1.

Problem Statement
Nokia has experiences a decrease in market share over the years. While it still
remains the market leader in the mobile industry it is having a hard time keeping up
with the competition.

Symptoms

Lower/decreasing market share compared to 2008

Nokias smartphone operating system use and selection is disorganized
Employees are less motivated
Customer complaints about products and services

In the following figure a large difference can be seen in sales between 2008 and
2009. At the end of 2010 a small recovery can be seen in the net sales figures but
this is considerably lower compared to the ones in 2008.

Interpretation 1
This
figure

displays the market shares of the smartphone OS brands within a 3 year time
frame. Nokia is known for using the Symbian OS on most of its smartphone models.
The Symbian market share is decreasing slowly through these years to the fierce
competition.
The decrease in Symbian OS sales can be linked to Nokias sales volume. This is
mostly due to the customer perception of the OS, (but this can be clarified via the
fact finding methods).
Interpretation 2

Sales Eur(M)
60000
50000
40000

Sales Eur(M)

30000
20000
10000
0
2008

2009

2010

This figure shows the net sales of Nokia (for all regions). When comparing 2008
sales with 2009 and 2010 there is a drop of 20% in sales. So we can conclude that
the company has experienced a drop in its sales volume.

Interpretation 3
To get a better view of this problem with in depth details the sales of each region for
2010 are shown in this table.
Region

Sales
(EUR M)
7 149
2 952
2 019
1 744
1 630
1 506
1 470
1 313
1 266
1 157

China
India
Germany
Russia
USA
Brazil
UK
Spain
Italy
Indonesia

Histogram

Frequency

8
7
6
5
4
3
2
1
0

Frequency

Bin

If we analyze this data via a histogram we can see that while China has the largest
sales volumes but if we consider the average quantity of sales that a region makes
it is in-between 1756 2355 (EUR M) as the frequency for this group is high in the
histogram.
Sri Lanka belongs to the India region as most of the suppliers are located there. Still
it is within the range of the histogram

Stakeholders involved

Customers
Employees
Management staff
Suppliers
Shareholders
International organizations
Governments
Academic institutions

Customers
Customer may experience problems with some Nokia products. The reasons for
these complaints are not specifically to Nokia as a company but they are mostly
related to the Symbian OS used on the phones in the portfolio. The customers
expect more value from the products as Nokia is the market leader in this industry.
Nokia increasingly engages with customers on issues related to sustainability.
Network operators are there biggest customers. They expect for the company to
meet high standards of corporate responsibility in the supply chain. Nokia continues
to receive enquiries and assessment requests about social and environmental
performance from our operator customers. They respond to those requests through
our normal customer account management interface.
The key issues for both trade customers and consumers are product quality,
satisfaction with Nokia products and customer service. Nokia regularly survey our
trade customers to measure satisfaction levels. They engage with consumers
through our Nokia Care support service both online and via call centers, as well as
via consumer satisfaction surveys and independent market research.
Employees
Employees in the sales level may feel less motivated as they may think that the
reward they get for the amount of work they do is not sufficient. This may be in
terms of salaries or simply perks in the job.
It is important to create a working environment with opportunities for
communication and feedback. Nokia regularly involves employees in discussions
about issues such as corporate values, career and competence development,
performance, diversity and work-life balance.

Management staff
These employees at higher levels in the organization may be worried due to the
complaints received from customers or even a small decrease in market share as
this can affect the company. They as decision makers of the organization can
develop and select solutions for these problems.

Governments
Nokias Code of Conduct which was first created in 1997 was revised in 2009. It sets
out how the company will behave in all business activities, including our
engagement with governments.
Nokia believes it is important to participate in the development of fair and
reasonable regulation that provides a framework for sustainability requirements and
creates incentives for voluntary environmental and societal improvements. This
organization engages with governments all over the world on a wide range of issues
relevant to business.
International organizations
Nokia believes in collaboration with others can be the most effective way to
approach certain issues. Nokia works in collaboration with other companies on key
issues through a number of industry organizations, such as:

The Global eSustainability Initiative (GeSI): Participating in the Supply Chain

Working Group, e-Waste Working Group and Climate Change Working Group
The Electronics Industry Citizenship Coalition (EICC): The EICC collaborates
with the GeSI Supply Chain Working Group on a number of different supply
chain activities
International Chamber of Commerce (ICC)
World Business Council for Sustainable Development (WBCSD)

Academic institutions
Nokia sponsors many research associations, industrial and academic partners. Their
goal is to strengthen co-operation between our researchers and academics. This can
also help in indemnifying the demographics of its users and plays a large role in
research and development.

