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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015

CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

CHAPTER 1

INTRODUCTION OF THE STUDY

1.1 INTRODUCTION

The global mobile phone industry is based on many different manufacturers and operators.the
industry is based on advanced technology and many of the manufacturers are operating in
different industries,where they use their technological skills,distribution network,market
knowledge and brand name.four large manufactureres of mobile phones are today
determining the global mobile phone industry:Nokia,Sony ericson,Samsung and Motorola.In
addition to these companies there are many manufacturers that operate globally and locally.

1.2 TELECOM INDUSTRIES IN INDIA

Growth in India's mobile sector, from a humble start in the mid-1990s, has really picked up
pace in recent years, aided by higher subscriber volumes, lower tariffs and falling handset
prices. Home to a clutch of global operators working with local companies, India had almost
350 million mobile subscribers (including GSM & CDMA) in early 2008. The market was
growing at an annual rate of around 60% and while the ARPU has been steadily declining as
competing operators offer cheaper tariffs the usage levels have been high, thus slowing the
decline of ARPU. By 2008 there was a major push to take mobile services into the poorer and
rural areas of the country. Driven by cheap call rates, low handset prices and rising incomes
among the estimated 300 million of the population that are described as the country's middle
class, the boom in India's mobile market was continuing into 2008. Also operators were
increasingly eyeing the poorer rural areas a potential markets for their services. India has
continued to attract a lot of attention in the global telecom sector, especially from foreign
players interested in entering the Indian market.

India's mobile market finished in the 2007 year strongly with over 233 million
subscribers in the sector according to the telecom regulator's figures which cover GSM,
CDMA and Wireless Local Loop (WLL). The Telecom Regulatory Authority (TRAI)
announced that the country had added a record 8.32 million subscribers during November

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2007, up from 8.05 million one month previously. This was followed by 8.16 million in
December.

India's mobile operators committed to investments of about US$20 billion over a two year
period to 2009 to bring over 80 per cent of the population under mobile coverage.The mobile
market in India continued its strong growth through 2007 and looked to be carrying a 50 per
cent annual growth rate into 2008. While the market was initially totally a GSM domain,
CDMA technology was introduced as a Wireless Local Loop (WLL) service, which after a
long battle with the regulator was eventually accepted as a legal mobile service. The
subscriber base has developed into a fairly stable mix of GSM subscribers, (74 per cent
market share at end-2007) and CDMA subscribers (24 percent). The regulator initially
referred to these CDMA service as WLL (Mobile), or WLL (M). These CDMA services were
differentiated from WLL (Fixed), or WLL (F) services, which at the time were being
included as part of the fixed-line segment of the market. In 2006, TRAI started putting the
emphasis on the 'wireless' in WLL in WLL (F) and grouped all WLL services with 'mobile'
services.Although well behind China a terms of the total size of its mobile subscriber base, a
comparison of net growth by end 2006 was interesting. Chain added a total of just fewer than
6.1 million subscribers in December 2006, bringing the total additions for the December
quarter to just less than 18 million; India, by contrast, added 6.25 million in December to
being the total number of additions to 19.5 million for the quarter.

KEY PLAYERS OF MOBILE PHONES

L.G.
Nokia
Motorola
Samsung Mobile
Tata
Reliance
Sony Ericsson
Virgin mobile

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1.3 NOKIA HISTORY:

Nokia was founded by Fredrik Idestam, a mining engineer in 1865. The name Nokia was
decided in 1871 when he opened his second paper mill on the bank of Nokianvirta river.
Nokia started out with making paper which incidentally was one of the very first technologies
used for communications. Fredrik Idestam was the chairman of the company till 1896 when
he retired, and Leo Mechelin took over as the chairman.Under Mechelin, Nokia started a new
business unit of electricity generation. In 1898, Eduard Polon founded the Finnish Rubber
Works, which later became Nokias rubber business. They were making everything from
galoshes to tires. In 1912, Finnish Cable Works was established by Arvid Wickstrom, which
later .Nokia's headquarters are located in Espoo, a neighbouring city of Finland's capital
Helsinki. It has R&D, manufacturing, and sales representation sites in many continents
throughout the world. Nokia Research Center, the corporation's industrial research
laboratories, has sites in Helsinki; Tampere; Toijala; Tokyo; Beijing; Budapest; Bochum;
Palo Alto, California and Cambridge, Massachusetts. Major production factories are located
at Salo, Finland; Beijing, China; Dongguan, China; Chennai, India; Komrom, Hungary and
the Ruhr region at Germany. In March 2007, Nokia signed a memorandum with Cluj-Napoca
City Council, Romania to open a new plant near the city in Jucu commune. Nokia's Design
Departure has stayed at Salo.

