FINANCIAL LITERACY FOR DIRECTORS - NOKIA SUCCESS, FAILURE & PATH TO REVIVAL by Warsha.pdf

Kumari Warsha Goel | Page 1 of 28
MODULE: FINANCIAL LITERACY FOR DIRECTORS
TITLE OF STUDY: NOKIA SUCCESS, FAILURE & PATH TO REVIVAL
Dissertation by Kumari Warsha Goel

Contents
PROJECT OBJECTIVES & GOAL...................................................................................................................2
EXPECTATIONS FROM DIRECTORS............................................................................................................3
FINANCIAL GOVERNANCE AND RELEVANCE TO BOARD...........................................................................3
CORPORATE STRATEGY AND ITS NEED .....................................................................................................4
UNDERSTANDING BOARD’S ROLE IN COMPANY ......................................................................................5
NEW DYNAMICS OF FINANCIAL GLOBALIZATION.....................................................................................6
UNDERSTANDING FINANCIAL RISK AND TOOLS TO CONTROL IT .............................................................7
KEY FINANICAL TERMS:.............................................................................................................................9
CASE STUDY OF NOKIA............................................................................................................................12
FINANCIAL STATISTICS OF NOKIA FOR PAST 10YRS................................................................................13
MISTAKES THAT LED TO NOKIA FAILURE ................................................................................................21
NOKIA ACQUISTION BY MICROSOFT.......................................................................................................23
NOKIA’s REVIVAL AND ITS ASSOCIATION TO HMD GLOBAL & FIH MOBILE............................................23
NOKIA’S ANNOUNCEMENT.....................................................................................................................23
NOKIA STRATEGY BASELINE FOR FUTURE...............................................................................................24
FUTURE PLANS OF NOKIA .......................................................................................................................25
CONCLUSION – KEY FINDINGS & RECOMMENDATIONS.........................................................................26
LINKS AND REFERENCES:.........................................................................................................................28
PROJECT OBJECTIVES & GOAL
Financial Literacy for directors provides tools and information to build knowledge and
confidence in finance and accounting and ability to interpret financial reports. It helps to
evaluate the sources of finance, financial model, investment, and principles which helps in
decision making as well as evaluate associated risks and returns.
Directors should have an appropriate level of financial literacy to meet their legislative
responsibilities, understand the company’s financial information needs, and recognize when

consultation with a financial expert is needed. At a very basic level directors need a clear
understanding of the differences between profit, cash flow and going concern, recognizing that
profit is not an absolute number and will be impacted by the valuation methodologies adopted
for financial reporting purposes.
EXPECTATIONS FROM DIRECTORS
All directors are expected to have good oversight, attention to details, holistic business
perspective, Vision along with good knowledge of finance and regulatory as well as legal laws. I
am listing below few skills, background, and experience for financial literacy for directors :
• Acquit formal legal and statutory obligations as they relate to financial matters, such as
signing off on the annual financial reports.
• monitor financial results to assess solvency.
• balance risk mitigation (financial and otherwise) with the ability to drive the company’s
financial performance by understanding the ‘story’ told by its financial reports; and
• know when financial experts are required to assist with the above points.
In addition to the above it’s also expected from directors to understand:
• Company’s business model.
• Business plans and strategy.
• Stage of growth.
• Company’s financial health.
• Company Risk profile.
FINANCIAL GOVERNANCE AND RELEVANCE TO BOARD
Financial governance refers to the way a company collects, manages, monitors, and controls
financial information. Financial governance includes how companies track financial
transactions, manage performance and control data, compliance, operations, and disclosures.
Appropriate Financial governance should be setup based on financial literacy for effective
functioning of the organization.