Stakeholder Map

Get Concerns
Customers

Key

Management staff

Employees

Academic institutions

Suppliers

Shareholders

Government

International organizations

Keep Informed

To easily manage the stakeholders we need to prioritize them according to their

importance when making decisions.
High Priority All the Key players will be included in this category (Customers,
Employees, and Suppliers). The primary focus should be given to the customer as
Nokia is a market oriented organization and it needs to satisfy the needs of its
customers to the best possible extent.
Normal/Medium Priority Get Concerns stakeholders will be in this group. It is not
necessary to maintain the same level of priority of the Key players group but still
maintain some kind of relationship with them and get their input (feedback) too.

Low Priority : This includes the Keep Informed and ignore groups, there is no need
for much interaction with these groups so keeping them satisfied is the only task
when concerned with these groups. Organizations usually have a responsibility
towards stakeholders (i.e. Government).

Scope of the problem

Primary scope of this business problem is limited to Nokia care showrooms
in Kandy, Sri Lanka.
Data can be collected by the stakeholders within this region to analyze and solve
this problem.
Stakeholders affected by the problem
Customers
The problem affects the customers to some extent too as there are complaints
about different products. Some customers maybe dissatisfied with the OS or some
other functionality of the device. Nokia has a good customer base and they provide
good customer care and after sales service.

Segmentation Map
The Nokia product portfolio is a large one. All Nokia products are not targeted for a
single segment. (Differentiated targeting)There are ranges of series available within
this portfolio. This diagram shows the segmentation for Nokias N series, E series,
and Xpress Music devices. The reason for selecting these series is because they all
use the Symbian OS in the phones.

Rural

Urban

Xpress Music

Suburban

0
N Series

Below 18

E Series

18-25

25+

This segmentation map can give us an idea of Whom to target when in the Data
collection phase as customers are an important stakeholder group to consider when
making decisions.
The total net sales of Nokia will reflect sales of all these different series, so each
group does contribute to the final sales figures. Data needs to be collected by users
of these devices to get their feedback.

2. Identifying Alternatives
To identify the alternatives available to the company an analysis of internal and
external factors can be done to identify the environment for this industry. In a
competitive industry like Mobile phones identifying different factors in the
environment in depth can be helpful when trying to make a good business decision.

SWOT Analysis for Nokia

Strengths

Has high potential as a cooperate brand

Have complex and simple products in its portfolio, so this increases its
competitive advantage.
Maintains a high market share and a good customer base
Phones are stylish in design and have a fashion statement

Good marketing activities and promotional activities.

Weaknesses

Products are often highly priced

Finds it hard at keeping up with other brands in the industry is high as it is a
competitive market
Phones lack features when compared to other brands in the market. (i.e.
Android phones by Google offer more advanced features than Symbian from
Nokia)
Products usually have high development time before release to market.

Opportunities

Expansion of products into regions like US, and Latin America.

Providing more value to customers by offering advanced features with fewer
issues.
Targeting more customer segments
New growth markets

Threats

Fierce competition from other brands like Sony Ericsson, Samsung and Htc.

PESTLE Analysis for Nokia

Political
As markets are more free from imposed political limitation, Network operators and
phone manufacturers are free to act independently of government intervention. In
Countries like India and China where Partial regulations exist, government
intervention does take place.

Economic
According to the Central bank report the current inflation rate is 6.6%.
The inflation rate plays a role in the sales process. When peoples incomes are
rising, they have more disposable income; this enables consumers to be more

selective with when selecting mobile phones. They may look to other factors (i.e.
Web browsing, Cameras) rather than fulfilling the most basic of user needs (text
messaging and phone calls) and price being such a key factor.

Social
The society of the country plays a role in the buying behavior of customers too.
Recently there is more demand for social networking through the internet. This
creates an increased need to communicate from home, work or on the move.

Technology
There are many improvements and developments in the communication industry
like 3G and 4G networks support by most mobile phone manufactures these days.
The displays on the phones are changing to super AMOLED ones that can display
colors better. Nokia has included and utilized these trends to a certain extent in
their existing product portfolio.

Legal
Laws concerning mobiles phones include the texting and driving law which
considers texting/calling while driving illegal. Nokia and other mobile manufactures
realize this risk and enable features like hands free calling and voice recognition
features in the handsets so that driving can be more safe as well as comply with
this kind of laws.

