Introduction

Nokia founded in 1965 and Nokia had been a market leader in the mobile phone since 1998. Nokia
operated under three business segment: Devices & Services, NAVTEQ and Nokia Siemens
Network. In September 2010, Stephen Elop joined Nokia Corporation as the president and CEO
of the company. Nokia had a presence in over 160 country in as of 2010. And Nokia has a world
largest mobile manufacture company and they captured 35% market in first quarter of 2010. In
second quarter of 2010 the net income of company was in decreasing due to decrease in sales of
smartphone and the competitors are capture the market share like Apple, Samsung, Motorola, etc.

Issues and Problem of Nokia

Nokia was failed to capture the market share and decrease in their sales of smartphone because of
following reason that Nokia faced.

1. Drop in Smartphone Market Share

Nokia has a 35% global market share in first quarter of 2010. It had lost a significant market share
in smartphone market because it lunch slow premium handset and also slow lunching latest
version of Symbian Operating System. It also unable to footing compared to rivals like Research
in Motion and Apple. In first quarter of 2010 Nokia have 48.8% and it decrease to 44.3% global
market share of smartphone. Nokia started to lose their share market since the iPhone lunched in
2007. Nokia N95 model lunched in2008 and failed to impact on market, as a result consumers
loyalty shifted to iPhone. Since 2007, Nokia share price fallen by two-thirds. And Nokia also failed
to lunch touchscreen model N8 and it was shifted release date by a year, due to the deletion of
lunch N8 it generated negative attention for the company and led to drop down in its stock price.
As the Symbian OS was not optimized for touch screen mobile, users were turned to the Android,
Blackberry OS and Apple iOS. Nokia also had failed to build relationship with any of the major
wireless careers in the US, as a result Nokias smartphone were not offered with subsidies on these
career network. Nokia developing new services that is OVI store instead of building phone and
mobile application but it also failed to pick up and Nokia had shut down some services.

2. Competition

Nokia faced increasing competition from iPhone and Android phone. Adoption of android phone
was growing faster than Nokias phone like Samsung, OLG, and Sony, Motorola etc. the lowering
wholesale prices of mass market handsets and even Nokias massive global shipments of low cost
phone are struggling to compensate. Nokia have been edge out because of their rival company
produce or lunched new, better products than Nokia. In 2009, Nokia spend six times much than
Apple on R&D but they failed to develop device same appeal as the iPhone. Nokia sale their 40%
of their products in Europe, China and India at lower price and reduce or they earned limited profit
but their competitors were shipped fewer handset and making more profit than Nokia.

3. Dwindling Sales

In second quarter of 2010, net income of Nokia was dropped by 40% due to the falling sales in
smartphone market. Sales decrease due to the following factor competitive market, shifts in
product mix towards lower gross margin products, the depreciation of euro, operating expenses,
and global pricing strategies negatively impacted Nokias business in the second quarter of 2010
and the share price also dropped about 20% in the two weeks.

4. Management Issue

Nokia decision were not based on product vision and the potential ideas were delayed or ignored
by top management. The management of Nokia were not innovative and they working
independently without any communication with other department. There is incompetent people
managing, ordering and directing things. The investor want to expecting challenging product from
the company but it did not happened since Kallasvuo took over the CEO of the company in 2006.
Nokia failed to lunch some innovative products in the market. Kallasvuo failed to understand the
companys problem and had not done anything right to fix them.

5. Elop Joins Nokia

September 10, 2010 Elop replaced the Kallasvuo as CEO of Nokia. Elop was right candidate to
drive both innovation and efficient execution of the company strategy and Elop was unusual move
and a major shift for Nokia as he would be the first non-finn CEO to run the company in its long
run. Elop was also aggressive leader that is not good for the company. Elop has not hardcore
experience in the mobile phone industry that require strong strategy because he was involved more
in networking and enterprise software.
6. Challenges Galore

The biggest challenges of the company was to manage quick turnaround of the company and
reassert Nokias place as the largest mobile maker in the world. Nokia has lost their leadership in
high tier phone and has struggled with the rise of internet-led service. Apple and RIM increase
their sales and capture the market share greater than Nokia because lower the selling price of
smartphone, customer increased interest. Elop failed because he focus on business than consumer
products where the real need of consumer. Elop was the first non-Finnish CEO of the company
thats why corporate culture was challenges for Elop and very long process of approval and lack
of leadership.