The primary areas of financial governance are:
• Strategy
• Financing
• Reporting
• Monitoring and
• Solvency
For example: Routine transactions are likely to be approved by managers with appropriately
delegated authority, whereas complex and unusual transactions would often require board
approval.
Depending on the complexity, the financial skills and expertise needed by the board and senior
executives may range from basic book-keeping to an in-depth knowledge of technical
accounting requirements.
Financial governance includes oversight of:
• Employment of appropriately skilled persons
• Consultation with external professionals as needed
• Selection of external advisers with appropriate expertise and experience
• Continuing professional education of financial staff employed by the company
For any organization to function effectively, strategy needs to be outlined and defined. Before
moving to effective strategy lets understand what a corporate strategy is.
CORPORATE STRATEGY AND ITS NEED
A corporate strategy refers to a companywide strategy aligned with the company's vision and
objectives, aiming to create value and increase profit. It considers an organization's overall
nature, ecosystem, and ambition. It aligns with the optimum utilization and allocation of
resources.
The four most widely accepted key components of corporate strategy are visioning, objective
setting, resource allocation, and prioritization

Corporate financial strategy is a way to complement business strategy, to get the most long-
term value out of a company. It is about how organizations raise funds, and how they apply
them. In raising funds, the broad choices you have are borrowing, debt, or raising money from
shareholders, equity.
By combining data from the corporation’s financial management with its strategic planning, a
roadmap can be created. Aligning mission and company goals with information on resources,
risks, capital, and budget helps a business to navigate unpredictable economic conditions and
minimize costs across the portfolio in the long run.
UNDERSTANDING BOARD’S ROLE IN COMPANY
The Board’s helps in Providing Financial Oversight. As a board member, you will be responsible
for three key aspects of financial oversight of the organization i.e., Planning, controls, and
reporting.
1. Financial Planning: Approve the annual budget, in alignment with strategic goals.
Typically, the initial budget is drafted by senior staff and the Finance Committee, and
then put forward to the full board for consideration and formal approval.
2. Financial Controls: Ensure there are controls in place to account for money as it comes
in as revenue and goes out as expenditures. Ensure an annual audit is conducted, and
carefully review findings with the auditor.
3. Financial Reporting: Analyze financial reports on a monthly or quarterly basis. Financial
reports typically include a profit and loss statement, a balance sheet, a cash flow
statement, and a narrative description written by the team member who provides
primary oversight of financial performance (e.g. CEO, CFO).
Financial Question every Board Member should ask:

• Is the financial condition of the organization sound?
• Is our financial performance on track with this year’s budget? Do we need to make any
adjustments?
• Are the organization’s expenses within budget?
• What are risk areas in our financial picture?
• Does the current financial plan align with the strategic priorities of the organization?
• Do we have diversity in our funding streams? (Ideally funding is a healthy mixture of
private funding, public funding and/or earned income revenue streams.)
Questions every Finance Committee member should ask:
• How is revenue tracking against budget? How are actual expenditures tracking against
budget?
• Is our projected cash flow adequate to cover monthly expenses?
• How many days of cash on hand do we have?
• Do we have sufficient reserves to get through a downturn?
• Are our reserves properly invested?
NEW DYNAMICS OF FINANCIAL GLOBALIZATION
Financial globalization is an aggregate concept that refers to increasing global linkages created
through cross- border financial flows. Financial integration refers to an individual country's
linkages to international capital markets. One of the main features of financial globalization
is increasing the role of the financial sector, linked with the expansion of the scope and
complexity of foreign economic relations.
One of the major benefits of Financial Globalization is that the risk of a "credit crunch" has been
reduced to extremely low levels. When banks are under strain, they can now raise funds from
international capital markets.
The recent wave of financial globalization began in earnest in the mid-1980s, spurred by the
liberalization of capital controls in many countries in anticipation of the better growth