Environmental
This is an important aspect to many companies these days as there is a trend that
most companies are going green in an effort to protect the environment. Nokia
promotes its users with its Eco friendly features via energy efficiency, and
ecofriendly packaging and materials for mobile phones. This includes asking the
user to unplug the charger from the power source to save current.

Porters 5 forces
Threat of New Entrants: Low

Bargaining power of Customers : Hi

Bargaining power of Suppliers: Low
Apple
Sony Ericsson, Samsung, HTC, LG, Motorola,
Industry rivalry: Intence

Threat of Substitutes: High

Bargaining Power of Customer

The bargaining power of the customers can be considered high as there is a wide
range of choices available market today. In this competitive market, the devices are
priced competitively. The information available to a customer about a device is also
more today due to the internet and the reviews posted in blogs and web sites about
the product; this can be another factor for the bargaining power to be high.
Bargaining Power of Suppliers
Nokia requires raw materials for the manufacturing of its devices, as this is a
multinational organization it has a range of suppliers to supply the required

elements for production. These elements necessary are not only physical materials
but also include software requirements for the devices. So they do not depend on
only one supplier for these needs. This makes the bargaining power of suppliers low.
Threat of Substitutes:
This factor is high due to the intense competition from other leading brands in the
industry like Sony and Samsung. Companies like Sony Ericsson are growing at a fast
rate to keep up with the competition today. This makes the choices available to the
customer extremely diverse.
Threat of New Entrants:
This factor is low as it is not practical/or a good business decision for new mobile
phone companies to enter the market when the competition is this fierce due to the
large amount of capital needed, and product diversification factors.

Alternatives available for Nokia

Change the OS used on the phones to one that customers need, and satisfies
these specific needs that offer more diversity in products.

Today if we look at Nokias mobile phone portfolio, it is hard to see much

diversity/change in the products. This is mainly in terms of the OS used on the
phones as the Symbian S60 OS is used on 90% of the existing models of devices.
Doing so has some advantages and some disadvantages as while Symbian is a
system that can get the task done it lacks performance compared to other
systems in the market. Using the same system in all the phones can also make the
user bored or uninterested with the device. Ex: A high end phone like the N97 uses
Symbian same as a mid-range/mainstream one like a 6120c which reduces the
value that the customer gets.
Nokia care Kandy in Sri Lanka would have no control over this factor; however it is
important for these problems to be identified, to develop better solutions for the
organization as a whole in the future. The Nokia sales in Sri Lanka are represented
by the India region in the following table.
Region
China
India
Germany
Russia
USA
Brazil

Sales
(EUR M)
7 149
2 952
2 019
1 744
1 630
1 506

UK
Spain
Italy
Indonesia

1
1
1
1

470
313
266
157

Competitive Strategies
Michael Porter suggested four "generic" business strategies that could be adopted
in order to gain competitive advantage.

Nokia cab select a Differentiation focus strategy, where the business goal would
be to differentiate within just one or a small number of target market segments
as Nokia products need more Uniqueness to them. The special customer needs
of the segment mean that there are opportunities to provide products that are
clearly diverse from competitors.

3. Criterion for evaluation

The organizations strategic management criterias needs to be considered at this
point when solving this business problem.

Cost
Time
Quality

All three of these factors need to be satisfied to get the perfect or the best solution
to a business problem, but due to limitations of any one of these factors some
compromises may need to be made.

Priority for Nokia problem solving

Constraint

Enhance

Accept

Cost
Time
Quality

This diagram can illustrate the priorities that need to be considered when solving
this problem. The quality is set to enhance as a quality analysis is needed. The time
is constraint as there is a limited time period to give a solution which is 2 months.
The cost is in the Accept category which means any amount of cash can be
dedicated towards solving this problem as required. Even though a large amount of

cash may have to be dedicated to this task the return on investment once this
problem is solved would be high due to increase in sales/market share.

Key Stakeholders

In the stakeholder map the Key stakeholders are a good area to focus on when
making decisions as they are highly interested and motivated. So it is integral for
their needs to be considered, and not to miss any key stakeholders in the process.
So when developing a solution to this business problem we should try to satisfy
them as much as possible.

Objectives
The objectives of the project may be different according to the stakeholders
concerned as the perception of success may be different from stakeholder to
stakeholder and they may have diverse needs and wants.
Customers
To have high quality of products that give good performance and value for cash, and
also a range of different products to select from.
Management
To see a 10% increase in sales within 2 quarters by developing a solution to the
current problem and by implementing a new business strategy.
Employees
To get more benefits from the job and progress in career (offering more career
mobility) through career development and demonstrating skills.
Suppliers

Profit maximization by reaching high sales volume and receiving timely payments
from the organization.

