External factor Analysis Summary for Nokia comprises of the external factors which involve opportunities and threats. Among others is the Societal Environment, from which most of the employees working in the company come. Nokia has a total of ten branches worldwide and 58,000 employees. In its operations, however, the company faces a number of challenges which include high corporate taxes and low productivity which are a result of the Finnish society based in Finland. This society has a total of 23,000 employees from the organization and follows a social-democratic model. Nokia hence becomes forced to pay off its share of the tax, which brings down its profits to a considerable extent.
Benefits Earned By Nokia Company
Recruitment
Some of the opportunities experienced by the company include the recruitment of staff. The company has to recruit highly qualified staff to run its operations. In this regard, the company spends quite a lump sum of money in paying these employees and organizing educational and training programs for them. This ensures that the employees develop their talents fully and become centered on exceptional performance (Andrei. G, 2008). The company also offers a variety of internship programs, which mainly focus on the attraction of talents at an early stage for careers. This enhances its competition and enables it to outdo other competitors in the market. Most of the employees of this company come from the upper-level education system which may be composed of universities and polytechnics.
Task Environment
The task environment is another external environmental factor affecting the company. It incorporates political issues that are frequently emerging in markets and creating instability in the affected economies. These instabilities have a significant effect on the currency of the country and may, as a result, destabilize the profit margins for Nokia as a company (Dennis.B, Randall.S and Tarique, 2012). The company also takes concern for the working environment of its employees. This is by ensuring that they do not get exposure to hazardous chemicals, that may lead to dreadful diseases, such as cancer, and ensuring that used chemicals and other by-products get dumped appropriately. Failure to meet these requirements may cost the company a lot of funds as it increases its expenses.
Threats Experienced by Nokia Company
Health Concerns
Some of the threats experienced by this company include the fact that the technology used in cell phones may lead to health troubles. This is as a result of the electromagnetic radiation that gets transmitted by the cell phones (Haim.M and Johannes.Z, 1999). This calls for frequent research on ways of preventing radiation from affecting the cell phone users. For this reason, therefore, the company spends a relatively large amount of money in maintaining trust and confidence in users of its products.
Human Rights Issues
Another threat involves the fact that Nokia solely depends on the growth rate of cell phone providers and the opening of new markets in maximizing its sales. Failure of these companies may lead to loss of massive sales for the company leading to substantial losses. A significant number of the cell phone providers are also considering coming up with their own brands of phones, which reduces the sales of the company to a considerable extent.
Competition
Increasing market shares
Other providers still consider building their own manufacturing firms and factories which will enable them to manufacture their own cell phones. This creates new competition, which the company needs to deal with accordingly. This makes competition in the market very intense as the competitors tend to have high bargaining power.
Product Substitutes
The manufacturers are also coming up with innovations such as the music phone introduced in Las Vegas by the Motorola Company. Apple manufacturers also introduced a new phone, which bears all the features of the iPod and has the cell phone capabilities, as well as Internet communication features such as email, search features, maps, and browsing. Another threat is Skype which offers low-cost alternatives to cell phone users.
Conclusion
Nokia as a cell phone manufacturing company has both benefits and threats in its operations. These include high sales volume as a result of large markets and highly qualified staff. The company should derive ways of dealing with competition from other manufacturers and cell phone providers. This can be attained by developing new inventions and unique products and availing them to its customers at a cheap and considerable price.
Table 1. External Factor Analysis for Nokia.
References
Dennis.B, Randall.S and Tarique. (2012). International Human Resource Management: Policies and Practices for Multinational Enterprises. Rutledge.
Haim.M and Johannes.Z. (1999). Survival of the Smartest: Managing Information for Rapid Action and World-Class Performance. John Wiley and Sons publishers. New York.
Andrei. G, (2008). Host Identity Protocol: Towards the Secure Mobile Internet. John Wiley & Sons publishers. UK.
The Board of Directors of Nokia Corporation manages all the main operations in the company and provides the companys strategic development according to the corporate principles.
On May 3, 2012, eleven members of the Board were elected. Today the Board of Directors is represented by the Chairman Risto Siilasmaa and Vice Chairman Dame Marjorie Scardino and the other members of the Board who are Stephen Elop, Jouko Karvinen, Isabel Marey-Semper, Henning Kagermann, Bruce Brown, Marten Mickos, Helge Lund, Kari Stadigh, and Elizabeth Nelson.
The members of the Board are predominantly independent directors or external members, and they are non-executive in their functions. Stephen Elop is the President and CEO of Nokia Corporation and can be discussed as the internal member of the Board ( Board of Directors ).
Stock Shares
Today the most considerable amount of the companys shares is purchased by the representatives of the foreign countries. Thus, the members of the Board have only 10% of all the shares of Nokia Corporation. At the Annual General Meeting in 2012, it was stated that it is necessary to provide the repurchasing of the shares in order to contribute to the most effective development of the company (Neuvo, Ruohtula, and Schwalbach).
The Peculiarities of Stocks
One of the main features of Nokia Corporation is the orientation on the publicly traded stock options. Nokia Corporation has only one class of shares according to which the holder of one share can have only one vote. Thus, the number of votes depends on the number of shares directly (Neuvo, Ruohtula, and Schwalbach).
The Contribution of the Board Members in Terms of Knowledge, Skills, Background, and Connections
All the members of the Board of Directors take the leader positions in different companies abroad and provide the independent view on the progress of the company (Wheelen and Hunger). They also contribute to the realization of the most innovative elements of the development as the part of the companys strategy and support the establishment of the effective relations of cooperation with the foreign companies ( Board of Directors ).
The Duration of the Membership in the Board
Dame Marjorie Scardino is the Board member since 2001 and the Vice Chairman since 2007. Henning Kagermann is the member of the Board since 2007. Risto Siilasmaa is the Board member since 2008, and he was elected as the Chairman of the Board of Directors in Nokia Corporation in 2012.
Isabel Marey-Semper is the member of the Board since 2009. Stephen Elop, Jouko Karvinen, and Helge Lund are the members of the Board since 2011. In 2012 Bruce Brown, Marten Mickos, and Elizabeth Nelson were elected as the members of the Board of Directors in the company ( Board of Directors ).
The Level of the Directors Involvement in Strategic Management of the Company
The Board of Directors is responsible for developing the strategic direction of the company, for managing the peculiarities of the strategic development, for regulating the management policies within the company, and for controlling the strategic partnership.
The members of the Board not only regulate and control the strategic and economic development of the company but also evaluate Nokia Corporations perspectives and regulate the international relations and partnerships. The position of the Directors is active, and they examine the characteristic features of the risk management in the company and participate in the regulation of the legal issues ( Board of Directors ).
Works Cited
Board of Directors 2012.
Neuvo, Yrjo, Samppa Ruohtula and Joachim Schwalbach 2002. Governance of a Company in a Fast Changing Business and Technology Environment. PDF File.
Wheelen, Thomas L. and David Hunger. Strategic Management and Business Policy: Toward Global Sustainability. USA: Prentice Hall, 2011. Print.
General Environment Factors Affecting Nokia and its Competitors
In essence, there are many factors that generally affect Nokia and its competitors. In order to analyze these factors in this paper, The PESTEL tool of analysis which entails the discussion of Political, Economic, Social, Technological, Environmental and Legal Factors, will be used.
Political Factors: Since Nokia is a multinational company, its products should be able to accommodate various political ideologies like liberalism, conservatism, democracy and independence, all at the same time. This represents most of the key dogmas that should be chiefly assessed by competing companies like Samsung and Apple if their products and services are to reach their target markets. Consequently, Nokia and its competitors should tailor their products and services in a way that they embrace the existing political ideologies (Perrey & Riesenbeck, 2009).
Economic Factors: A strong economy usually creates a viable environment for the growth of companies since they are able to sell their products and services. For example, a recent report by Euromonitor (2012) shows that, after the 2008-2009 electronics sales plunge due to the 2008 global economic crisis; the years 2010 and 2011 recorded vigorous economic up-surge due to the betterment of UAEs economy. It, therefore, follows that if Nokia and its numerous competitors are to do well, the companies must prevail over the challenges and limitations that come their way while they intermittently strive to strengthen the economies in their target environments.