outcomes and increased stability of consumption that cross-border flows would bring. It was
presumed that these benefits would be large, especially for developing countries, which tend to
be more capital-poor and have more volatile income growth than other countries.
Emerging market economies, the group of developing countries that have actively participated
in financial globalization, have clearly registered better growth outcomes, on average, than
those countries that have not participated. Yet most studies using cross-country growth
regressions to analyze the relationship between growth and financial openness have been
unable to show that capital account liberalization produces measurable growth benefits. One
reason may be traced to the difficulty of measuring financial openness. For example, widely
used measures of capital controls (restrictions on capital account transactions) fail to capture
how effectively countries enforce those controls and do not always reflect the actual degree of
an economy's integration with international capital markets. In recent years, considerable
progress has been made on developing better measures of capital controls and better data on
flows and stocks of international assets and liabilities. Studies that are based on these improved
measures of financial integration are beginning to find evidence of growth effects of financial
Integration.
UNDERSTANDING FINANCIAL RISK AND TOOLS TO CONTROL IT
Financial risk is the possibility of losing money on an investment or business venture. Some
more common and distinct financial risks include credit risk, liquidity risk, and operational risk.
Financial risk is a type of danger that can result in the loss of capital to interested parties.
How to Identify Financial Risk:
Identifying financial risks involves considering the risk factors a company faces. This entails
reviewing corporate balance sheets and statements of financial positions, understanding
weaknesses within the company's operating plan, and comparing metrics to other companies
within the same industry. There are several statistical analysis techniques used to identify the
risk areas of a company.
How to handle Financial Risk

Financial risk can often be mitigated, although it may be difficult or unnecessarily expensive
for some to eliminate the risk. Financial risk can be neutralized by holding the right amount of
insurance, diversifying your investments, holding sufficient funds for emergencies, and
maintaining different income streams.
Tools to control Financial Risk
Luckily there are many tools available to individuals, businesses, and governments that allow
them to calculate the amount of financial risk they are taking on.
The most common methods that investment professionals use to analyze risks associated with
long-term investments—or the stock market as a whole—include:
• Fundamental analysis, the process of measuring a security's intrinsic value by
evaluating all aspects of the underlying business including the firm's assets and its
earnings.
• Technical analysis, the process of evaluating securities through statistics and looking at
historical returns, trade volume, share prices, and other performance data.
• Quantitative analysis, the evaluation of the historical performance of a company using
specific financial ratio calculations.
For example, when evaluating businesses, the debt-to-capital ratio measures the proportion of
debt used given the total capital structure of the company. A high proportion of debt indicates
a risky investment. Another ratio, the capital expenditure ratio, divides cash flow from
operations by capital expenditures to see how much money a company will have left to keep
the business running after it services its debt.
In terms of action, professional money managers, traders, individual investors, and corporate
investment officers use hedging techniques to reduce their exposure to various risks. Hedging
against investment risk means strategically using instruments—such as options contracts—to
offset the chance of any adverse price movements. In other words, you hedge one investment
by making another.

The priority is to identify and understand the overall impact that the various financial realities
represented by the KPI numbers have on a business. Then, the insights acquired from these
invaluable financial management performance indicators should be used to identify and
implement changes that correct problems with policies, processes, personnel, or products that
are impacting one or more of your KPI values.
KEY FINANICAL TERMS:
Let’s understand few financial related important documents and terms:
The Balance Sheet : A snapshot of the assets, liabilities and equity of an organization at a
specific moment in time. Board members can use this document to guide financial decisions
and ensure the organization is on track.
The Budget: A financial roadmap that outlines current and future financial activities for the
organization. The budget enables organizations to plan ahead and ensure finances are
operating within their means. Board members play an important role in reviewing, discussing
and approving budgets on an annual basis.
Profit & Loss Statement (P&L): A financial document that summarizes revenue secured and
expenses incurred, compared against the annual budget. This document provides the board
with a picture of the actual financial outcomes of the organization year-to-date and helps guide
financial planning.
Financial Audit: An annual financial investigation and report conducted by an independent
auditor. The auditor is charged with reviewing and confirming that the organization’s finances
are accurate. The board typically participates in selecting the auditor, oversees the audit at a
high-level,receives a final report on the audit’s findings and responds to any concerns.
Form 990: A public filing that most tax-exempt organizations are required to file with the IRS
on an annual basis. Board members should review the Form 990 each year and ensure that it