Providing Insight to some concepts

Throughout the data collection phase of this project some comments about Nokia
can be analyzed too. These include press releases and some articles on the web as
follows.
Nokia Popularity Fading Among Teenagers?
In 2009, 21% of teens named Nokia the number one favorite, compared to 29% in
2008.
I think the drop in the ranking reflects the fact that Nokia does not have really cool
phones at the moment; said Gartner analyst Carolina Milanesi.
Attracting teens is key at different levels: safeguarding replacement cycles
opportunity as well as attracting possible consumers of content, she added.
Sony Ericsson is number two globally and number one in nine countries
including Austria, Germany and the UK, up from eight countries last year.
Younger users are important because they can be opinion-leaders and trendleaders. Nokia will need to discover why its market share has been slipping, said
Neil Mawston from Strategy Analytics.
(symbian-freak.com Nokia_popularity_fading_among_teenagers.htm)

This article is related to the global Nokia market, so it is difficult to draw up

conclusions about whether the same criteria would appeal to Sri Lanka too. During
the data collection phase we can address this issue too by collecting data from the

teenage user groups in the Kandy region. Teenagers are an important group of
customers as they contribute to the sales volume of phones significantly today, so
when analyzing the reason for the drop in market share this can be a factor to focus
on too.

4. Data collection
Data collection plan
There are some factors that need to be analyzed when collecting data as we need
to know the type of information that we need from each stakeholder.
Objectives

The purpose of this data collection plan is to obtain information within 2

weeks from the stakeholders about the business problem via some fact
finding techniques.

To obtain an accurate image of this problem through the stakeholders

perspective (i.e. Customers perception of the problem).

To help the research and develop teams (or decision makers) to obtain more
insight to the reasons for a decrease in market growth by analyzing collected
data.

Scope
The following plan will focus attention on the key stakeholders section of the
stakeholder map. Data will be collected from customers of Nokia (in Kandy region)
and employees working of Nokia Care Kandy.
As it is not practical to collect data from All customers in Kandy Some groups are
selected.

Teenagers
Young adults

Target data
The data that is collected after this phase will need to answer the following
questions:
Customers

Why people love Nokia as a brand?

Why are customers dissatisfied with the current OS available currently on the
devices, or are they really not satisfied with the product?

What are the areas (features, functionality) that need to be improved in the
future?

Employees

What motivates them to perform better in their work?

Fact finding techniques

There has to be a type of method to use to collect data from these stakeholders.
There are a range of fact finding techniques available to achieve this task, each of
them may have its own advantages and disadvantages, so we need to select one
that will be practical to use according to the criterias.

Interviews
Questionnaire
Observations
Document/report reviews

Selecting a fact finding technique

Questionnaires can be selected to gather data from customers and employees.
The reasons are:

It is easier to use Questionnaires when dealing with a large target audience

(i.e. Customers).
Very cost effective when compared to face-to-face interviews, especially in

large geographic areas.

Consumes less time than interviews, this is useful when dealing with a large

group of people.
Questionnaires are familiar to most people as Nearly everyone has had some
experience completing questionnaires and they generally do not make people

apprehensive.
Reduces biasness as the researcher's own opinions will not influence the

respondent to answer questions in a certain manner.

The results of the questionnaires can usually be quickly and easily quantified
by either a researcher or through the use of a software package

Sampling
Sampling is a process of selecting a subset of individuals from within a population to
obtain some knowledge about the whole population.
There are different types of sampling such as

Simple random sampling

Stratified sampling
Systematic sampling
Quota sampling
Cluster sampling
Multistage sampling

Sampling Frame
The sampling frame for this data collection plan includes all the Customers and
employees of Nokia within the Kandy region. From this frame we can extract a
sample to collect data.

Selecting a sampling technique

Factors that influence the choice of the sampling
A variety of sampling methods can be employed, individually or in combination.
Factors commonly influencing the choice between these designs include:

Nature and quality of the frame

Availability of auxiliary information about units on the frame
Accuracy requirements, and the need to measure accuracy
Whether detailed analysis of the sample is expected
Cost/operational concerns

Cluster sampling can be selected by based on the above factors for evaluation.
The reasons are:

Is more cost effective than some other methods ( i.e. Saving of travelling time

and expenses, administration costs)

Instead of sampling an entire country or region like when using simple
random sampling, the researcher can allocate limited resources to the few

randomly selected clusters or areas when using cluster samples.

The researcher can also increase his sample size with this technique.
Considering that the researcher will only have to take the sample from a
number of areas or clusters, he can then select more subjects since they are
more accessible.