Social Factors: Most of the products and services offered by Nokia and its competitors such as mobile phones and computers are for social purposes. For this reason, the social environment in a place highly dictates the success of the products and services. For example, most people in the western world are renowned for loving plush and trendy items like phones for social purposes such as networking and communicating with others.
These good social aspects prospect an amiable environment for companies like Nokia, unlike social environments like Africa where such items are not highly regarded (Cherrayil, 2012). Moreover, the use of social forums such as Twitter and Facebook in social marketing explicates the irreplaceable role of social factors on Nokia as well as its competitors.
Technological Factors: Advancements in the world of technology are believed to be crucial in the modern age based on the potential to simplify and fasten various activities. For this reason, the provision of products and services with immense technological advantages greatly dictates the success of failure of Nokia and its competitors. This, probably, is the reason Nokia and its competitors like Samsung usually strive to provide products with better technologies (Euromonitor, 2012).
Environmental Factors: In terms of geographical conditions and climates, there the sale of products and services by companies like Nokia is usually not adversely affected. However, over the recent times, there have been increasing concerns on the protection of environment through environment-friendly products. Based on such concerns, Nokia and its competitors have to ensure that their products and services are eco-friendly. Other environmental factors like weather patterns affecting network receptions and travel patterns should also be considered by Nokia and its competitors.
Legal Factors: If Nokia is to successfully market its products and services as required, it has to abide by the legal sanctions in its target environments. For instance, it should make sure legally punishable mistakes such as discrimination, negligence of duty and ethical decadence are avoided by its employees. In addition, Nokia and its competitors must ascertain that customer complaints are dealt with appropriately so that the companies do not have to contend with being constantly sued for legal malpractices.
Rejoinder: Effect of These Forces on the Rest of the World
As exemplified by the above discussions, most of these forces are faced similarly across the world. Differences only emerge due to the different styles of management by these companies and their target environments.
Notably, all the factors discussed play crucial roles in the success or failures of these companies. However, since Nokiajust like most business enterprises across the worldtend to primarily focus on getting profits; economic factors are usually considered by most macroeconomists as the most important environmental element (Boone, 2001).
Task Environment
Forces Driving Industry Competition and How They Compare Globally
In analyzing the key competitor forces that drive industry competition for Nokia and how these forces compare globally, Porters Five Forces business model will be used. An explanation of these forces is given below.
New Competitors Entry: In the technological industry, new competitors are bound to be a challenge. For a long time, Nokia was the leading mobile phone company in the world. However, the replacement of Nokia by Samsung at the top-spot means that Nokia has to make provisions to avoid being overtaken by new competitors while they struggle to retain their once-held top global position.
Substitute Product or Service: Substitute products or services are usually used by companies when their primary choices fail to work. At the moment, most of Nokias products are doing well in their respective markets so there is no dire need for substitutes. Nonetheless, their current products and services should be bettered to survive the dynamics of their global market.
Increase in Bargaining Power of Buyers: Nokia is known for having good prices for its buyers thus making price-wars with buyers have a less impact on the company. However, the recent dominance of Samsung calls for urgent measures to be taken by Nokia if it is to outwit such competition and retain its buyers who are slowly, but surely, being grabbed by its competitors.
Increase in Bargaining Power of Suppliers: When there are few suppliers, the price of commodities go high thus making it difficult for companies like Nokia to get sufficient supply of the required products and services. In turn, this affects their profit margins. A constant, reliable and sufficient supplier is, therefore, required if Nokia and its competitors are to survive the challenges posed by insufficient supply systems.
Intensity of Competitive Rivalry: As glimpsed by the discussions above, Nokia has several competitors. This competition can sometimes turn into a fiery rivalry leading to enmitywhich is not good for business. So, whereas positive competition is encouraged, Nokia and its competitors have to find a way of overstepping their boundaries in their bid to achieve supremacy in their target markets (Porter, 1985).
Key Factors in The Immediate Environment
From the discussion above, it is eminently evident that there are several environmental challenges faced by companies like Nokia. In order to overcome these challenges, it has been revealed that all the concerned parties should consider a myriad of factors. For this reason, customers, competitors, suppliers, creditors, labor unions, governments, trade associations, interest groups, local communities, and shareholders have to be relevantly considered if the challenges are to be limited.
References
Boone, M. E. (2001). Managing interactively: executing business strategy, improving communication and creating a knowledge-sharing culture. New York: McGraw Hill Professional.
Cherrayil, N. K. (2012). Mideast, Africa sales will hit $1.2b. Web.
Euromonitor. (2012). Consumer electronics in the United Arab Emirates.Web.
Perrey, J., & Riesenbeck, H. (2009). Power brands: measuring and managing brand success. New York: Wiley.
Porter, M. (1985). Competitive advantage. New York: Free Press.
In this section, the author will provide background information on the research conducted. To this end, the research will highlight the context of the research, the purpose of the research, relevance of the study, research areas, and structure of the proposal.
The traditional definition of the term sustainability views it as the ability of an organisation to maintain a balance between economic, social, and environmental priorities. The aim is to make sure that present or short- term needs of the organisation do not override the importance of future viability (Kolakowski 2012). The current research will address Nokia Company. As far as Nokia is concerned, sustainability is synonymous with taking advantage of the positive impacts of mobile phone technology in the society.
The company should make sure that it takes advantage of these positive impacts while at the same time reducing the negative outcomes that the business may have on the planet and on the people. Social and environmental responsibility should form the core of all the activities undertaken by individuals and corporations in the global market. Such stakeholders include, among others, suppliers and distributors that the company works with.
The company has to ensure that the devices manufactured and technological solutions offered safeguard the environment and the welfare of the community. In this regard, Nokia Company aims at enhancing the value of the organisation, the planet, and the consumers (Savitz 2011).
It is noted that Nokia is one of the most successful companies in the world as far as mobile technology is concerned. The company is the leader in the feature phone market. However, it lags behind in the smartphone market, which is dominated by key players, such as Apple Inc. and Google (Segan 2012). Currently, there are at least 1.3 billion people in the world who use Nokia phones to access information, share experiences, and talk to each other. In addition to manufacturing phones, the Nokia Siemens Network (herein referred to as NSN) is a leading provider of telecommunication infrastructure in the world (Woyke 2011).
In this proposal, the consultant endeavours to provide information on the future sustainability of the business in light of emerging competition in the industry. The proposed study will adopt the qualitative research design. The consultant is aware of the fact that Nokia is facing competition in the global market from other players, such as Apple. The proposed study is aimed at improving the sustainability of this company in such a competitive environment.
Research Design
In this section, the consultant provides information on the research design that is adopted for the proposed study. To this end, the consultant will highlight the research questions, the research style adopted, sources of data, types of data to be used, reliability of data, and representativeness.
Problem Statement
As already mentioned in this paper, Nokia has emerged as a very successful company in the manufacture and distribution of feature phones. However, since Research in Motion (herein referred to as RIM) introduced the first smartphone in the market, other players have flooded the industry with commitments to do away with the feature phone (Yoko & Doz 2012). Such a commitment on the part of the competitors jeopardises the future of Nokia in the global market.
Specifically, the entry of Apple Inc. into the smartphone market after the strategic drift experienced by RIM increased competition in this industry. Nokia had to contend with not only the old and established competitors, but also with new entrants whose strategies were not clear to the company. The new entrants included such companies as Google. The competition significantly transformed how people communicate using the cell phone.
Nokia was not prepared for this competition. The company was caught unawares. It made desperate attempts to catch up with competition by designing Symbian phones. However, the Symbian code was a failure, and so was the Linux platform that was used to produce Meego (Sen 2012). To address the problem, Nokia turned to Microsoft, and the two companies combined efforts and resources to design smartphones.
By the time the partnership between the two companies designed and introduced the first smartphone into the market, Apple and Google had dozens of brands already established in the same market. Nokia has bounced back into the industry quite well in the last two years. The company is gaining lost ground through the Lumia series of smartphones. The general problem is that Nokia still lags behind in the smartphone market. The specific problem is whether the company can successfully use the Lumia series to recapture lost ground or not.
Objectives
The proposed study has two major objectives. The collection and analysis of data will revolve around the two objectives. The objectives of the proposed study are listed below:
Study Objective 1: To determine whether Nokia can effectively use the Lumia series of smartphones to sustain its future business in the competitive smartphone market.