7. Road Ahead

Nokia was not performing well in smartphone market but it was still entry level with global
manufacturing and distribution base. There is required the Elop have to be change in corporate
level culture. The competitors continue capture the market share and the time was running out for
Nokia.

The Challenges Faced by Elop in Achieving his Objective.

On September 10, 2010, Elop join the Nokia as CEO by replaced Kallasvuo. In 2006 he was the
CEO of Juniper Network and in 2006 he was the CEO of Macromedia, it means that he have an
experience to handle the CEO position but he was the first non-Finn CEO to run the company.
Many challenges faced by Elop to achieve his objective and these are:

Elop enter into Nokia in 2010 but before he entered into Nokia, company was already faced
continuous decreased in sales and it was the big challenges to maintain to sales.

Before he entered into Nokia, the rival company already capture the huge market share of
smartphone.

Nokia was invested a huge amount in Symbian before Elop was appointed in Nokia.
Symbian model was already failed in market and lose market share.

Corporate level culture was not good, the top level management response was too slow
and approval process of new and innovative product was also slow.
 The biggest challenges for Elop was manage quick turnaround of the company and reassert
Nokias place as the largest mobile maker in the world.

Focus on the establishing the company in US and addressing lose in earning, but rival
company already capture the market share of US and it is very difficult to address this
problem and re-entered into US market.

To manage the corporate culture is also challenge for the Elop, Elop was the first non-
Finnish CEO of the company.

Hence Elop was face different problem or challenges to achieve his objective. Above all are the
challenge for the Elop. Elop has the first CEO of non-Finnish in Nokia and he faced also corporate
culture.

Recommendation and Suggestion

Nokia has the market leader in mobile phone since 1998. In 2004, Nokia dropped their market
share when the android phone entered into a market. Nokia also failed to compete with iPhone
and android market. Following are the strategy for Elop to tackle the challenge and regain its
market share.

1. Update Their OS

In smartphone OS market, competitors were quickly catching up with Nokias Symbian platform.
Due to the lack of proper update of their OS Symbian is not optimized for touchscreen devices.
Hence the company should properly update their OS system and make operating system to
properly support their touchscreen smartphone.

2. Enter into Android Market

Today the android is capture a big share in smartphone market. Nokia should adopt the changing
demand of market and they should enter into android market. This is not difficult for Nokia because
it is well known brand for the customer thats why the entry of the market with android is easy for
Nokia.

3. Focus on Consumer Product

Elop more focused on business rather than consumer products where the real need is. Nokia most
the way of working associated with a shift to a more customer focused support device. They have
to work the changing need of customer and lunch that type of product which actually needs from
the customer.

4. Manage Two Way Communication

Manage two way communication with all stakeholders during the change. Nokia top management
are not communicate properly. Potential ideas were either delayed or ignored by top management.
Hence they should manage proper communication with top level management.

5. Advancement of Technology

Nokia should not properly their OS and Symbian was not properly support their touchscreen
mobile phone. They should update their technology to shot out that type of problem. Nokia have
a huge market in India, Brazil and China for making cheap product but after the inter the android
phone by making cheap product than Nokia. Hence Nokia has also make cheap product than their
rival by update their technology.

6. Adopt to Change

Elop dont want to change Nokia smartphone. He dont want to inter into the android market.
Android is the leader of the smartphone market. Hence Nokia must adopt the changing
environment of the market.

Above are the some strategies that could be adopt by Nokia and regain the market share. Nokia
should analyze the external environment and find out the actual needs of customer. They should
also focus on product differentiation and make unique, new and innovative product. Corporate
culture are not good and they should not proper communicate with their stakeholder. Hence, top
management should change the corporate level culture and make proper communication with their
management. Nokia should proper update their operating system or may change their operating
system and adopt android.