All the other probabilistic sampling methods (like simple random sampling, stratified
sampling) require sampling frames of all the sampling units, but cluster sampling
does not require that. Once the clusters are selected, they are compiled into frames.
Now, various probabilistic researches and observations are performed on these
frames and required conclusions are drawn.

Clusters in Nokia data collection plan

Ex: Cluster Teenagers

Ex: Cluster Young Adults

Sampling Frame Kandy

Region

http://www.experiment-resources.com/cluster-sampling.html#ixzz1QjabMeBX

Questionnaires
Customers Sample
1. What is your age?
a. Below 18
b. 18-25

c. 25-35

d. Above 35

2. Do your own any Nokia products?

a. Yes
b. No
3. Are you satisfied with its performance/features?
a. Not at all
b. No
c. Somewhatd. Yes

d. Very much

4. It is easy to use my Nokia phone and is user friendly.

a. Strongly disagree
b. Disagree c. Neural
d. Agree
agree

e. Strongly

5. Nokia phones provide me with a wide range of choices in selecting phones.

a. Strongly disagree
b. Disagree c. Neural
d. Agree
e. Strongly
agree
6. The price of Nokia phones is affordable.
a. Strongly disagree
b. Disagree c. Sometimes
Strongly agree

d. Agree

e.

7. On a Scale of 1 to 10 how would you rate your knowledge about

computers/phones?
8. Does the currently used Symbian OS (operating system) on the phones cover
all the new features found on phones?
a. No it doesnt
b. To some extent c. It does
9.

If Nokia were to change its OS used on the phones, which one would you
prefer?
a. Android
b. Windows Phone c. MeeGo (Linux based)
d. Other (Please specify)

10.How important are new features like 4G connectivity?

a. Not at all important
b. Not important
c. Neutral
e. Very Important

d. Important

11.What are the features that you would like to see improved/included in future
models of Nokia?

Thank You for your feedback!

Employees Sample
1. What is your age?
b. Below 18
b. 18-25

c. 25-35

d. Above 35

1. What is your educational background?

a. Student b. After AL c. Graduate d. Post graduate
2. What are your working hours?

3. How satisfied are you with your job role?

a. Very Dissatisfied
b. dissatisfied
e. Very satisfied
4. Do you like your current position in the company?
a. Hate it
b. Do not like
c. Neural
d. Like

c. Neutral

d. Satisfied

e. Very Much

5. How would you rate your performance in the company when given a task?
a. Reduced
b. Not good
c. Neutral
d. Good
e.
Very Good

6. How easy is it to perform your tasks in the company on a daily basis?

a. Very Hard
b. Hard
c. Neutral
d. Easy
e. Very easy
9. Any other criteria that you would like to see improved (in the organization)in
the future? (Please specify)

10.What motivates you to achieve more in your work? (Please specify)

Thank You for your feedback!

Online Surveys

To investigate the teenage segments market share loss an analysis has been
conducted online through a social networking web site. Facebook is used here as it
allows users to ask questions and queries and provide any number of variable
options for the answers.
I think this is an effective way to test the teenage market share as this type of users
use the social networking the most, so this makes it an efficient way to target them
and to make getting the feedback a little interesting. The options for the MCQ
question/statement were Strongly disagree, Disagree Neutral, Agree, and Strongly
agree. These options are the default as they offer a balanced scale offering
maximum variability.
When analyzing the input received from 31 respondents (within the teenage group)
the highest rated option was the Neutral one, Strongly disagree as 2 nd and
Disagree as 3rd. This does indicate that the Symbian OS does lack some features
and it can be considered the reason for the market share drop of teenage users in
the Kandy region too as no one answered in the Agree or Strongly Agree
categories. It is safe to say the OS just manages to get the job done and the
minimal expected from a smartphone as there is a high Neutral option too.
When analyzing the trend in the smartphone market today other operating systems
and manufacturers offer more advanced features to its users like 4G connectivity,
advanced web browsing, Music recognition, and even bar code scanning. Out of
these features Symbian has yet to demonstrate any of them to the scale of its
competitors. So we can conclude that there is a reason for Symbian phones to lag in
terms of sales in this type of a fierce market.
This does not mean that there is anything wrong with the physical Nokia devices (or
hardware) , but the software is an element that needs to be improved to see an
increase in market share.

20
18
16
14
12
10

No of respondents

8
6
4
2
0
Strongly Disagree

Neutral

Strongly Agree

//inc relationship between market share and teenage usage