Study Objective 2: To determine whether reducing the price of the smartphones manufactured and distributed by Nokia can effectively sustain the companys future business in the competitive smartphone market.
Research Questions
The proposed study will have two research questions. The research questions are related to the research objectives identified above. What this means is that by answering the research questions, the research will have effectively addressed the research objectives. The two research questions are highlighted below:
Research Question 1: Is it possible for Nokia Company to use the Lumia series to effectively sustain its future business in the competitive smartphone market?
Research Question 2: Is it possible for Nokia Company to sustain its future business in the competitive smartphone market by reducing the prices of its smartphones?
Research Strategy
Research design has both specific and general definitions. In general terms, research strategy refers to the various issues that are taken into consideration in the process of planning and executing a project. The considerations range from identifying the general and specific problem of the research, to the time it takes to present the findings made in the research. Specifically, research design is a process used by researchers to avoid alternative interpretations of phenomena and corresponding findings.
The approach adopted for the proposed research is a qualitative case study (Kumar 2011). The approach was regarded as the most appropriate for the study, given the nature of the data that will be collected and such other considerations. The research design is analysed below:
The Proposed Case Study
When conducting a study, it is not always easy to determine which research method to employ. There are many methods at the disposal of the researcher. All the methods have their own pros and cons. The researcher opted to use a case study for the proposed study. A case study can refer to a person, an event, a process, a location, or an organisation. It also refers to a technique used by researchers to understand different facets of a given phenomenon (Stern 2005).
According to Mehl (2011), a case study is used to investigate a contemporary phenomenon in a setting where it is not easy to make a distinction between the said phenomenon and its context. Mehl (2011) adds that it is mostly used in studies with variables that cannot be displayed as data points. In such a case, the researcher finds it necessary to adopt triangulation technique, where information or data is collected from different sources. In this regard, it suffices to note that a case study is most appropriate in answering the research questions mentioned above. According to the definition given earlier, a case study is appropriate in a case where in- depth understanding of an organisation is required. The case study is appropriate because of other reasons, such as those highlighted below:
The proposed study in multi-disciplinary in nature. It cuts across different disciplines, such as politics, technology, and economics.
The proposed study addresses a contemporary issue that commands attention of scholars in the world. The issue cannot be adequately explained by the use of data points alone.
As a research method, case study has been used with a measure of success in most qualitative and quantitative studies in the past. As a result, it is dependable compared to other methods.
A case study is conducted using various techniques, meaning that the study can benefit from the strengths of such techniques.
In the proposed case study, the researcher will collect data using semi-structured qualitative interviews.
Study Technique
There are various reasons why the consultant recommends the use of a semi-structured interview.
A fully structured interview is comparable to a survey. Using such a technique will provide little information inadequate to explain the phenomenon at hand or answer the research questions (Kumar 2011).
Using an unstructured interview is not an option because it will be difficult to extract the required information from the informants (Kumar 2011).
Interviewing Technique
The consultant proposes the use of non- directive interview, where the participant is asked a specific question and given time to provide a response and an explanation. The researcher will only interrupt the informant where necessary. Otherwise, he will simply note the keywords from the response and proceed to the next question if he believes that the answer is adequate enough. The researcher will try to remain within the context of the research problem during all interview sessions.
Interview Setting
The consultant proposes a face- to- face interview setting, unless it is impractical. The researcher will conduct all interviews in a natural setting, where the possibility of disturbances and interruptions is minimised. The purpose of the study is to determine how Nokia can make a comeback and establish a sustainable future business model in spite of the competition posed by the Silicon Valley giants.
In light of this expectation, personal interviewing will be most appropriate to determine the current position of the company and what needs to be done with regard to the smartphone market. There are other options, such as video blogging, which are probably cheaper than conducting face- to- face interviews. However, the researcher will be more interested in capturing the personal experiences of respondents, which cannot be adequately attained using Skype or Facebook video conferencing.
Sample Selection
The sample for the proposed study will be selected randomly. It will include two renowned software application developers, two Nokia senior managers, and two specialists in the field of economics. The software developers will be included because the future of the smartphone market is in the development of applications (apps). Nokia is currently lagging behind in the development of apps compared to Apple and Google, which are miles ahead. The managers will provide the researcher with information regarding the possibility of Nokia to remain relevant and maybe regain its leadership position in the telecommunication industry. The economists will provide information on the economic status of Nokia and its competitors.
Viability and Reliability
The validity and reliability of a study determine the quality of the research (Coleman 2011). Research quality is a common term in quantitative study, where there are data points to analyse. Nonetheless, there are defined criteria to put in place to improve the quality of qualitative research. Validity refers to the appropriateness of the instrument used to collect data. In the proposed study, the researcher will use an interview guideline.
To ensure that the guideline adopted is appropriate for the study, the researcher will formulate it after widely reviewing available literature. The literature review is provided in the next section of this proposal. To enhance the reliability of a qualitative study, the researcher must refrain from providing their personal interpretation. They should go with the voice of the data. The researcher will try as much as possible to remain objective and present all the findings just as provided by the informants.
Literature Evidence Review
In section 1, the consultant highlighted several aspects of the proposed study. The highlighted aspects included, among others, the research questions and the research objectives. In this section, the consultant provides a critical review of the literature in this field. The section is divided into three subsections, which are introduction, analysis of relevant concepts, and conclusion.
Under introduction, the consultant will provide information on the rationale for the topic, the boundaries within which the proposed study will be conducted, and terms of reference.
According to Albanesius (2012), most reviews touching on Nokias latest smartphone, Lumia 900, are largely positive. It is noted that the positive reviews represent a very significant achievement for both Microsoft and Nokia companies, which are collaborating to make an impact in the smartphone industry. Lumia 900 was received well in the United States, and it is currently available at AT&T at half the price of comparable smartphones.
In one of the most respected phone reviews, the product is described as powerful, fast, and beautiful (Segan 2012). Alexis (2012) notes that the phones hardware and software are more beautiful and presentable compared to those of other smartphones, such as Android and iphone. In addition, most of the phones functions are as powerful as those of smartphones manufactured and distributed by competitors. However, Alexis (2012) is of the view that Lumia has less apps compared to competing phones. The lack of adequate apps is a serious flaw that should be addressed if the company is to move forward in the competitive smartphone company.
Woyke (2011) laments that many people, just like him, are not very pleased with this phone. He asserts that in comparison to the most recent Galaxy Nexus and iphone 4S, Lumia 900 has many drawbacks. The drawbacks must be addressed for the company to regain its foothold in the telecommunication market. Ammisetti (2012) averred that although the phone is good looking and attractive to the eye, it has many limitations. For example, the phone has a single- core processor, which negatively affects its functionality. In addition, the phones RAM and resolution display are lower than those of the competitors. Such issues pose considerable challenges to Nokia as far as operating in the smartphone market is concerned.
The above are some of the issues that inform the projects terms of reference. In addition, the issues form the rationale or justification for the proposed study. The project is limited to Nokia and the companys future in the smartphone industry. The next section of the proposal highlights various concepts relevant to this field. Some of the issues addressed include the companys five forces analysis, PEST analysis, and value chain analysis. The aim is to examine how Nokia can sustain its future business in the midst of stiff competition evidenced in the smartphone market.
Analysis of Relevant Concepts
Five Forces Analysis
New Entrants
The threat of new entrants in the smartphone market is quite low because of the significant amount of initial outlay required. The major companies in the industry are well established and have well defined brand loyalty. In addition, the market is getting saturated as Google collaborates with, among others, Motorola, Samsung, Techno, and Sony Ericson to produce cheap Android phones (Sorensen 2012).
Some of the most successful companies in the market, such as Apple Inc., have patented most of their technological innovations. A new entrant will have to come with their own software technology, which is quite expensive. Alternatively, a new player can choose to collaborate with established software companies. However, the costs involved are way too high. Moreover, most companies are not willing to form collaborations, as witnessed in the case of Nokia approaching Google before the Nokia-Microsoft collaboration (Avenell 2012).