accurately depicts the state of the organization to the public. To ensure meeting these
responsibilities Prepare thoroughly for board meetings using the information provided by
leadership in the board meeting packet.
Let’s also understand few important Financial KPI for an organization:
Operating cash flow: Operating cash flow (OCF) is a measure of the amount of cash generated
by a company's normal business operations. Operating cash flow indicates whether a company
can generate sufficient positive cash flow to maintain and grow its operations, otherwise, it
may require external financing for capital expansion.
Working capital: Working capital, also known as net working capital (NWC), is the difference
between a company's current assets—such as cash, accounts receivable/customers' unpaid
bills, and inventories of raw materials and finished goods—and its current liabilities, such as
accounts payable and debts.
Debt to Equity Ratio: Debt-to-equity (D/E) ratio is used to evaluate a company's financial
leverage and is calculated by dividing a company's total liabilities by its shareholder equity.
Operating Margin: The operating margin measures how much profit a company makes on a
dollar of sales after paying for variable costs of production, such as wages and raw materials,
but before paying interest or tax. It is calculated by dividing a company's operating income by
its net sales.
Account payable turnover: The accounts payable turnover ratio measures how quickly a
business makes payments to creditors and suppliers that extend lines of credit. Accounting
professionals quantify the ratio by calculating the average number of times the company pays
its AP balances during a specified time.
Account receivable turnover: The accounts receivable turnover ratio, or receivables turnover,
is used in business accounting to quantify how well companies are managing the credit that

they extend to their customers by evaluating how long it takes to collect the outstanding debt
throughout the accounting period.
Inventory turnover: Inventory turnover is the rate that inventory stock is sold, or used, and
replaced. The inventory turnover ratio is calculated by dividing the cost of goods by average
inventory for the same period. A higher ratio tends to point to strong sales and a lower one to
weak sales.
Return on Equity: The return on equity is a measure of the profitability of a business in relation
to the equity. ROE measures how many dollars of profit are generated for each dollar of
shareholder's equity and is thus a metric of how well the company utilizes its equity to generate
profits.
Few Other Key KPI and considerations
Quick Ratio: In finance, the quick ratio, also known as the acid-test ratio is a type of liquidity
ratio, which measures the ability of a company to use its near cash or quick assets to extinguish
or retire its current liabilities immediately
Marketing KPIs — Cost Ratio of Customer Acquisition to Lifetime Value, Lifetime Value,
Customer Acquisition Cost, and others, Customer Profitability Score, Relative Market Share.
Recurring Revenue Metrics — Income and expense areas, such as recurring service contract
fees, subscription fees, product maintenance fees, Revenue Growth Rate, Cash Conversion
Cycle.
Recurring Revenue Overview — Include Recurring Revenue Proportion, Recurring Revenue
Growth Rate, Recurring Revenue Exit Rate.

LOB Efficiency Measure — Operating Cycle Time (production rate), Capacity Utilization Rate,
Process Downtime Level, Human Capital Value Added, Employee Engagement Level, Quality
Index.
Finance Department — Operational KPIs should also include obscure indicators such as Finance
Error Report KPI, Payment Error Rate KPI. And a variety of indicators in areas of billing and
transaction management, collections, and others.
Altman Z Score – The Altman Z Score is used to predict the likelihood that a business will go
bankrupt within the next two years. The formula is based on information found in the income
statement and balance sheet of an organization.
When Z is >= 3.0, the firm is most likely safe based on the financial data. When Z is 2.7 to 3.0,
the company is probably safe from bankruptcy, but this is in the grey area and caution should
be taken.
CASE STUDY OF NOKIA
Prelougue:
Nokia Corporation (natively Nokia Oyj in Finnish and Nokia Abp in Swedish,[5] referred to
as Nokia)[a] is a Finnish multinational telecommunications, information technology,
and consumer electronics corporation, established in 1865. Nokia's main headquarters are
in Espoo, Finland, in the greater Helsinki metropolitan area,[3] but the company's actual roots
are in the Tampere region of Pirkanmaa.[6] In 2020, Nokia employed approximately 92,000
people[7] across over 100 countries, did business in more than 130 countries, and reported
annual revenues of around €23 billion.[4] Nokia is a public limited company listed on the Helsinki
Stock Exchange and New York Stock Exchange.[8] It was the world's 415th-largest company
measured by 2016 revenues, according to the Fortune Global 500, having peaked at 85th place
in 2009.[9] It is a component of the Euro Stoxx 50 stock market index.[10][11]
The company has operated in various industries over the past 150 years. It was founded as
a pulp mill and had long been associated with rubber and cables, but since the 1990s has