Nokia plays a very large role in the economy of Finland. Nokia is by far the largest
Finnish company, accounting for about a third of the market capitalization of the Helsinki
Stock Exchange (OMX Helsinki); a unique situation for an industrialized country. It is an
important employer in Finland and several small companies have grown into large ones as
Nokia's subcontractors. Nokia increased Finland's GDP by more than 1.5 percent in 1999
alone. In 2004 Nokia's share of the Finland's GDP was 3.5 percent and accounted for almost a
quarter of Finland's exports in 2003. In 2006, Nokia generated revenue that for the first time
exceeded the state budget of Finland. This has led some to refer to Finland as "Nokialand."

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Finns have ranked Nokia many times as the best Finnish brand and employer. Nokia
is listed as the 5th most valuable global brand in Business Weeks Best Global Brands list of
2007 (1st non-US company), the 20th most admirable company worldwide in Fortune's
World's Most Admired Companies list of 2007 (1st in network communications, 4th non-US
company), and is the world's 119th largest company in Fortune Global 500 list of 2007, up
from 131 of the previous year.

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1.4 AN ERA OF COMMUNICATION

Nokia was not a new player in telecommunication field when they started concentrating on it
in 1990s. Instead, they had the ball rolling from 1979 when they created a radio telephone
company Mobira Oy as a joint venture with one of the leading TV maker Salora in Finland.
They started with the Nokia DX 200 which was a digital switch for telephone exchanges.
They worked on the development of a version of exchange & Nordic Mobile Telephony
network was born.

In 1987, GSM (Global System for Mobile communications) is adopted as the


European standard for digital mobile technology. This new technology revolutionized the
telecommunication industry with its high-quality voice calls, international roaming and
support for text messages.

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1.5 THE GROWTH OF A MOBILE GIANT

Nokia truly entered a new age GSM cell phone time with their Nokia 1011 model which was
launched in 1992. During this time, Finland was undergoing a severe economic meltdown
and Nokia was also in a severely crunched economic situation. In 1994, Nokia launched their
2100 series phones which were the first phones with the now famous Nokia ringtone in them.
Nokia had planned a target to sell 400,000 of these phones which was a big number at that
time, but they got lucky and it turned out to be such a huge success that they sold over 20
million devices worldwide. This was truly the start of the ride for Nokia atop the cellphone
business.

As the graph, clearly depicts, Nokia was the clear the gorilla in the cellphone market in
1990s, with almost 100% market share. As the time, moved towards the next century
competition for Nokia grew but still they were able to hold onto their market leader position.
From 1996 to 2001, Nokias turnover increased almost fivefold from EUR 6.5 billion to EUR

31 billion. With the start of the next century Nokia just kept on growing bigger & bigger
becoming the leader in the mobile technology. In 1999, Nokia launched the Nokia 7110

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which was the first phone capable of rudimentary web-based functions including emails.
Within 2 years Nokia launched its first phone with a built-in camera and again in September
2002 they came out with a phone capable of capturing videos i.e. the Nokia 3650. During this
time, there was a huge number new patented technology coming out from the Research and
Development division of Nokia, which was helping their share prices soar to the sky.

1.6 THE STUMBLING GIANT

Originally in 2007 after the release of iPhone, Nokia smartphones like Nokia N95 with
Symbian OS outsold the iPhone and had a dominating 62.5% market share in Q4 of 2007
ahead of Microsofts Windows mobile OS and RIMs BlackBerry. As the competition grew
fierce in 2008, Apples iPhone 3G hit the market which started the rise of the new kind of
smartphone within the cellphone space. As Nokia felt intimidated, Olli-Pekka Kallasvuo,

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CEO of Nokia, tried everything in his power to tackle this new threat but Nokias pie was
being snatched away slowly. The graph below shows how Nokia was affected when Apple
started manufacturing iPhones in 2008. But when the iPhone 3rd Generation phones hit the
market with the new refined iOS operating system it quickly doubled the market share for
Apple and reduced the Nokias share along with others. Nokia was still the market leader
with a 40.8% market share in Q4 2008 with its new smartphone like Nokia 5800 Xpress
music and Nokia E71 but was declining.