Competitors
Competition has crippled Nokias endeavours to remain relevant in the smartphone market. Although RIM is regarded as the pioneer in smartphone technology, the company has gone under because the management failed to take the right direction after coming up with the technology. Currently, the main competitors are Apple and Google. The two companies will remain ahead of the competition for a long time because they have what it takes, which is experience in software technology (Sen 2012).
It is difficult to overcome competition in the smartphone market because Nokia is dealing with some of the most successful companies in the world. For instance, in 2011, Interbrand named Apple Inc. the second most valuable company in the world after Coca-Cola. In the same year, Apples profits were higher than those realised by most smartphone companies, including Google and Microsoft. However, Nokia displays a great deal of resilience. The management wants to prove that the company can lead in the manufacture of both feature phones and smartphones.
Suppliers
The bargaining power of suppliers in the telecommunication industry is between medium and high. There are several major distributors in the market, but most of the companies have long standing contracts with suppliers. For instance, the main supplier for Microsoft and Nokia is Intel, while Motorola is the main supplier for Apple. In this case, the smartphone manufacturers rarely change suppliers because such a step will reflect negatively on the market. Most customers have their own preferences and tastes (Savitz 2011).
Buyers
Buyers in the smartphone market have weak bargaining power. Individual customers cannot influence the prices of phones. On their part, corporate consumers constitute a small fraction of the market. According to Holbein (2012), buyers in the smartphone market may change the companies they buy from, but they make such decisions on the basis of other factors and not price.
Substitute Products
The threat posed by substitutes is medium. Most people are still using feature cell phones. However, a recent study found that one out of every three feature phone owners will replace their phones with a smartphone within the next twelve months (Savitz 2012).
PEST Analysis
Political Factors
Nokia operates in countries with very different political outlooks. The ability of the market to sustain its business operations is affected by political stability in the markets. For instance, Nokia shifted a major manufacturing plant to India in 2010. However, the employees worked for a few months and went on a go-slow (Yoko & Doz 2012). Politics affect the purchasing decisions made by corporations and individuals. For instance, the tax charged on the company in different markets determines the degree of investment and the prices of the products. In the United States and the EU, various studies were conducted to determine the impacts of mobile phone radiation on the health of users. The findings of such studies may have a negative impact on the companys future comeback (Mlot 2012).
Economic Factors
The economy determines the consumers purchasing patterns. Most countries are still struggling to deal with deficits caused by the recent global economic downturn. In comparison to Google and Apple, Nokia has made more investments in Asia. Asian countries are still economically stable because they were only peripherally affected by the downturn. Nokia can use that opportunity to market its cheaper smartphones in the continent. However, Nokia derives more than 40% of its sales from the European market, which is still reeling from the effects of the recession (Lev-Ram 2012).
Social Factors
In the United Kingdom, there are at least 58 million registered cell phone users. The number is higher in other nations with populations higher than that of UK. Such statistics imply that the cell phone is a very successful consumer device. The number of people using the cell phone is increasing. As noted earlier, most consumers are shifting from feature phones to smartphones. The expanding market means that Nokia has a high potential of making a comeback. Employees are the most essential social factors for a company. They determine how the public views the company (Leach 2012).
Technology
Technology is an essential factor as far as Nokias comeback is concerned. The company is still lagging behind in software technology. Collaboration with Microsoft and investment in research and development is essential as far as the companys future is concerned (Kolakowski 2012).
Value Chain Analysis
Inbound Logistics
The company acquires raw materials from suppliers and distributes them to production plants as needed. Nokia ensures that all suppliers make their deliveries on time. In most cases, Nokia does not change suppliers unless there is a breach of contract (Avenell 2012).
Operations
Nokia estimates the demand for products before manufacturing them. The company has a detailed consumer database, which is used in estimating demand (Avenell 2012).
Outbound Logistics
Nokia sells directly to consumers, unlike the competitors who employ the services of distributors. Direct selling makes it possible for the company to keep track of market dynamics. Consequently, the company manufactures products that are in line with current demand (Savitz 2012).
Sales and Marketing
The company has invested heavily in marketing. Selling directly to consumers has helped the company to reduce its marketing budget. From 2011, Nokia has increased the funds earmarked for the marketing of Lumia and Asha smartphones (Mlot 2012).
Service
Nokia conducts annual training for all segment managers. In addition, the company invests in capacity building for the employees to help them discern changes in consumer trends. The empowered employees are able to identify threats and opportunities in the competitive market (Lev-Ram 2012).
Human Resource
According to Stephen Elop, Nokias CEO, the company is aiming at reclaiming its position in the telecommunication industry. The employees of the company are focusing on value addition and customer satisfaction (Segan 2012).
Conclusion
In part two above, the consultants highlighted some of the concepts salient to the proposed study. In conclusion, the researcher will highlight the various issues addressed in this research proposal. They include, among others, researchable areas and the adequacy of the literature available for the research.
For a very long time, Nokia Company was regarded as one of the most successful organisations in the cell phone manufacturing and distribution industry. In a nutshell, the company was regarded as the market leader in this industry. The leadership and the ability of the company to sustain its future business in the industry are threatened by the entry of new competitors in the smartphone market. The competitors have a wide experience in software development. It is noted that the dominance of feature phones in the telecommunications market is slowly coming to an end. As a result of this, the company is shifting its focus towards the development of its own smartphones.
The number of customers loyal to the company is still high. Recent statistics put this number at 1.3 billion customers. However, the growth of the company has slowed drastically in the last ten years, with 2011 recording the least rate of growth compared to other years. In early 2012, it was reported that Samsung has overtaken Nokia as the number one supplier of mobile phones. During the launch of the iphone 5, Tim Cook, Apples CEO, announced that the company was not interested in growth in the sales of iphone in the smartphone market.
On the contrary, the company was interested in growth in the entire telecommunication industry. He proceeded to present outstanding growth rates in emerging markets, such as Asia. Nokia needs to succeed and sustain its future business in the smartphone market. To this end, the consultant proposes that Nokia should focus on developing the Lumia series while reducing the price of its smartphones in the emerging markets.
References
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Marketing is defined as a management process that is responsible for the anticipation, identification and the satisfaction of the customer requirements profitably.
Marketing can also be understood as an organizational function and combined set of processes that are aimed at creating, communicating and delivering value to customers as well as the managing of customer relations in such a manner that will benefit the organization and the stakeholders. This essay will analyse the marketing concept of Nokia mobile phone Company in the UK.
Product Brand: Macro and Competitive Environments
Brand analysis
Nokia is considered to be an umbrella brand with a lot of products under it. It is considered to be a predominantly 2G manufacturer. Nokia is divesting its businesses and it needs to add value to its current products as well to shift to smart phone category to tap into the growing market. Nokia company ha various brands.
Macro elements are the uncontrollable variables. This involves the understanding of the new markets while at the same time monitoring the existing markets. In analyzing the macro environment, it is imperative that we place into consideration various environmental forces that have an impact on the Nokia marketing in the UK.
It has been established that Nokia has a strong market base in United Kingdom, and it is largely due to their product base, quality of the products and the powerful brand image. Nokia has the best brand value. Macro environment involves those factors that are beyond the direct control of the Nokia business but have an impact on the success of the business though minimal.
A change in the currency market can have an impact on the sales of the products as it was witnessed in 2007 when the dollar rose by 2 dollars to the pound hence making UK the most expensive mobile market. These macro factors have the capability to alter the business environment of the organization. The macro environment can be analyzed using PESTEL analysis.
Regarding product brand, consumers have maintained personal and permanent relationship with Nokia brand. Nokia has a brand reputation that ensures its market share increases. Nokia pays a lot of attention to their brands and competition in the mobile industry since brand reputation is becoming crucial for the purchasing behaviours of consumers (Forsyth, 2007, p. 71).
Effect of the Industry in General
With the innovations in the technological market, it is obvious that Nokia has several competitors; these include Sony Erikson, Motorola, Samsung, Siemens and Panasonic. With these competitors Nokia must be ahead of others in order to ups its strategies and it has emerged as the number one selling brand in the market.
Mobile technology has provided a platform of the delivery of new products that have been created to complement the existing ones or even to develop a new brand line of business. These advancements can take the shape of optimized website, services delivered through mobile phones and other mobile applications.
