunications as a core business. • Goal of establishing leadership in every major global market. 1991 • The first GSM call was made with a Nokia phone over the Nokia-built network of a Finnish operator called Radiolinja. 1998 • Nokia was the world leader in mobile phones, a position it enjoyed for more than a decade 2011 • Nokia joined forces with Microsoft to strengthen its position in the highly competitive Smartphone market.
  5. 5. Nokia’s Entry in India • Nokia entered India in 1995. • Nokia’s arrival came a year after India’s telecom sector opened up to private companies and the first cellular services licenses were given out.
  6. 6. Nokia Success story • First Indian ringtone “Saare Jahan Se Accha”– on a Nokia 5110 handset. • The ring tone was popular at that time. 1998 • Introduced its first phone with a user menu in Hindi, in Nokia 3210 handset. 2000 • Introduced its first camera phone – Nokia 7650.2002 • Introduced its Nokia 1100 – the company’s first made-for-India phone. 2003
  7. 7. • Nokia introduced text messaging in Hindi. • Introduced the first Wi-Fi enabled phone – Nokia Communicator N9500 2004 • User interfaces in other Indian languages. • First firm to set up a manufacturing unit for mobile phones at Sriperumbudur, Chennai. 2006 • Launched its first regional news portal in India • In May 2007, Nokia chose India for the global launch of its handset – Asha 501. 2007 • It launched Nokia Life – information tools on mobile phone handsets – for the first time in India. • Nokia had 500 million mobile subscribers in India. 2009
  8. 8. Strengths 1. Experience 2. Largest network of selling & distribution 3. Strong customer relation 4. The biggest strength of the company is their brand name. 5. Wide range of products for all class 6. High Resale value compared to other competitors 7. Durability 8. Long battery life
  9. 9. Weakness 1. Low voice quality. 2. Less stylish in low priced products. 3. Heavy sets. 4. Unlike I phone apple, Nokia N97 is complex, tough and not user friendly. 5. Took a long time to enter the highly productive and booming Smartphone market. 6. Some of Nokia’s products are not affordable for middle and lower class consumers.
  10. 10. Opportunities 1. New growth markets. 2. Well designed and styled sets. 3. Increase their presence in 3G & edge market 4. Mini notebooks 5. 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. 6. Opportunities to expand the range of products and their prices. Also bring in new features and applications on to Windows OS.
  11. 11. Threats 1. China mobiles – It has made exact copy of Nokia N96 and they provide more features in less cost. 2. Sales may decline due to global economic downturn 3. Strong competition from other Smartphone companies will make it hard for Nokia to maintain and expand their market share.
  12. 12. SWOT Analysis of Nokia Models
  13. 13. Failures Of Nokia  Failure of Symbian OS : - lack of applications and UI (User Interface).  Wrong Deal with Windows : - Windows which was new in the field to regain its status was the biggest mistake the company made.  NOKIA Became Laggard in Smartphone Market : - Stiff competition from Samsung and Apple, and lack on focus on innovation was the big reason of collapse.
  14. 14. Contd…  Failure to Implement the Right Umbrella Branding Strategy: Apple was the first phone to use the strategy of umbrella branding using iPhone as an umbrella brand and then building subsequent models each year. Samsung was quick in identifying this concept and they started building their high end phones with Galaxy S series.  Nokia on the other hand used an umbrella brand in the N series and recently the Lumia series, but they failed to create buzz among customers
  15. 15. Make In India A major new national program. Designed to facilitate investment. Foster innovation. Enhance skill development. Protect intellectual property. And build best-in-class manufacturing infrastructure. There's never been A better time to make in india.
  16. 16. Wow ! Made In India 1. Giant assembly plant of VIs and component suppliers, by hand with cheap labour 2. 8,000 full time jobs out of a figure of 30,000 ; mostly women 3. Effective transportations cost, flown via cargo jumbo jets 4. Jijits and widgets from Shenzhen and Dongguan in China 5. India production share ; cardboard packets i.e. less than 5% of unit cost 6. Even components as simple as keyboard and charger and other low tech items are not in fortune of Sriperumbudur plant.
  17. 17. Sriperumbudur Plant Assets Freeze
  18. 18. Timeline Of Chennai Issue 8-Jan-13 • India’s Income Tax department inspects the Chennai factory 21-Mar-13 • The Income Tax Department issues Rs 2,080 crore tax demand (later rectified to Rs 2,649 crore) on Nokia India. 17-Apr-13 • The Delhi High court asks the Income Tax Department to re- examine its claim against Nokia and not to take any further coercive action.
  19. 19. 8-May-13 • At Nokia India’s request, Finland invokes the Mutual Agreement Procedure (‘MAP’) under the DTAA, asking the competent authorities in India to seek an agreement on the application of the DTAA 31-May-13 • The Commission er of Income Tax (Appeals) dismisses Nokia India’s appeal 3-Sep-13 • Nokia announces that it intends to sell its Devices & Services division to Microsoft 25-Sep-13 • India’s Income Tax Department freezes all assets of Nokia India
  20. 20. 12-Dec-13 • The Delhi High Court agrees to unfreeze Nokia India’s assets in return for the deposit of Rs 2,250 crore into an escrow account 12-Feb-14 • Nokia India announces it will appeal the decision of the Delhi High Court to the Indian Supreme Court 14-Mar-14 • India’s Supreme Court dismisses Nokia India’s asset freeze appeal, allowing the Delhi High Court order to stay in force.
  21. 21. 21-Apr-14 • Nokia confirms that the Chennai factory will be excluded from the Microsoft deal, due to the asset freeze imposed by the Income Tax Department 25-Apr-14 • Nokia globally completes the sale of substantially all of its Devices & Services business to Microsoft. 6-Oct-14 • After Microsoft ends its transitional services agreement (TSA) , Nokia announces from November 1 operations will be suspended 31-Oct-14 • The last working day of the Chennai factory.
  22. 22. Conclusion  Nokia has been an industry leader for many years however the market has changed quickly and Nokia must right itself.  There is a significant risk for Microsoft it should deliver a world class OS or otherwise the customers will turn to Apple and android.  The main reason for why Nokia Can’t MAKE IN INDIA is the Chennai Scam.
  23. 23. Thank you 