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

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 3To 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)

China7 149

India2 952

Germany 2 019

Russia1 744

USA1 630

Brazil 1 506

UK 1 470

Spain 1 313

Italy 1 266

Indonesia 1 157

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 institutionsCustomersCustomer 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.EmployeesEmployees 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 staffThese 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.

GovernmentsNokias 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 organizationsNokia 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 institutionsNokia 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 MapGet Concerns

Keep Informed

Key PlayersCustomers

Employees

Management staff

GovernmentAcademic institutionsSuppliersInternational organizationsShareholders

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 problemCustomersThe 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 MapThe 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.UrbanSuburban

RuralBelow 1818-2525+0N Series

Xpress MusicE Series

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

PESTLE Analysis for Nokia

PoliticalAs 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. SocialThe 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. TechnologyThere 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.LegalLaws 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. EnvironmentalThis 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 forcesBargaining power of Suppliers: Low

Bargaining power of Customers : HighThreat of Substitutes: HighThreat of New Entrants: LowSony Ericsson, Samsung, HTC, LG, Motorola, AppleIndustry rivalry: Intence

Bargaining Power of CustomerThe 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 SuppliersNokia 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 Sales (EUR M)

China7 149

India2 952

Germany 2 019

Russia1 744

USA1 630

Brazil 1 506

UK 1 470

Spain 1 313

Italy 1 266

Indonesia 1 157

Competitive StrategiesMichael 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 QualityAll 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.CustomersTo have high quality of products that give good performance and value for cash, and also a range of different products to select from. ManagementTo see a 10% increase in sales within 2 quarters by developing a solution to the current problem and by implementing a new business strategy.EmployeesTo get more benefits from the job and progress in career (offering more career mobility) through career development and demonstrating skills.SuppliersProfit 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 trend-leaders. 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 dataThe 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 techniquesThere 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 techniqueQuestionnaires 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 packageSampling 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 samplingSampling FrameThe 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 techniqueFactors 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 concernsCluster 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

Sampling Frame Kandy Region Ex: Cluster Young Adults Ex: Cluster Teenagers

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

Questionnaires

Customers Sample1. What is your age?a. Below 18b. 18-25c. 25-35d. Above 35

2. Do your own any Nokia products?a. Yes b. No

3. Are you satisfied with its performance/features?a. Not at allb. Noc. Somewhatd. Yesd. Very much

4. It is easy to use my Nokia phone and is user friendly.a. Strongly disagreeb. Disagreec. Neurald. Agreee. Strongly agree

5. Nokia phones provide me with a wide range of choices in selecting phones.a. Strongly disagreeb. Disagreec. Neurald. Agreee. Strongly agree

6. The price of Nokia phones is affordable.a. Strongly disagree b. Disagreec. Sometimesd. Agreee. Strongly agree

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 doesntb. To some extentc. It does

9. If Nokia were to change its OS used on the phones, which one would you prefer?a. Androidb. 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 d. Important e. Very 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 Sample1. What is your age?b. Below 18b. 18-25c. 25-35d. Above 35

1. What is your educational background?a. Studentb. After ALc. Graduated. Post graduate

2. What are your working hours? 3. How satisfied are you with your job role?a. Very Dissatisfied b. dissatisfiedc. Neutrald. Satisfiede. Very satisfied

4. Do you like your current position in the company?a. Hate itb. Do not likec. Neurald. Likee. Very Much

5. How would you rate your performance in the company when given a task?a. Reducedb. Not goodc. Neutrald. Goode. Very Good

6. How easy is it to perform your tasks in the company on a daily basis?a. Very Hardb. Hardc. Neutrald. Easye. 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 2nd 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.

//inc relationship between market share and teenage usage