focused on large-scale telecommunications infrastructure, technology development, and
licensing.[12] Nokia made significant contributions to the mobile telephony industry, assisting in
the development of the GSM, 3G, and LTE standards. For a decade beginning in 1998, Nokia
was the largest worldwide vendor of mobile phones and smartphones. In the later 2000s,
however, Nokia suffered from a series of poor management decisions, and soon saw its share
of the mobile phone market drop sharply.
In this case study we will go through Nokia failure reason and we will analyze its revival plan
along with some of my personal recommendation and suggestions.
FINANCIAL STATISTICS OF NOKIA FOR PAST 10YRS
Lets see some Market trends and financial statistics of Nokia

From above figure we can clearly see that Nokia sales worldwide was highest in 2007-2008 and
gradually started reaching its lowest in year 2014.How we see it improved in 2017 however not
marginal improvement over the year.
Income Statement
Balance Sheet
Cash Flow Statement:

Key Financial Ratio
Lets see Nokia annual/quarterly revenue history and growth rate from 2010 to 2023 and few
important ratios.

Revenue can be defined as the amount of money a company receives from its customers in
exchange for the sales of goods or services. Revenue is the top line item on an income
statement from which all costs and expenses are subtracted to arrive at net income.
• Nokia revenue for the quarter ending June 30, 2023 was $6.226B, a 0.38% decline year-
over-year.
• Nokia revenue for the twelve months ending June 30, 2023 was $26.510B, a 1.97%
increase year-over-year.
• Nokia annual revenue for 2022 was $26.246B, a 0.08% decline from 2021.
• Nokia annual revenue for 2021 was $26.267B, a 5.23% increase from 2020.
• Nokia annual revenue for 2020 was $24.962B, a 4.41% decline from 2019.
Total Assets:
Nokia total assets from 2010 to 2022. Total assets can be defined as the sum of all assets on a
company's balance sheet.
• Nokia total assets for the quarter ending June 30, 2023 were $44.431B, a 2.11%
• Nokia total assets for 2022 were $45.245B, a 4.51% decline from 2021.

• Nokia total assets for 2021 were $47.382B, a 14.61% increase from 2020.
• Nokia total assets for 2020 were $41.341B, a 5.66% decline from 2019.
Total Liabilities:
Nokia total liabilities from 2010 to 2023. Total liabilities can be defined as the total value of all
possible claims against the corporation.
• Nokia total liabilities for the quarter ending June 30, 2023 were $21.231B, a 8.74%
decline year-over-year.
• Nokia total liabilities for 2022 were $22.67B, a 15.16% decline from 2021.
• Nokia total liabilities for 2021 were $26.723B, a 1.07% decline from 2020.
• Nokia total liabilities for 2020 were $27.011B, a 1.64% increase from 2019.

Shareholder equity:
Shareholder equity can be defined as the sum of preferred and common equity items
• Nokia share holder equity for the quarter ending June 30, 2023 was $23.199B, a 14.58%
• Nokia shareholder equity for 2022 was $22.574B, a 9.27% increase from 2021.
• Nokia shareholder equity for 2021 was $20.659B, a 44.17% increase from 2020.
• Nokia shareholder equity for 2020 was $14.33B, a 16.92% decline from 2019.
Operating Margin:
The current operating profit margin for Nokia as of June 30, 2023 is 8.76%.

Net Worth:
How much a company is worth is typically represented by its market capitalization, or the
current stock price multiplied by the number of shares outstanding. Nokia net worth as of Aug
21,2023, is $21.2B.
Debt to Equity Ratio
The debt/equity ratio can be defined as a measure of a company's financial leverage calculated
by dividing its long-term debt by stockholders' equity. Nokia debt/equity for the three months
ending June 30, 2023, was 0.17.