The UK mobile sector has drastically been liberated and the rationalization of retails stores, and retail networks has led to a considerable reduction in the number of stores per firm. In the UK, a mobile company has to satisfy the requirements that are established by the scientific and technical knowledge and the requirements of the UK consumer Act (Boone & Kurtz, 2010, p. 124).
PESTEL Analysis
These are the various factors that affect the decisions of the managers of organizations, and they include demographic changes, government policies and changes in taxations. PESTEL analysis concerns the analyzing of various factors, which include technological, social-cultural, economic, environmental, economic, political and legal factors.
Social-cultural
We live in a world of consumption where we only consume products, and the products have served to manifest or act as cultural tools of our materialistic society. These products have both materialistic and utilitarian value and are often sold to reinforce our cultural scene.
It is therefore, imperative to examine the products or the brands that are acceptable or not acceptable to humanity as well as analyze the advertisements that are appropriate and match the products. Changes in the social grounds have a lot of impact on the customers demand of the companys goods and also influence the availability and the willingness of people to work in the company.
In the UK, the population is an aging one, and hence it has increased pension payment by companies because their staffs are living longer. This also concerns on how Nokia will blend with other societal components like social class and culture, lifestyle, demographic and psychological factors that form the society. Nokia produces different phone models into the market to satisfy all the individuals.
Technological
This regards the degree to which the technology is embedded in our society or the technological culture that has the powers to control the technical nature of the products in the market, and it can dictate the extent and the methods of the product communication and the acquisition. The acceptance and acknowledgement of technology in daily life is not just a matter of formal education, but it is also a matter of societal norms.
The change in the needs of the consumers and the preferences of fast technological development has been deemed to have a negative impact on the buying behaviour of the consumer in the Nokia market segment. Nokia has various advantages as compared with its competitors due to their economies of scale and highly innovative and advanced technology. New technologies lead to the creation of new processes and products.
Music, the internet enabled and HD screens are some of the products of advanced technology. Technology has reduced costs, enhanced quality, and it has also facilitated innovation. Technological development has a lot of benefits to the Nokia Company, and it will help provide its products. The success of Nokia products is founded on the constant and consistent innovation of human technology and by exploring various ways of exchanging information Nokia allows its users to get more out of life (Knowledge Base, 2012, p. 1).
Political Factors
These refer to government policies that are implemented like the degree of economic intervention and the extent to which the government wants to subsidize some firms or commodities and also the governments priorities regarding business support. Political factors have a lot of impact on the health of the nation, workforce education and economic infrastructure. This is critical for Nokia because various governments have different legal and political platforms.
Nokia in UK has abided to the ground rules and regulations that govern the UK market and it has tried to prohibit some actions in order to withstand the demand of international trade. Nokia works with the UK authorities to to gain the competitive advantage of the UK market. The compliance of Nokia to the laws of phone usage and copyright keeps them ahead. Since UK is a deregulated market, Nokia operates free of government intervention.
Economic Factors
These factors include inflation, exchange rate, economic growth and taxation. All these have a lot of impact on the behaviour of firms. High interest rates can, for example, hinder investment because it will cost a lot to acquire a loan. Strong currency makes export business dealings to be harder since it leads to strong increase in price. Inflation has the effect of provoking high employee demands, and it raises costs.
Economy dictates the production and the consumption of goods and services. Concerning Nokia, the economic system is critical since it dictates sales, profits and production. For future planning and financial safety, Nokia should analyse the national economic system of UK. Increase in GDP is an indication that the people will have high disposable income which will make the consumers to be more selective when choosing their phones and price will be a factor here.
Environmental Factors
These include the changes in weather and climate; changes in temperature have a lot of impact on various industries. Consequently, some climate changes have occurred due to global warming, and greater environmental factors have taken place and have developed into a major issue that firms should consider. Most companies are moving towards embracing environmentally friendly goods and processes.
Legal Factors
This concerns the legal environment to which the firms operate in. There have been various legal factors that have influenced business and firms operation in UK. These legal changes include the introduction of age and disability discrimination legislation and an increase in the minimum wage threshold; all these affect the Nokia operations. Legal changes have the effect of affecting a firms costs and demand.
Using PESTEL does not inform the managers a lot, and it is upon the managers to think about the factors that are likely to change or affect their business operations or to identify factors for their own environment. In the UK, it is the Confederation of British Industry that serves to represent all British firms in the event of discussion with the government (Lamb & Hair, 2009, p. 56).
Perceptual Map of the Competitive Environment
Perceptual maps indicate the attributes that characterize the consumer decision making which later become focal points when designing the product and making advertising decisions. It also demonstrates the strength of the firms brand that makes it score in the mind of consumers. The perceptual market map of Nokia mobile product in the UK appears as demonstrated below:
Marketing Program, Elements Employed
The term, marketing mix is used to describe the set of activities that make up a firms marketing programs. Among the various elements of the marketing mix are: place, product, people, process, physical evidence, promotion and price. Marketing mix are the tools that are used to position the product into the target market.
Product
This product decisions begin with the understanding of the product in the market. Product offering is not the only thing but is considered as a total package of benefits that are obtained by customers. The product is analyzed from the perspective of customer value.
This value can be analyzed based on the following aspect of mobile phones: their physical product and shape, brand name, reputation of the company, convenience of operation, convenient availability and financial plans. It is also imperative to answer the following questions with regards to the product:
Does the product satisfy the intended customers in such a manner that will guarantee profits to the company?
Does the product provide an opportunity for differentiation from competitors just as the benefits are delivered to consumer and the impact of the product in the market?
It is necessary for the firm to continuously learn about the reactions from the consumers to make suggestions about the repositioning in the market (OECD, 1997, p.12). Summarily, the product deals with the design, features, packaging, variation, brand, quality and quantity. For a product to occupy a distinct place in the market, it should differentiate itself from its competitors.
This can only be achieved by positioning the product in such a manner that the customers can perceive the product differently. Any element of the marketing mix can be used to realize a differentiated positioning. The Nokia mobile phone company sells their products to the entire customers, but their distribution options vary based on the market segment (OECD, 1997, p. 234).
Place
This concerns marketing channels; a marketing channel is understood to be sets of mechanisms or the network with which the firm ventures into the market ranging from the demand generation to the physical delivery of the product.
The distribution of the product to the market can either be direct or indirect; direct distribution does not involve any independent party between the firm and its consumers while indirect distribution involves some third party or the middlemen who might have been contracted to work for the firm (Burnett, 2007, p. 19).
The marketing channels can be actualized through distribution which involves making the product available to the market. Examples of marketing channels are retailer, wholesalers, dealers, agents, franchisees and multiple stores.
Price
This is a monetary value that is attached to a product. Price transmits a message about the value of the product, its status and the perceived quality. Prices can be cost based or demand based.
Process
Process is a critical element of marketing that is applicable in the identification of opportunities, development of strategies and the allocation of resources. The company has established processes that are geared towards handling the complaints of customers and process of identifying the needs of customers and their respective orders. Nokia has a well-planned process that defines how the customers receive their services and check their accounts.
Promotion
These are understood to be activities that seek to expand the aims of the organizations through communication with the aim of eliciting a positive response. Promotions can be physical like offers or visual like advertisement and are only intended to deliver a specific message. It is considered those activities that the company indulges in to further their objectives.
Nokia associates with major mobile providers in the UK like the Orange and T-mobile that have launched their 3G services to enhance their market promotion. They also advertise their new products in the media, i.e. televisions, radio and newspapers. Due to the flourishing football sponsorship business in UK, it is necessary for the Nokia Company to sign sponsorship with major football clubs.
They should also create outdoor advertising like the use of videos and images. Nokia also sends messages, calls and emails prospective customers about its products in the market. Nokia also has adopted door sales strategy that involves visiting customers in their residences or place of work to inform them on new arrivals (Gillespie, 2007, p. 5)
Physical Evidence
Nokia has resorted to write some articles that are aimed at exciting the customers about Nokia prices and service. Nokia also provides after-sale services and support to their customers in order to make them comfortable and develop a better understanding of their products. Nokia has also developed a culture of complying with specific laws regarding their product quality and safety, which are geared towards protecting their consumers.