In 2008, Nokia bought the Symbian operating system and the following year made it
open source so that more & more apps could be developed for Symbian operating system.
But this step couldnt turn the fortunes of Nokia as in 2009 their market share of Symbian fell
to 46.1% in Q4 2009 from 52.4% in Q4 2008. But in 2010 everything started to fall apart for
Nokia as Google with its Android operating system along with Apple with the iOS started to
eat into Nokias business, and the other Symbian makers including Samsung and Sony
Ericsson decided to take up Android as their new operating system. In mid-2010, Nokia was
the only OEM to manufacture devices with the Symbian OS while they were contemplating
to adapt to newer Operating Systems.

1.7 WHAT WENT WRONG?

We will take use the 3 primary lenses which enable the process to analyze where Nokia
possibly went wrong. Nokia made choices, we feel, it shouldnt have and will note these in
our analysis below.

1.7.1 STRATEGY

Symbian OS was created by Symbian Ltd., which was a joint venture between Psion, and
phone manufacturers Ericsson, Motorola and Nokia. Symbion was the most popular
smartphone OS on a global average till Q4 2010 with Nokia having Symbian as the OS in its
all flagship phones. In June 2008, Nokia acquired Symbian Ltd. under a decision to make the
Symbian OS open-source platform so that more developers can use it to develop their mobile
apps. In February 2010, it was officially made available as open source code. But it was a
little too late as Android, which was already open-source and freely available, and iOS has

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already started to eat into Symbian market pie with their advanced platforms & a huge
number of support applications on the smartphones. On February 11, 2011 Nokia announced
partnership with Microsoft and carry their OS i.e. Windows OS in their smartphones. A study
in June 2011 showed that over 39% of the mobile developers using Symbian had planned to
abandon the platform for either Android or IOS. By June 2011,, Nokia had made a deal with
Accenture for Symbian based software development and support services through 2016
which also saw 2800 of Nokia employees moving base to Accenture.

1.7.2 TECHNOLOGY

Nokia was a pioneer of technology in mobiles and cellphones. Nokia came a long way to
reach that state, but only due to aging staff and technology could not stand to the new wave
of competition. Nokia had the Mobira series from 1982-1990 which were very popular during
its times. From 1990- 1999, Nokia sold the Original series of phones, which also saw the
inclusion of a newly developed GSM technology. Nokia later went forward to production
colour screen phones, digital camera featured phones and even music capable phones. Nokia
also had a gaming series of phones which were selling like hot pancakes amongst teenagers.
They indirectly took over Sonys walkman, Apples iPod and other related products market
share. Nokia later had business series phones with push email and other corporate benefitting
features.Later on they used to Symbian OS and were literally on top of the world with their
remarkably smart featured phones. But by this time, Nokia had reached the peak of its
research and development cycles. What they needed to do was to usher in a revolutionary
new technology to continue dominating the market after 2007. But this was brought in by a
new breed of engineers working at Apple and Google, who came up with iOS and Android
Operating Systems. Nokia still believed that it's Symbian OS was capable of fighting this
decision but eventually realized it were not worth the fight and started looking for new OS
partners. This was when Nokia decided to go out in the market to look for a partner for their
amazing hardware devices. After their tie-up with Microsoft for its Mobile Platform OS
Windows 7.5 Mango, Nokia launched the Lumia series, which featured revolutionary
hardware advancements. But by then Nokia was all stripped down of its glory.

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1.7.3 PEOPLE

We have mentioned above the various CEOs of Nokia and their valuable contribution to the
company. In September 2010, it was announced that Elop would take Nokia's CEO position,
replacing Olli-Pekka Kallasvuo, and becoming the first non-Finnish director in Nokia's
history. On 11 March 2011 Nokia announced that it had paid Elop a $6 million signing
bonus, compensation for lost income from his prior employer," on top of his $1.4 million
annual salary. As soon as Stephen Elop took over he sent an internal memo to his employees
which got leaked to the press. The memo dubbed as Burning platform was one of its kind
and regarded as one of the most ridiculous corporate memo. Below is a glimpse of its content.

1.8 REDRAFTING STRATEGIES:

In 2011, Nokia joined forces with Microsoft to strengthen its position in the smartphone
market.The strategic partnership saw Nokia dump Symbian OS and adopt the Windows
Phone operating system and establish an alternative ecosystem to rivals iOS and Android. But
it was too late.Under the leadership of the Stephen Elop, Nokia decided to stick to only and
only Windows OS while Android was a free alternative. Nokia launched Windows Phones
series dubbed as the Nokia Lumia. Fast-forward to 2013, Nokia has a full portfolio of great
Windows Phone 8 smartphones, from a 520 through the award-winning Lumia 920 and the
ground-breaking Lumia 1020, which enables photography never seen before in a smartphone.

In September 2013, Nokia announces that it has entered into an agreement with Microsoft
whereby Microsoft would purchase substantially all Devices & Services, the Nokia business
which makes mobile phones and smartphones.