Dividend Payout and Yield:
The current TTM dividend payout for Nokia (NOK) as of September 01, 2023 is $0.09. The
current dividend yield for Nokia as of September 01, 2023 is 2.18%.
Stock Price and Data:
Historical daily share price chart and data for Nokia since 1994 adjusted for splits and dividends.
The latest closing stock price for Nokia as of September 01, 2023 is 3.99.
• The all-time high Nokia stock closing price was 32.37 on June 19, 2000.

• The Nokia 52-week high stock price is 5.19, which is 30.1% above the current share
price.
• The Nokia 52-week low stock price is 3.75, which is 6% below the current share price.
• The average Nokia stock price for the last 52 weeks is 4.43.
So, from above financial statement we see that it went from riches to rags and now on the path
of revival. To understand holistically lets study what led to its decline and also discuss on its
revival plan. Also if you want further details on various other metrics please refer link:
https://www.macrotrends.net/stocks/charts/NOK/nokia/stock-price-history
Annual Report for FY2022
Nokia Corp (NOK) SEC Filing 20-F Annual Report for the fiscal year ending Saturday, December
31, 2022
MISTAKES THAT LED TO NOKIA FAILURE
Internal Issues of Management –
With an accelerated increase in competition, Nokia had no choice but to face the real problem.
It had to release a product that is worthy of its competitors ASAP! This resulted in a work
environment that was chaotic. The top management pressurized the middle management to
come up with new and better software in as little time as possible. The reality was that Nokia
was nowhere close to getting what it had in mind. Additional pressure made things worse only,
resulting in the release of a series of sloppy finished products.

Dependence on Symbian operating system – Too much dependence on Symbian OS was
considered as main reason for Nokia decline. In 2008, Google announced android having more
application than Symbian and better user interface. Nokia could not improve its operating
system to same level or adopted the new one and by the time it decided to ditch Symbian it
was already too late.
Adopted windows phone as its principal smartphone strategy – In 2011 Nokia established its
strategic partnership with Microsoft and agreed to use windows for its smartphone. Obviously
Googles android having much more features and ease of access increased market for
smartphones having android.
Nokia became laggard in smartphone market – While iPhone and Samsung released innovative
features Nokia took time to invest on innovation keep pace its competitors and finally lagged.
Loosing on both ends – The biggest hit was not only smartphones but the basic versions of
mobile which was best at one time started loosing its market to its competitors like Sony,
Samsung etc.
Boards contribution to Nokia Failure:
Day-to-day business in most organizations offers scant opportunity for senior managers to work
out their negative emotions about radical change. According to the mainstream professional
mindset, emotions have no place at work. So, managers learn to cloak their emotional biases in
supposedly “rational” objections. They often convince themselves that these rationalizations
constitute sound arguments and will staunchly defend them. Under such conditions, it is almost
impossible to devise a thoughtful and creative strategy for dealing with radical change.
The board should perform interventions designed to regulate top managers’ emotions, thus
ensuring the quality and integrity of the strategy-formulation process. Why the board?
Directors ideally reside above the fray, only provisionally committing to a particular strategic

direction. Relative to outsiders such as management consultants, directors are also more
context-savvy and share with top managers the common goal of seeing the firm succeed in the
long term. While the mandate of the board does not traditionally encompass emotional
regulation, such a role is well within the board’s central duty to oversee organizational strategy.
In Nokia case we didn’t see an effective board and Key Management professional for obvious
their Internal Issues and lack of foresight into the future.
NOKIA ACQUISTION BY MICROSOFT
In September 2013, Nokia was acquired by Microsoft at price of 7.2Billion dollars. Microsoft
made several alterations to Nokia’s strategy which included withdrawing Nokia X the android
smartphone in the market. But finally, Nokia was not able make any impact in the market
compares to its rival as it lacked strong strategic plan as well as vision of future for cell phones.
NOKIA’s REVIVAL AND ITS ASSOCIATION TO HMD GLOBAL & FIH MOBILE
Nokia reentered the global through licensing mode in the first quarter of 2017.In May 2016,
Microsoft announced the selling rights of Nokia brand to HMD global (a new Finnish company)
for the next 10years and the feature phone business asset to FIH Mobile (a subsidiary of
Foxconn) for $350M.These two companies are now working together to create Nokia-branded
Android Phones and tablet for next 10years.
In 2021, Nokia set out its strategy to deliver sustainable, profitable growth by becoming a B2B
technology innovation leader, accompanied by a new purpose and operating model. They
decided to list out actions to reset, accelerate, and then scale our business to lead in a world
where widespread digitalization in gathering speed.
NOKIA’S ANNOUNCEMENT
As we move from the 5G era towards 5G-Advanced and 6G, the underlying networks will
need to evolve. The networks of the next decade will need to meet the demands of fully