People
Nokia Company trains their employees to be customer cantered and to enable them to develop good attitudes towards customers. Nokia also has the attitude of recruiting native employees from UK since they know the tastes and the habits of the native customers. Nokia also emphasize training of its dealers to encourage them to serve their customers and clients well (Scribd, 2011, p. 2).
Recommendations
Profitability is the primary objective of various firms, and marketers are well aware that profits are the revenues of the company. Since pricing is one of the conspicuous components of the marketing mix of a company, various businesses may be tempted to apply it in gaining competitive advantage over its competitors.
Nokia, in order to meet price of its competitors, has applied strategies like enhancing the quality of their products, establishing consumer relationships and educating consumers about their products.
For the company to increase its market size and profitability, good marketing strategies and marketing planning are essential. It is imperative that the Nokia Company writes down a perfect marketing plan while examining the business environment. A good marketing plan should contain current and potential marketing points to exploit. The marketing manager should place a lot of focus on the resources of the organization like costs of production, the brand image, employee capability, available technology and financial resources.
Analysis of marketing environment is necessary since they directly affect the organization or might hinder the implementation of the organizations marketing plan. This is referred as an environmental scanning, and it serves to identify the market threats and the opportunities that are necessary in the designing of the market strategy.
In the UK markets, the brand or rather the product name is very important in terms of the brand image, and all that accompany it. In the case of Nokia, for example, the brand image begins from the technological design of the phones, and the features that the phone has and also its maintenance costs and the safety standard as well as the way it is presented in advertisement and sales promotions.
To achieve a marketing success, it is necessary for the customer to realize satisfaction, and they should be the companys number one priority. Effective communication and gathering of information enable a company to develop marketing mentality. It should be mentioned that the primary reason for the existence of a company is the customer.
Marketing also demands that work should be distinct from the other business opportunities and it is considered central to the entire organization. Marketing is a critical aspect of business and if customers find something in their product they do not like then they look for it somewhere else and they may go to the competitors.
The company should also develop a strategy that is unique and consistent with its present circumstance. It is necessary to adopt major marketing principles that are unique to a product of a company.
Building a competitive and sustainable advantage
This means having the advantage and developing the capacity to sustain the advantage. This implies that Nokia should maintain its competitive advantage by producing and establishing quality products and laying stake in a market position that is unique. Nokia should build its own competitive advantages as opposed to imitating their competitors. Marketing managers should develop focus on the skills of the company.
Managers should also identify alternatives; this can be realized by using Ansoffs strategic matrix that exists to match products with the market. Nokia should adopt the following alternatives:
Market penetration: this involves the ability of a firm to increase its share among the clients, and it can be achieved by launching an aggressive advertising and well planned sales promotion.
Product development: Nokia should adopt this strategy of creating new products into the market. Managers should pursue this strategy by following the preferences and tastes of their customers. Managers should have a better feeling of the likes and the dislikes of their customers. Managers should also make use of the existing channels of distribution ((Mobile Beacon, 2011, p. 1).
Diversification: Nokia should endeavour to introduce new products into the market so as to attract new customers. They should introduce, for example, more twin SIM card-phones and 3G enabled phones to tap into the growing demand and to establish a new marketing niche that is dictated by the market trends.
Pricing strategy: this is a fundamental and strategic element, and it is related to the positioning of the product in the market. Pricing affects elements of the product feature, sales promotion and the channel decisions.
An effective pricing strategy can be developed from the following process: developing a marketing strategy, making market mix decisions and calculating of costs. Marketers price their products in a manner that receive fair value since price is the basic parameters by which the customers judge the product, and it also reflects the practices of the organization (Lamb & Hair, 2009, p. 56).
References
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Nokia Corporation is an international communication firm whose headquarters are situated in Espoo. The company is popular for manufacturing mobile phones. In addition, the company manufactures other consumer products like mobile networks, set-top boxes, and apparatus for broadband internet.
Moreover, Nokia Corporation supplies the motor industry with car speakers (Kautto 2009). Currently, the company dominates the mobile phone market with a market share of over 38.6 percent. In 2010, Nokias financial income was $2.6 billions. Engineer Fredrik Idestam established the company in 1965.
During this period, the company dealt with paper products, which it exported to Great Britain and Russia. In early 20th century, the company concentrated on manufacture of wheelchair frames and rubber boots. Even today, some brands of bicycle tires bear the companys name.
The modern Nokia Company was established in 1967. The management brought the former paper mill section and the rubber works together to establish a technological company. In 1981, a mobile network was launched in Scandinavian, prompting Nokia Corporation to manufacture its first car phones.
In 1987, the company manufactured its first mobile phone. At the same time, Nokia Corporation helped Finland, Germany, China, Poland, Italy, and Mexico to repair network for their entertainment industries (Ropponen 2008). In 2010, Stephen Elop joined the companys management team.
Nokia Corporation merged with Siemens to form one of the biggest telecommunication networks dubbed Nokia Siemens Networks.
Currently, Nokia Corporation is among the companies that manufacture quality smart phones globally. The company continues coming up with novel inventions in line with the emerging technologies.
Factors influencing organizational change
In 2004, Nokia Company started restructuring its operations as a way to satisfy customer aspirations. The company came up with a program dubbed the Nokia Booster program , which aimed at bringing together online customers and the companys strategic development (Schienstock 2004).
A number of factors contributed to the restructuring process. Among them include desire to, attain global coverage, embrace employee empowerment, promote co-creation, and support the community.
One of the key factors that prompted Nokia Corporation to come up with the Nokia Booster program was the pressure to exploit the global market. The company was in need for establishing a single access point through which it could communicate with all its target consumers, and employees worldwide.
Prior to the program, the company relied on a communication structure where information was conveyed from the top management, down to the employees through a number of senior staff (Schienstock 2004).
Such a communication structure was slow. Consequently, the company required a communication structure that could keep pace with the contemporary marketplace.
To enhance its performance, Nokia Corporation required having a platform through which it could share its agendas with employees. Previously, employees made limited contribution to organizational policies (Krell 2000).
To make sure that employees backed the companys agendas, Nokia Corporation had to come up with mechanisms that would captivate the employees. The company learnt that employees could be active if allowed to manage debates that fascinated them.
To achieve this, the company assigned different employees to different agendas and requested them to share the agenda with the public. This helped the company to gather information from the public, therefore, aligning its operations with customer needs.
The program helped the company to reach its target customers in remote areas where it was hard for employees to reach (Nonaka & Teece 2001).
Through the program, customers shared their views about the company and changes they wish the company to make, thus, spurring employee creativity. Indeed, the program led to numerous innovations in the company.
Management team in Nokia Corporation maintained that, for the company to perform, it required exploiting the vast experience and knowledge; its employees possessed. Nevertheless, it could hardly achieve this without fostering cooperation between the employees.
Senior managers came up with ideas concerning the innovations they would like to introduce into the company (Masalin 2003). The company then disseminated the ideas to employees and customers through the Nokia Booster program.
The program helped the company to establish a platform by which it could get opinions from all the stakeholders, therefore, coming up with products that meet all the desired specifications. Besides, the company needed to be sure that its employees are aware of the value of the projects the company initiates.
Nokia Corporation could achieve this by involving the employees in formulation and implementation of the projects (Masalin 2003). The Nokia Booster program acted as an avenue through which the company fostered cooperation between employees in different departments.
In a span of six months, the company had started witnessing inventions as employees seek to enhance organizational operations. In addition, employees shared ideas on changes they considered unfeasible, thus, helping the company pursue feasible goals only (Masalin 2003).
How organizational change unfolded
In 2004, Nokia Corporation made it public that it intended to begin organizational change, which aimed at helping the company meet changing consumer needs. The company reduced the number of its business units to four. It implemented the entire change within one week.
To implement the change, the company required a hundred employees taking new jobs. All the other employees retained their original jobs. Nokia Corporation reconstructed its initial modular teams (Ropponen 2008).
The company established a common platform through which all employees shared their ideas to help the company to address customer ambitions.
Ropponen posits, The genesis of the Booster Programme, launched in late 2008, could be traced to the wide involvement of the strategy-planning process and to the flexibility and project orientation of the modular structure (2008, p. 163).
The program started with a design team led by Ian Gee and Maximilian Kammerer. The design team argued that the traditional system of communication made it hard for the company to achieve its goals. Hence, the company required a platform that would help it involve all its stakeholders in pursuing organizational goals.