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1.9 WHAT DID STEPHEN ELOP DO WORNG?

Inspecting with the organization and human performance lens

1.9.1WRONG DECISIONS:

While the entire smartphone OS industry was evolving, manufacturers moved on and adopted
various operating systems like Android, Windows, Bada, Meego, et cetera, Nokia decided to
stick to Windows OS only.As Android and iOS became more popular, Nokia and its windows
phones failed to attract any attention.Though the new technologies developed by Nokia were
ground breaking, they were not promising enough.

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1.9.2 RESULTS:

During the 3 years Elop was Nokia CEO, Nokia revenues fell 40%, Nokia profits fell 95%,
Nokia market share collapsed in smartphones from 34% to 3.4%.Nokia's credit rating went
from AAA to junk, Nokia's share price dropped 60% in value and Nokia's market
capitalization lost a minimum of $13 Billion in value.The Financial Times calculated that
Nokia shareholders ended up paying Elop a bonus of 1 million Euros for every 1.5 Billion in
market capital that Elop was able to destroy while Nokia CEO

1.9.3 RUMOR MILL:

Stephen Elop was working with Microsofts Business Division before moving to Nokia.He
was the first non-Finnish CEO of Nokia and it is argued that Stephen was sent with the sole
purpose of devaluating Nokia as to make it easier and cheaper for Microsoft to buy
it.Microsoft being a software giant always had ambitions to acquire a hardware sector firm
and as Nokia dipped to the bottom, Microsoft announced that it had bought Nokia for $7.2
Billion.While all this happened, Stephen comes back to Microsoft as VP of Microsoft's
Devices & Services business unit and gets a signing bonus of $25 Million

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1.10 STATEMENT OF THE PROBLEM

The statement of problem under this study is to know the challenges and the reasons
for the ffailure of nokia in the international industrial marketand to know the satisfaction
level of nokia mobiles among the people in coimbatore city with respect toR.S.Puram area by
taking 50 respondents . This study tries to figure out the problems and issues releated with
failure and prefrence level of buyers of nokia mobiles.

1.11 OBJECTIVE OF THE STUDY

The main objective of the study will be:

To know the reasons for the failure of nokia smart phones


To evaluate the prefrence level of nokia mobiles among the consumers
To figure out the problems and issues releated to the failure and downfall of nokia
mobiles.

1.12 SCOPE OF THE STUDY

The main scope of the study is to know the challenges and the reasons for the ffailure of
nokia in the international industrial market and to figure out the problems and issues releated
to the failure and downfall of nokia mobiles.

1.13 LIMITATIONS OF THE STUDY

An interpretation of this study is based on the assumption that the respondents have
given correct information.
As the study has been limited to 50 respondents, the analyses may not be exact or
accurate.
Besides the study has the limitation of time, place and resources.

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1.14 METHODOLOGY OF THE STUDY

RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problem. It may be


understood as a science of studying how research is done scientifically.In this study the
various steps are generally adopted, in studying the research problem along with the logic
behind them.

The study is basically an analytical study based on primary research and it is related
to the analysis of the attitude ofpeople towards the reasons for failure and prefrence
level of nokia mobiles among the consumers.In order to conduct this study, 50
respondents in R.S.Puram region(Coimbatore city) have been selected by sampling
method and mainly questionnaire has been used for collecting the data.

1.14.1 TYPE OF RESEARCH

This is a descriptive research where survey method is adopted to collect primary


information from the respondents using different scales as required and the required
secondary information for analyses.

DATA SOURCE

PRIMARY DATA

The primary data was collected from the respondents by administering a structured
questionnaire and also through observations, interviews and discussion.

SECONDARY DATA

Apart from primary data the secondary data is being collected through text books, journals,
from library, etc.

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1.15 DATA COLLECTION

Based on the results, the questionnaire was restructured. 50 samples were taken for the
research study.The data collected through the various sources was converted into readable
from through the process of classification, arrangement and presentation of data.

1.16 SAMPLING TECHNIQUE

1.16.1 SAMPLE SIZE

The population being large, the survey was carried among 50 respondents,who where
selected randomly. They will be considered adequate to represent the characteristics of the
entire population.

1.16.2 SAMPLE METHOD

The research was made by the survey in accordance to the convenience of the employees. So
the sample type is convenience sampling.

1.17 TOOLS FOR ANALYSIS

1.17.1 SIMPLE PERCENTAGE ANALYSIS

The percentage method is used for comparing certain feature. The collected data represented
in the form of tables and graphs in order to give effective visualization of comparison made.