immersive augmented and virtual reality, digital twins, and biosensors. These
technologies will in turn unleash the full promise of the consumer, enterprise and
industrial metaverses, which until now have only shown a glimpse of their potential.
They will pave the way for true extended reality (XR) experiences, which will eventually
lead to the merging of the physical and digital worlds and the enhancement of humans.
They listed their strength under following categories:
Networking Expertise: We know that accelerating the digital transformation of every industry
will be critical to unlocking massive gains in sustainability, productivity, and accessibility – our
networking expertise is increasingly valuable to customers and partners as they seek to
maximize their growth.
Technology Leadership: We are specialists in the technology we deliver – with a laser- focus
on delivering a best-of-breed technology portfolio.
Pioneering Innovation: Innovation runs through our business – across our evolving portfolio, in
the disruptive research and game-changing programs at Nokia Bell Labs, in our work to build
the device and application ecosystems needed for digitalization, and through our innovation
programs where we bring emerging technology to life alongside our partners.
Collaborative Advantage: Collaboration is in our DNA, and we are valued for the trusted
relationships we build with our customers. Today, we are going further: we know that realizing
the potential of digital cannot be achieved alone, so we are focused on bringing the right
partners and technologies together to create the digital services and applications of the future.
NOKIA STRATEGY BASELINE FOR FUTURE
Nokia no doubt hasn’t lost its hope and looking forward to the future to make a comeback.
Nokia has designed a strategy for the future. This strategy is based on six pillars, which probably
stand for 6G or all the needed efforts to create the future version of the networks:
▪ Grow market share with service providers, driven by continued technology
leadership
▪ Expand the share of Enterprises within its customer mix

▪ Continue to manage its portfolio actively, to ensure a path to a leading position in
all segments where it decides to compete
▪ Seize opportunities from sectors beyond mobile devices to monetize Nokia’s IP and
continue to invest in R&D for Nokia Technologies
▪ Implement new business models, such as as-a-Service; and
▪ Develop ESG into a competitive advantage and become the “trusted provider of
choice” in the industry.
However, to implement the above strategy it also needs to:
• Develop Future Fit Talent
• Invest in Long term Research
• Digitalize their operations
• Refresh their Brand
• Continually invest in growth and innovative
• Effective leadership and vision
FUTURE PLANS OF NOKIA
AI version for Nokia will be used as comeback as told by them. An ideal Nokia smartphone
would have a combination of hardware and software features that deliver a seamless and high-
quality user experience. Here are some key elements that would make an ideal Nokia
smartphone:
1. Design: A Nokia smartphone should have a sleek and modern design, crafted with
premium materials such as glass and metal. The device should have a compact form
factor that makes it easy to handle and use with one hand.
2. Display: A high-resolution display with excellent color accuracy and brightness
levels would be essential for an ideal Nokia smartphone. A display with a high
refresh rate and a high screen-to-body ratio would also add to the overall
experience.