The design team resolved to organize a workshop with team leaders followed by the much broader involvement of the whole community through an online social network community (Masalin 2003, p. 69).
The corporation organized for workshops in different cities across the globe. At least a hundred change leaders participated in every workshop.
After the workshops, participants went back to their organizations, where they recruited employees into the adopted change processes. Online community took the centre stage in steering the changes.
This mishmash of traditional communication mechanisms and novel forms of relations established an upsurge of fervor (Masalin 2003). The Booster led to open discourse between frontline workers, community members, and managers about challenges affecting the company.
The online community furnished employees with information concerning potential changes that could benefit the company, therefore, helping them initiate innovations.
Reference List
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Companies and other organizations put into strategic action initiatives that direct organizational change and contribute to accomplishing strategic goals. The ability of a workforce to be competent, knowledgeable, and equipped with the resources necessary to implement an effective strategy is essential for successful strategic execution. It is crucial to allocate resources, such as separating the workforce into areas of expertise and departments, establishing formal lines of authority, and devising systems to coordinate the many duties performed by the company (Lamberg et al., 2021). However, the growth of organizations and the rapid pace of market environments present strategic challenges. These challenges can take the form of issues concerning leadership, legal or legislative issues, environmental challenges, challenges concerning human resource management, challenges concerning research and product design growth challenges, or potential financial problems. The Nokia Corporation, its history, the market industry it operates in, its mission and vision, and its leadership are investigated in this study. In addition, it examines the companys primary strategic obstacle, which is a barrier to the organizations development.
The history, Vision and Mission, Purpose and Value, Potential Competition and Leadership of Nokia Company
The mill operation that would eventually become Nokia Corporation was established in 1865. After having a presence in a wide variety of industries throughout its history, including cable, rubber boots, televisions, tires, papers, and most recently, mobile phones, the firm has successfully carved out a niche for itself in the technology sector over many years. According to researchers findings, Nokia completed its transition into the telecommunications business in the 1990s (Morton et al., 2018). By 1998, the company had established itself as the mobile phone brand with the highest sales volume, the most significant proportion of the market, and the highest profit.
In the years that followed, in 2003, the company released its first camera phone, which assisted in firmly establishing the companys place in the mobile manufacturing market. Notably, in 2011, Nokia entered into a brilliant strategic partnership with Microsoft Corporation to assist in addressing the growing competition from Apples iOS and Googles Android operating systems. This partnership was made to help Nokia corporation manage the increasing competition (Donaldson, 2019). In addition, the acquisition of Alcatel-Lucent, a French-American telecommunications equipment company, by Nokia Corporation in 2015 helped it diversify its portfolio and customer base, enabling it to remain relevant in an industry prone to volatility.
Connecting People and Very Human Technology are the companys stated missions and goals. The promise made by Nokia is that it will make people feel closer to the things that are essential to them. The leadership of a company selects inspiring words to compose a vision statement. The purpose of this document is to clearly and succinctly communicate the path the organization intends to take in the future (Morton et al., 2018). The firms mission and values can be effectively communicated via a clear vision statement, which also serves to drive the workforce to realize an attractive and inspirational common vision of the future. A companys activities and the driving force behind its existence can be summed up in a mission statement. It is possible for a companys mission statement to evolve, particularly in rapidly developing industries, if new strategies are implemented, as is the case with Nokia Corporation.
The Nokia firm strongly emphasizes respect, achievement, renewal, and challenge as its core values. These values are a compass for the companys expansion and overall performance in the marketplace. In the most fundamental sense, they serve as a shared basis that enables the employees of Nokia to construct a single business, collaborate effectively, and make sound choices. According to Janes & Sutton (2017), a companys values are comprised of the beliefs, characteristics, and behavioral norms that the workforce is expected to demonstrate while conducting the companys business and pursuing the companys strategic vision and strategy. These beliefs and traits are referred to as core values.
According to Donaldson (2019), Nokia has gone through multiple leadership revolutions in order to strengthen its business performance and aid it in reestablishing a competitive market position. These are two things that have been synonymous with the company ever since it was first established. These adjustments were undertaken in order to turn around the performance of the corporation and to support it in reestablishing itself as a competitive presence in the market. In recent years, Nokia, a business formerly the market leader in mobile phones, has been confronted with a wide variety of obstacles. These challenges include fierce competition, diverse demographics and consumer preferences, and company restructures. Because of the intense competition in the industry in which Nokia works, the company must continuously pursue new avenues of business strategy and make substantial financial investments in marketing if it wants to remain relevant (Donaldson, 2019). The iOS and Android operating systems, developed by Apple and Google respectively, gave rise to the competition. In addition, the decision that Nokia made, in the beginning, to continue using the Symbian operating system for its mobile phone software was a poor one, which led to Samsung corporation gaining a competitive advantage over Nokia.
News Item Affecting the Company and Posing a Challenge to its Strategy
According to Morton, Stacey and Mohn (2018), the Nokia corporation suffers from ineffective innovation management. When one considers the companys position as a global mobile technology pioneer and its lack of innovation, its clear that the company has lost a significant amount of market share because of this. The fact that Nokia was once the industry leader in mobile technology led to the corporation becoming complacent about creating new technologies to satisfy the ever-evolving requirements of consumers. The organization possesses isolated hubs of remarkable creativity, but it does not have an overarching plan to use this potential. Companies like Apple and Samsung, known for their high levels of innovation, are quickly taking over that market share.
The companys primary business strategy is examining Nokias rivals as a means of navigating the shifting landscape of the technology industry. It requires a clear understanding of who the rivals are and instilling a sense of urgency in the activities the firm engages in to stimulate growth. Therefore, ineffective management of innovation stifles growth, which is frequently seen as a result of desirable by-products due to their appealing qualities, reasonable prices, ability to satisfy consumer wants, and attractive appearance.
Conclusion
A firms strategy can assist in determining the path that the company will follow in the coming years. It provides documentation of how a corporation intends to attain its objectives. However, the implementation of the plan is hampered by obstacles such as inadequate innovation management, as demonstrated by the Nokia firm. The technology sector is subject to unpredictability; Lamberg et al. (2021) cite several instances, including market needs, the development of new technologies, and the emergence of new competitors who bring innovative business practices and cutting-edge innovations to the market. When developing competitive advantages in the smartphone sector, Nokia faces some problems. Due to the rapid pace at which technology advances, it is therefore of the utmost importance to devise efficient ways to ensure its continued existence and expansion.
References
Donaldson, C. (2019). Nokias 7-step approach for turning its managers into real leaders. Web.
Janes, A., & Sutton, C. (2017). Ebook: Crafting and Executing Strategy: The Quest for Competitive Advantage. McGraw Hill.
Lamberg, J. A., Lubinait, S., Ojala, J., & Tikkanen, H. (2021). The curse of agility: The Nokia Corporation and the loss of market dominance in mobile phones, 20032013. Business History, 63(4), 574-605.
Morton, J., Stacey, P., & Mohn, M. (2018). Building and maintaining strategic agility: a plan and framework for executive IT leaders. California management review, 61(1), 94-113.
The world’s appetite for technology has grown tremendously over the years. Everyone wants to lay their hands on the latest technology or at least one that is within their means. This has had a great impact in the electronic and communication market in which the Nokia Corporation has for many years maintained leadership (Nokia 2011).
The value of the company has grown and matured in the stock market and secured a position for the company in as far as investor confidence is concerned. There have been numerous alternatives of finance available for the company one of which has been equity futures. The consistent current financial profile has enabled the company convince their investors to invest their properties in the company.
Argument
The company’s shares have for the longest time fallen below the 6 euro mark in share value with the margin of change being below 20 %. The company has undeniably been on a down ward trend with figures falling to 4.5 Euros an all time low. The quarterly outlook has shown a consistent drop in the share price (Yahoo Finance 2011).
This situation cannot be criticized since Nokia has made its move into the smart phone production. The level of sales has dropped due to the change in consumer taste in favor of Smartphone technology. This has caused the company to partner with other companies such as Microsoft to try and restore the market leadership as well as recover the 18 % plunge in profit margins (Yahoo Finance. 2011).