Percentage = Number of respondents x 100

Total no.of respondents

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CHAPTER 2

2.1 REVIEW OF LITERATURE

The demand for smartphones is varied, thus the economy plays a crucial role in terms of
profitability for the smartphone and mobile industry. The recent economic downturn has
clearly affected all players in the industry and several have been forced to exit. The literature
review will therefore consider smart phone research and attitude research generally and will
briefly review research on smart phone and its failure on instruction to change racial attitudes
before examining the specific literature to produce attitude change regarding race relations.

Steinbock, 2010, p. 96

In 1992 Nokia was a conglomerate. It was growth driven and innovative in terms of
finding new growth opportunities, but it had no real focus, a low level of R&D, and no
heavy bets on new technology, it was focused on the Nordic countries [...]. It had a
verystrong, healthy engineering culture. (Steinbock, 2010, p. 96).

Abetti, 2000.

Nokia was also considered to have a highly entrepreneurial and innovative spirit and
was widely recognized for the ability to remodel corporate structure and focus when new
opportunities emerged (Abetti, 2000).

Schenker, 2007.

"Devices alone are not enough anymore,[...] consumers want a complete experience"
(Schenker, 2007)

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CHAPTER 3

3.1 DATA ANALYSIS AND INTERPRETATION

Based on the results,the questionnaire was restructured. 50 samples were taken for the
research study.the data collected through the various sources was converted into readable
form through the process of classification,arrangement and presentation of data.

ANALYSIS OF DATA

The term analysis refers to the computation of certain measures along with searching for
computation of relationship that exists among data groups.In the process of
analysis,relationship or differences supporting or conflicting with original.

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3.1 PERCENTAGE ANALYSIS

3.1.1 TABLE SHOWING RESPONDENTS AGE

AGE NO. OF RESPONDENTS PERCENTAGE

18 20 yrs 20 40

21 30 yrs 10 20

31 40 yrs 12 24

Above 40 yrs 8 16

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table indicates that out of 50 respondents 40% of respondents are aged from18 -20
years,20% of respondents are aged from 21 30 years,24% of respondents are aged from 31
40 years,and the 16% of respondents are aged above 40 years.

Therefore majority is 18 20 years of respondents.

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CHART 3.1.1

RESPONDENTS AGE
45

40
40

35

30

25 24

20 PERCENTAGE
20

16
15

10

0
18 20 yrs 21 30 yrs 31 40 yrs Above 40 yrs

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3.1.2 TABLE SHOWING THE RESPONDENTS GENDER

GENDER NO.OF RESPONDENTS PERCENTAGE

MALE 23 46

FEMALE 27 54

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table shows that out of 50 respondents 46% of respondents are male and 54% of
respondents are female..

Hence majority is female respondents.

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CHART 3.1.2

GENDER OF RESPONDENTS

46%
MALE
FEMALE
54%

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3.1.3 TABLE SHOWING THE RESPONDENTS EDUCATIONAL


QUALIFICATION

EDUCATIONAL NO.OF RESPONDENTS PERCENTAGE


QUALIFICATION

SCHOOL LEVEL 8 16

GRADUATE 17 34

POST GRADUATE 20 40

PROFESSIONAL 5 10

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table indicates that out of 50 respondents 16% of respondents have completed
their school level of education,34% of respondents are graduates,40% respondents are post
graduates and 10% of respondents are business professionals.

Therefore majority is 40% respondents of post graduates

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CHART 3.1.3

RESPONDENTS EDUCATIONAL LEVEL

10
16

SCHOOL LEVEL
GRADUATE
POST GRADUATE
PROFESSIONAL
40
34

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3.1.4 TABLE SHOWING THE OCCUPATION OF THE RESPONDENTS

OCCUPATION NO.OF PERCENTAGE


RESPONDENTS

BUSINESS 10 20

EMPLOYED 15 30

STUDENT 13 26

OTHERS 12 24

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table shows that out of 50 respondents 20% of the respondents does their own
business,30% of the respondents are employed ,26% of the respondents are students and the
rest of the respondents comes to others category.

Therefore majority is 30% of employed respondents.

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CHART 3.1.4

OCCUPATION OF RESPONDENTS

20
24

BUSINESS
EMPLOYED
STUDENT
OTHERS

30
26

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3.1.5 TABLE SHOWING THE RESPONDENTS MONTHLY


INCOME LEVEL

MONTHLY INCOME NO.OF RESPONDENTS PERCENTAGE


LEVEL

UPTO 5000 11 22

5000-10000 13 26

15000-20000 20 40

ABOVE 20000 6 12

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table shows that out of 50 respondents 22% of respondents income level is within
5000,26% of respondents level of income is between 5000-10000,40% of respondents level
of income is between 15000-20000 and 12% of respondents income level is above 20000.