3. Performance: An ideal Nokia smartphone should be powered by the latest high-end
processors, offering fast and smooth performance for demanding tasks such as
gaming and multitasking. It should also have ample RAM and storage for storing
apps, photos, and videos.
4. Camera: A smartphone with a high-quality camera system is crucial for capturing
stunning photos and videos. An ideal Nokia smartphone would have a triple-camera
setup that includes a primary camera, an ultra-wide camera, and a telephoto lens.
The camera should also have features such as optical image stabilization and low-
light capabilities.
5. Software: An ideal Nokia smartphone should run on a clean and fast version of
Android, offering users a smooth and responsive user experience. The device
should receive regular software updates, ensuring that users always have the latest
features and security patches.
6. Battery: A long-lasting battery with fast charging capabilities would be essential for
an ideal Nokia smartphone. A battery that lasts a full day on a single charge and
supports quick charging would make the device convenient for users on the go.
CONCLUSION – KEY FINDINGS & RECOMMENDATIONS
Advice for Nokia:
• Don’t get wrapped in Nostalgia: Nokia shouldn’t get trapped. Only constant in change
and it should take baby steps and work on the technology of the future. Continually
evolve and adapt to changes.
• Manage Expectations: Smartphone market is dominated by handful of names (Apple,
Samsung, Xiaomi etc.). Nokia shouldn’t think that it can overthrow everyone like it did in
the past rather than it should stay in competitive in market more like Xiaomi, Google
pixel, Redmi, one plus and others where customers has a choice to choose from.
• Keep it Simple: Nokia needs to keep things simple. The iPhone is now 10 years old and
while OEMs continue to tinker with new things, the foundation of what makes a good

smartphone is well established. People know what they like. No one is saying the new
Nokia phones shouldn’t try to innovate but re-establishing the brand as an affordable,
reliable one with quality products is more important. The trinkets can come later.
• Know that hardware and Software are equal: This time Nokia is releasing Android
phones. The ecosystem is established so users will be more inclined to try out a new
Nokia and the company will need to continue to understand and appreciate the equal
importance of hardware and software.
• Accept change is around the corner: This time Nokia is releasing Android phones. The
ecosystem is established so users will be more inclined to try out a new Nokia and the
company will need to continue to understand and appreciate the equal importance of
hardware and software.
Enablers needed to achieve future vision:
In addition to above the following enabler should guide them in the right direction:
• Good Corporate Financial Governance
• Effective Product Committee
• Visionary and Effective Marketing Insight Committee
• Healthy and strong Strategic Alliances
• Careful Consideration before Merger & Acquisitions
Other Options of the strategy could be – My personal Opinion:
• Try to sell Nokia to Apple or Google who can relaunch under their flagship leader brand
• Diversify the income and market
• Think of the future and build a culture of trust, innovation, and growth
• Have innovative leaders, Strategic thinkers, and visionary leaders on board
• Try one stuff at a time thinking of 10years ahead rather than trying to rush things.
• Evaluate and analyze what the customer would expect from a smartphone with respect
to usability, performance, feature etc. before launching

• With growing technology into data, AI, ML proper data crunching and security aspect to
be analyzed
• Build a culture of trust, healthy competition, Mutual respect, and growth mindset.
Personal Take:
My personal take is Nokia do can come back but it must be careful not to take rushed decision.
It must act like a visionary leader, think of future smartphone, analyze market, and then take
informed decision before launching anything new to market. It must be extra cautious not to
further damage its brand as done in the past.
LINKS AND REFERENCES:
• https://www.researchgate.net/publication/343878423_Nokia's_Comeback_-
_Is_it_Revival_of_an_Iconic_Brand
• https://www.nokia.com/about-us/strategy/strategy-
2023/#:~:text=In%202021%2C%20Nokia%20set%20out,widespread%20digitalization%2
0is%20gathering%20speed
• https://thestrategystory.com/2020/11/04/the-nokia-saga-rise-fall-and-return/
• https://www.pastemagazine.com/tech/nokia/an-open-letter-to-nokia-on-how-to-come-
back-in-the
• https://www.statista.com/statistics/267819/nokias-net-sales-since-1999/
• https://en.wikipedia.org/wiki/Nokia
• https://www.macrotrends.net/stocks/charts/NOK/nokia/financial-ratios
• https://www.wsj.com/market-data/quotes/FI/XHEL/NOKIA/financials
• https://www.imf.org/external/pubs/ft/fandd/2007/03/kose.htm

FINANCIAL LITERACY FOR DIRECTORS - NOKIA SUCCESS, FAILURE & PATH TO REVIVAL by Warsha.pdf

FINANCIAL LITERACY FOR DIRECTORS - NOKIA SUCCESS, FAILURE & PATH TO REVIVAL by Warsha.pdf

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