Nokia Analyses

Nyambayar Erdenebayar

Assignment 2: Nokia Corporation Net Marketing Contribution Analyses

*Income Statement

Calculations (by EURmillons):

2012: NMC= 8390 – 3205= 5185 (EURm)

Marketing RIO= NMC/ Selling and Marketing expenses * 100% = 162%

Marketing ROS= NMC/Net sales * 100% = 17%

2011: NMC = 11359 – 3769= 7590 (EURm)

Marketing RIO= NMC/ Selling and Marketing expenses * 100% = 201%

Marketing ROS= NMC/Net sales * 100% = 19%

2010: NMC= 12990 – 3856= 9134 (EURm)

* Nokia Corporation Annual Report of 2012

/http://i.nokia.com/blob/view/-/2246090/data/2/-/form20-f-12-pdf.pdf/

Marketing RIO= NMC/ Selling and Marketing expenses * 100% = 236%

Marketing ROS= NMC/Net sales * 100% = 21.5%

As you can see from time to time Nokia corporation making less net marketing contribution, return on sales and return on investments. Not to mention from 2011 they are making loss in income statement. So what exactly happened? Where Nokia went wrong?

Not that long ago, it was the world’s dominant and pace-setting mobile-phone maker. Today, it has just three per cent of the global smartphone market, and its market cap is a fifth of what it was in 2007—even after rising more than thirty per cent on early September.

What happened to Nokia is no secret: Apple and Android crushed it in the market.

First of all, Nokia overestimated the strength of its brand, and believed that even if it was late to the smartphone game it would be able to catch up quickly. Long after the iPhone’s release, in fact, Nokia continued to insist that its superior hardware designs would win over users. Even some researchers claiming that if Nokia had stuck with its own operating systems, instead of embracing the Windows Phone in 2011, it could have succeeded. But even though the Windows Phone has been a flop, the truth is that, by 2010, Nokia had already introduced too many disappointing phones, and its operating system had already proven too buggy, clunky, and unintuitive to win consumers over. In 2008,...