Therefore majorityof respondents income level is ranging from 15000-2000

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CHART 3.1.5

RESPONDENTS MONTHLY INCOME LEVEL

12

22

UPTO 5000
5000-10000
15000-20000
ABOVE 20000

40

26

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3.1.6 TABLE SHOWING THE MEDIAS INFLUENCE IN BRAND


PREFRENCE OF MOBILES

TYPES OF MEDIA NO.OF PERCENTAGE


RESPONDENTS

TELEVISION 20 40

NEWSPAPER 10 20

INTERNET 18 36

OTHERS 2 4

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table shows that out of 50 respondents only 40% of respondents influnence their
brand prefrence through television,20% of respondents are influenced by newspaper,36% of
respondents through internet and rest of the respondents are influenced by other sources

Therfeore majority of respondents are influenced by the television ads

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CHART 3.1.6

MEDIAS INFLUENCE IN BRAND PREFRENCE OF


MOBILES

40
TELEVISION
36
NEWSPAPER
INTERNET
OTHERS

20

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3.1.7 TABLE SHOWING CONSUMER PREFRENCE LEVEL ON


MOBILE PHONES

MOBILE PHONES NO.OF RESPONDENTS PERCENTAGE

NOKIA 8 16

SAMSUNG 20 40

MOTOROLA 10 20

OTHERS 12 24

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table shows that out of 50 respondents only 16% of respondents prefer nokia
mobiles,40% of respondents prefer samsung smart phones,20% of respondents prefer htc and
motorola and 12% of respondents prefer other smart phones.

Therefore majorityof respondents prefer samsung smart phones

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

CHART 3.1.7

RESPONDENTS PREFRENCE LEVEL ON


MOBILE PHONES

16
24

NOKIA
SAMSUNG
MOTOROLA
OTHERS

20
40

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

3.1.8 TABLE SHOWING THE RESPONDENTS REASONS TO


PREFER NOKIA

REASONS NO.OF RESPONDENTS PERCENTAGE

STORAGE 5 10

BRAND NAME 15 30

BATTERY LIFE 20 40

PRICE 10 20

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table shows that out of 50 respondents only 10% of respondents prefer nokia
mobiles for storage purpose,30% of respondents for brand name,40% of respondents prefer
for battery life and 20% of respondents prefer for the price

Therefore majorityof respondents prefer nokia only for its battery life span

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

CHART 3.1.8

RESPONDENTS REASONS TO PREFER NOKIA

10
20

STORAGE
BRAND NAME
30
BATTERY LIFE
PRICE

40

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

3.1.9 TABLE SHOWING THE RESPONDENTS EXPECTATION OF


NEW FEATURES TO BE DEVELOPED IN NOKIA MOBILES

FEATURES TO BE DEVELOPED NO.OF PERCENTAGE


IN NOKIA RESPONDENTS

OS 25 50

CAMERA/VIDEO QUALITY 10 20
CAPABILITIES

TECHNICAL 11 22
CAPABALITIES(RAM,PROCESSOR)

AVAILABILITY OF APPLICATION 4 8

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table shows that out of 50 respondents maximum of 50% of respondents prefer
that the os of nokia mobile should be changed and developed,20% of respondents prefer the
video and camera quality should be developed,22% of respondents prefer the technical
capabilities to be developed and rest of the respondents prefer the applications in the nokia to
be updated.

Therefore majority of respondents prefer nokias OS should be changed

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

CHART 3.1.9

RESPONDENTS EXPECTATION OF NEW


FEATURES TO BE DEVELOPED IN NOKIA
MOBILES

OS
22
CAMERA/VIDEO QUALITY
CAPABILITIES
50
TECHNICAL
CAPABALITIES(RAM,PROCESSOR)
AVAILABILITY OF APPLICATION

20

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

3.1.10 TABLE SHOWING THE RESPONDENTS REASONS FOR


THE NOKIAS LOSS OF REPUTATION AND BRAND IMAGE

REASONS OF NOKIA NO.OF RESPONDENTS PERCENTAGE


DOWNFALL

LIMITATIONS OF 5 10
APPLICATIONS

LACK OF INNOVATION 12 24

OS IS NOT EASY AS 20 40
ANDROID

NO SLIM MODEL 13 26

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table shows that out of 50 respondents 10%of respondents prefer the nokias
downfall is because of limitations in apps,24% of respondents felt that it is because of lack of
innovations in the product,40% of respondents felt that because OS is not that easy as android
and rest of the respondents felt that it is not updated with new slim models of smart phones

Therefore majority of respondents felt that because of OS is not that user friendly like
android.

