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Marketing Project on Nokia Essay

Introduction:

Nokia is a world leader in mobile phone industry, but its market share has recently been diminished by tough competition in the smart phone market. It targeted rural markets with mobile phones that are affordable and, the mobile phones were not only for the communication but also for varied purposes like torch light, radio etc. Farmers use it during nights as a torch light. Nokia was able to fully penetrate and conquer the still untapped rural mobile phone market. Nokia plans to conquer the untapped rural market by providing additional services like information on agriculture, microfinance, weather reports.

Background:

In 1865, an engineer named Fredrik Idestam established a wood-pulp mill and started manufacturing paper in southern Finland near the banks of a river. Those were the days when there was a strong demand for paper in the industry, the company’s sales achieved its high-stakes and Nokia grew faster and faster. The Nokia exported paper to Russia first and then to the United Kingdom and France. The Nokia factory employed a fairly large workforce and a small community grew around it. In southern Finland a community called Nokia still exists on the riverbank of Emäkoski. Finnish Rubber Works, a manufacturer a Rubber goods, impressed with the hydro-electrcity produced by the Nokia wood-pulp (from river Emäkoski), merged up and started selling goods under the brand name on Nokia.

After World War II, it acquired a major part of the Finnish Cable Worksshares. The Finnish Cable Works had grown quickly due to the increasing need for power transmission and telegraph and telephone networks in the World War II. Gradually the ownership of the Rubber Works and the Cable Works companies consolidated. In 1967, all the 3 companies merged-up to form the Nokia Group. The Electronics Department generated 3 % of the Group’s net sales and provided work for 460 people in 1967, when the Nokia Group was formed.

In the beginning of 1970, the telephone exchanges consisted of electro-mechanical analog switches. Soon Nokia successfully developed the digital switch (Nokia DX 200) thereby replacing the prior electro mechanical analog switch. The Nokia DX 200 was embedded with high-level computer language as well as Intel microprocessors which in turn allowed computer-controlled telephone exchanges to be on the top and which is till date the basis for Nokia’s netwok in infrastucture

Introduction of mobile network began enabling the Nokia production to invent the Nordic Mobile Telephony(NMT), the world’s very first multinational cellular network in 1981. The NMT was later on introduced in other countries. Very soon Global System for Mobile Communication (GSM), a digital mobile telephony, was launched and Nokia started the development of GSM phones.

Beginning of the 1990 brought about an economic recession in Finland. (Rumour has it that Nokia was offered to the Swedish telecom company Ericsson during this time which was refused) Due to this Nokia increased its sale of GSM phones that was enormous. This was the main reason for Nokia to not only be one of the largest but also the most important companies in Finland. As per the sources, in August 1997, Nokia supplied GSM systems to 59 operators in 31countries.

Slowly and steadily, Nokia became a large television manufacturer and also the largest information technology company in the Nordic countries. During the economic recession the Nokia was committed to telecommunications. The 2100 series of the production was so successful that inspite of its goal to sell 500,000 units, it marvellously sold 20 million. Presently, Nokia is the number 1 production in digital technologies, it invests 8.5% of net sales in research and development. Also has its annual Nokia Game. Between 1992 and 1996, the company exited from the rubber and cable businesses as well

Nokia in india:

Nokia entered the Indian market in 1994. The first ever GSM call in India was made on a Nokia 2110 mobile phone on its own network in 1995. When Nokia entered India, the telecom policies were not conducive to the growth of the mobile phone industry.

The tariffs levied on importing mobile phones were as high as 27%, usage charges were at Rs.16 per minute and, at these high rates, consumers did not take to mobile phones. Nokia also had to face tough competition from other powerful global players like Motorola, Sony, Siemens and Ericsson, Samsung, reliance. ————————————————-

The Indian Mobile Phones IndustryThe mobile phones industry made a slow start in India in 1995. Several private players who had entered the industry in 1995 exited in the next few years due to the unfriendly telecom policies of the Indian government, high licensing fees and absence of a proper telecom regulatory body. The growth in the subscriber base of mobile phones remained sluggish initially, reaching the 1 million milestone in 1998. In 1999, the Government of India announced a new telecom policy. This policy planned to provide telephones on demand by 2002.| Among other things, the policy allowed unrestricted private entry into almost all mobile service sectors.

The government allowed cellular mobile service providers to share infrastructure with other operators. It also allowed existing operators to migrate from fixed license fee to one-time entry fee with revenue sharing. This policy helped many private operators to break even faster. By 2001, the demand for mobile services was growing well. The private companies concentrated on providing basic telephone services to consumers. The number of mobile phones crossed five million by 2001 and doubled to 10 million in 2002…


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