The share price will be expected to remain the same come next year due to the slim margins of sales that have been experiences these year. The consumer base will take time to embrace the new changes in the mobile software and therefore the shares will take time to get back to normal. This will proceed on to the first and second quarters of the year since during this time the company will be experiencing the recess period.
The third quarter will however bring in improvements in share value owing to the change in the price earnings ratio that is expected to increase. The fourth quarter will definitely record a substantial growth due to the high season of holidays and ceremonies around the globe (Arthur 2011).
He company’s risk portfolio stands at a positive side for the investor since the level of volatility of the shares against the stork markets index has a positive trend. The market share returns have a high level of sensitivity to asset returns.
This ,makes the shears more risky but much more profitable for an investor who purchases futures. Level of sensitivity. For instance, the company has made an 11.6 billion euro deal with Microsoft for the acquisition of the right to use their windows mobile software’s along with other handset applications (Orlowski 2011).
Microsoft enjoys a worldwide market leadership and command and will go a long way in improving the company’s asset value and returns. In effect the value of the shareholders wealth is expected to increase by a lesser but equally substantial margin. This has been the trends over the past few years with each change marking the introduction of a new product or a modification of an existing one. However, the share price has had a sharp margin of change which makes the stock risky but lucrative.
Besides futures, there are several other investment vehicles available in the company. Preference shares for instance attract a return that is slightly above the banks savings rate of return which makes investment in the company more profitable. There is however, a greater chance at high profitability in the acquisition of futures as compared to all other investments.
Conclusion
The value of 100 shares in the Nokia Company will be expected to rise by a fair margin (Butcher 2010). This margin will provide returns that are greater than the risk free rate of the savings and certificate deposits in banks since the company has a positive beta in as far as the market portfolio is concerned.
Nokia is an electronics company, founded in 1865 by Fredrik Idestam; the company started as a paper manufacturing company but in the 1970s, it changed its line of business to electronics (Nokia Official website ,2010). It has a strong brand; some of its products include phones and laptops.
In 2009, it was the second largest company in electronics industry from Apple Inc; the company’s positioning statement is “technology connecting people”. To remain competitive, the company uses an integrated pricing strategy. This paper discusses how the company determines prices of its products.
Product attributes
Nokia phones are in different shapes, technology level and have different features; each category of phone has the target market it aims. The following are the common products attributes of Nokia Phones:
They have a target market; the section of the market is in need of phones
Has high value products that can be up-sold and cross-sold
All the phones have a back-end product-relation
The products approach the market from a niche market appeal and through mass-market appeal (Hooley and Saunders, 1993).
Needs that the products aims at fulfilling
Phones have the main purpose of enhancing communication among people, through phone calls, messaging or/and the internet. Other functions that Nokia gargets have include calculators, timers, calendars, time zones and alarm system. The features are the differentiating characteristics of the different Nokia brands in the market.
Price range(s) does this item target
Nokia phones come in different features that target different markets; they are aimed at offering a product for every member in the society. In line with the company’s tag line, the company develops different features in their phones with the basic feature being calling and messaging. The prices for the products range from $10 to $200 depending with the country of operation, the approach of determining the prices include price skimming and psychological pricing.
Market segment of the company’s products
The company has demarcated the market in four main areas using income as the form of differentiation the following are the demarcations:
Low earning population
The company has come up with low cost products of high quality but with limited features to sell in the market segment; the phones have the basic function of calling and texting. To target the customers, who are the majority especially in developing countries, the company uses penetration pricing model; the model advocates for a pricing method where an organization sets its prices at a low rate than that offered by the competitor; the aim of the approach is attack a large mass of people to the products. Example of phones for this class is Nokia 1200 and Nokia 1210.
Middle class
They are people who need a higher tech phone than the lower earning class; to target the population, the company has develops phones with more features, for example it may include internet services to the gargets of cheap technologies like GPRS.
Well-to-do
Well-to-do people need a number of applications in their phones, when the company is developing products for this target market; it uses high technology and includes a number of features and technologies for example they use Edge technology for internet. To sell in this market, the company uses price-skimming strategy
Niche markets
The company’s research and development department has the role of recognizing a need that current phones in the markets are not meeting, then develop product that meet the market. Some of the phones in the market include touch screens ( Kotabe and Helsen, 2004).
Distribution
Depending with the target market, the products are distributed differently; the company has established Nokia collection centers in different countries where traders can get the product for distribution; alternatively, if a trade is willing to buy in bulk, the company offers the option; it has both online and desk selling.
Who carries the products?
In different countries, the company has established collection centers called authorized dealers who are given the responsibility of distributing the products in their countries. When the dealers have received the products, they are supposed to ensure they get to the target market in the best form.
The approach to selling increases the cost of the product to the final consumer since all people in the chain will have to benefit from the transaction.
Where can it be found?
Nokia phones can be found in the following places:
Authorized dealers and sub-dealers premises
Shopping malls
Supermarkets
Stalls
Electronic shops among other electronic garget selling points (Nokia Official website ,2010).
What type of promotions does this company use and how does that influence price?
The company uses “pull” promotion strategy, under this approach, massive advertisements and persuasion mechanisms are adopted to ensure that an organization’s products knowledge of existence has been created. The end user and the promoters are at close links and interact in the course of advertising. The cost incurred is passed to the final consumer increasing the price of the phones.
What are some suggestions on how this product or service could be improved and how might that influence pricing?
Nokia management team should think of improving operating technology adopted in phones, so as it can accommodate modern applications. Currently, the highest technology used for internet applications is EDGE technology; however, some of its competitors like Apple Inc have switched to 2G and 3G technology. When the technology adopted has been improved, then, the company is likely to enjoy a higher share of the market.
The second improvement that the company should make is to incorporate low earning and middle class market segments in its twin-Sims products; the approach is likely to increase the company’s sales.
References
Hooley, G. and Saunders, J.(1993). Competitive Strategy: The Key to Marketing Strategy. New York: Prentice Hall.
Kotabe, M. and Helsen, K. (2004). Global Marketing Management.New York: John Wiley & Sons.
When undertaking a capital investment, a company needs to be keen on the project to ensure that the project will be successful and to the benefit of the company. In the case of Nokia Corporation, adopting a laptop assembling machinery will assist the company make laptops with are fast selling in modern technology driven environment. The following are the main challenges that the company is likely to get:
Risk
There are chances that the machinery the company will adopt is not up to date with the current technology or alternatively it may not remain relevant for long periods of time before other systems better machines have been adopted. This may mean that the technology may become obsolete before the machine has yielded maximum result to the company. Another risk comes with the adoption is the chances that the demand of laptops will not be lasting; this will mean that the machine will remain idle in the company.
Currently, there are high chances that the company will b e sold some counterfeit machinery that will injure the company financially and even reputational wise, the machinery may thus end up injuring the company instead of improving its business and operation (McCracken, 2005)
Politics
Projects are affected by internal politics, organizational behavior and culture, when a proposal has been presented for approval, chances that some people will feel that it should not be implemented for various issues. Some may even want the finances be diverted for other projects or alternatively feel that there should be a certain way they should be followed for implementation, chances that some people will argue to benefit from the project are high leading to the delay or failure of the project (Lefley, 1997).
Costs
With current changes in global environments, and the capitalist economies that the world has adopted, there are chances that the project will be rated higher than it should be. This will work against chances that it will give its returns to the company as expected. When a project has been rated higher or have consumed higher than the expected rate, there are chances that the project may injure the company.
Some people inside the company may have the ill mind of overstating the project’s costs for their own benefit, this happens at the expense of the company that depends on the project for furtherance of business. To get financial gains from the company, the management will have the challenge of factoring the costs of initiation of the project to the final products that will be made as a result (Nthes, 2003)
Public relations
When the company has adopted new machinery, which somehow is not in line with the primal business of the company, some stakeholders may not go well with the situation, they are likely to think that the business has changed to their disadvantage. Again, the shareholders may be called upon to give in some inputs in terms of capital injection or they may suffer a reduced return as the company finances the project, when this happens, then there are chances that the company’s reputation will be changed negatively.
Change resistance
The machinery adoption may face a change resistance from employees whop might wonder whether it has come to replace them or change the way they operate, when faced with such resistance, then chance of its success will be minimal (Advanced Excel Business Center, 2008).