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

CHART3.1.10

RESPONDENTS REASONS FOR NOKIAS LOSS OF


REPUTATION AND BRAND IMAGE

10

26

LIMITATIONS OF APPLICATIONS
24
LACK OF INNOVATION
OS IS NOT EASY AS ANDROID
NO SLIM MODEL

40

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

3.1.11 TABLE SHOWING THE REASONS FOR DECREASING


DEMAND OF NOKIA MOBILES AMONG THE RESPONDENTS

REASONS FOR NO.OF RESPONDENTS PERCENTAGE


DECREASING DEMAND

SYMBIAN TO 22 44
MICROSOFT OS

LACK OF UPDATIONS IN 10 20
TECHNOLOGY

NO LATEST FEATURES 12 24

OTHER REASONS 6 12

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table shows that out of 50 respondents 44% of respondents prefer the decreased
demand is because of symbian to microsoft os,20% of respondents felt that it is because of
lack of updations in technology ,24% of respondents felt that because of no new features and
rest of the respondents felt because of other reasons

Therefore majority of 44% of respondents felt because of symbian to microsoft os

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

CHART 3.1.11

REASONS FOR DECREASING DEMAND OF NOKIA


MOBILES AMONG THE RESPONDENTS

20

SYMBIAN TO MICROSOFT OS

24 LACK OF UPDATIONS IN
TECHNOLOGY
36
NO LATEST FEATURES

OTHER REASONS
44 12

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

3.1.12 TABLE SHOWING THE RESPONDENTS DEMAND FOR


OTHER SMART PHONES AFTER NOKIAS DOWNFALL

SMART PHONES NO.OF RESPONDENTS PERCENTAGE

SAMSUNG 23 46

SONY ERICSON 10 20

MOTOROLA 12 24

HTC 5 10

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table shows that out of 50 respondents 46% of respondents prefer samsung
mobile,20% of respondents prefer for sony ericson,24% of respondents prefer motorola and
rest of the respondents prefer htc

Therefore majority of 46% of prefer samsung mobiles.

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

CHART 3.1.12

RESPONDENTS DEMAND FOR OTHER SMART


PHONES AFTER NOKIAS DOWNFALL

50
46
45

40

35

30

25 24
PERCENTAGE
20
20

15
10
10

0
SAMSUNG SONY ERICSON MOTOROLA HTC

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

3.1.13 TABLE SHOWING THE RESPONDENTS REASONS FOR


SAMSUNG CAPTURING OF NOKIAS MARKET SHARE

FEATURES OF SAMSUNG NO.OF RESPONDENTS PERCENTAGE


MOBILES

ANDROID OS 22 44

NEW APPLICATIONS 10 20

LOOK ALIKE SLEEK 12 24


MODEL OF I PHONES

LATEST FEATURES 6 12

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table shows that out of 50 respondents 44% of respondents prefer samsung mobile
for android os,20% of respondents prefer for new applications,24% of respondents prefer for
look alike sleek model of I phones and the rest of the respondents prefer for updated features

Therefore majority of 44% of prefer samsung mobiles for android os

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

CHART 3.1.13

RESPONDENTS REASONS FOR SAMSUNG


CAPTURING OF NOKIAS MARKET SHARE

12

ANDROID OS

44 NEW APPLICATIONS
24
LOOK ALIKE SLEEK MODEL OF I
PHONES
LATEST FEATURES

20

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

3.1.14TABLE SHOWING THE RESPONDENTS REPUTATIONS AND


QUALITY OF THE PRODUCT SERVICES

QUALITY SEVICES NO.OF RESPONDENTS PERCENTAGE

NOKIA 6 12

SAMSUNG 12 24

MOTOROLA 24 48

OTHERS 8 16

TOTAL 50 100

SOURCE : PRIMARY DATA

INTERPRETATION:

The above table shows that out of 50 respondents only12% of respondents are satisfied with
the services of nokia,24% of respondents are satisfied wth samsung,48% of respondents
prefer motorola and rest of the respondents are satisfied with the services of other brand of
mobile phones

Therefore majority of 48% of respondents prefer motorola mobile services

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

CHART3.1.14

0
12
16

QUALITY SEVICES
NOKIA
24
SAMSUNG
MOTOROLA
OTHERS

48

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

CHAPTER 4

FINDINGS AND SUGGESTIONS

FINDINGS:

From this study it is found that nokia failed because of complacency,lack of


innovation and symbian to windows
If analyzed through the Technology Lens, Nokia primarily failed to innovate
attractive technology and features.
From the study it is found that majority of respondents are from 18-20 yrs age group.
It is found that 40% of respondents prefer nokia only because of its battery life.
50% of respondents expect nokia to chnge its operating softwre.
40% of majority of respondents strongly agredd that nokia s os is the reason for its
loss of brand name and reputation
44% of respondents felt that nokias downfall is the reason for the samsung capturing
the market share.
For example, though Nokia had touchscreen phones, it did not attract customers as
much as compared to Apple iPhones.
The software being developed were using old development models and newer
concepts such as User Experience and User Interface were being neglected.
Nokia was clinging onto Symbian OS for too long. It had reached its peak.
With the company facing fierce competition, Nokia started reporting financial losses
and started loosing grip on the market.
Olli-Pekka Kallasvuo, as President and CEO, saw the company's rise to become the
world's preeminent mobile brand but was also at the helm as Nokia fell distantly
behind a new wave of competition.
He was seen off by the management and he was succeeded by Stephen Elop on
September 21, 2010
During the 3 years Elop was Nokia CEO, Nokia revenues fell 40%, Nokia profits fell
95%, Nokia market share collapsed in smartphones from 34% to 3.4%

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

The nokia was also identified with the weakness of Low voice quality Less stylish in
low priced products,Heavy sets.Unlike iPhone Apple, Nokia N-series is complex,
tough and not user friendly.
At the right time samsung placed its bet on android os for smart phone and
concentrated in its look and many new features was introduced
When it first launched in the market it was praised as look alike model of apple I
phones and because of that nokias share was replaced by samsung mobile in the
global market.

SUGGESTIONS:

After a scan of the internal and external environment we can clearly understand the current
and future competitive environment of Nokia. in addition, the following recommendations
may help Nokia and Microsoft to maintain their competitiveness vis--vis key competitors.

Retain dominance in developing markets by reshaping the Nokia Brand


Nokia Siemens Networks division to exploit the growth of 4G
Leverage Nokia/Microsoft (MicroKia) partnership and offer a strong alternative to
RIM Blackberry before the end of 2012.
Create the perfect mobile solution for the corporate world by leveraging Microsoft
Enterprise solutions as well as solid finance.
Research in Motion is a simple target for the two giants, Microsoft and Nokia, and
this segment is highly profitable.
Apple and Samsung have no specific interest or strength to react to this niche
attack.
By entering the corporate world, Nokia/Microsoft will be able to attract developers
that are interested in selling high value applications to organisations.

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

CHAPTER 5

CONCLUSION

On the basis of this dtudy it is understood that the role of Stephen Elop is the contributing
factor in the failure of Nokia as a company. The conspiracy theory states that even though
Stephen Elop came from Microsoft to Nokia but against all the ethical rules of
professionalism but he continued to make decisions which were beneficial for Microsoft. The
argument is supported by the facts and statistical data given in the paper on how Nokia went
on a downward spiral after Stephen Elop joined as the CEO. His decisions of only carrying
the Windows operating system in all of their phones & abandoning all other operating
systems did no good for the companys performance in the business. His decision of not
going for the Android OS after Symbian while the other mobile carriers such as Samsung,
Sony Ericson did, eventually led to Nokia losing a major market share. The sales of Nokia
dropped over the period of his tenure which eventually led Nokia being sold to Microsoft. So
the research in this paper digs deeper into the role of Stephen Elop is the downfall of Nokia.
We wonder what would have been if Nokia would have embraced Android as it is the biggest
smartphone operating system in the world by far. Soon after being sold to Microsoft, ousted
employees are on the look for investors to manufacture same quality hardware devices with a
variety of Operating Systems other than Windows. Despite its strong position, Nokia lost out
to new entrants who emerged as the mobile industry converged with adjacent digital
industries. The company did not only fail to beat these new entrants in bring market leading
innovations to the market in a timely manner, but also failed to respond appropriately to
threats posed by the innovations produced by its new competition.

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A STUDY ON NOKIAS FAILURE IN THE GLOBAL MARKET AND 2015
CONSUMER PREFRENCE LEVEL TOWARDS NOKIA

BIBLIOGRAPHY

BOOKS

Hamel, G., & Prahalad, C. K. (1994). Competing for the future Harvard Business
Review, 72(4), 122
J P. Herring (1999) Key Intelligence Topics: A Process to Identify and Define
Intelligence Needs" Competitive Intelligence Review, Vol. 10(2) 414 John Wiley &
Sons, Inc.

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