Category: Nokia

The three important issues the company should focus on in terms of expense control

Employment at the company should be cut down to a manageable size. The company should only retain a sizeable number of workers that it can manage comfortably as the revenues continue to dwindle. The goal is to save a significant amount of revenues currently being paid out as salaries and wages.

Business acquisitions should only be limited to those that are viable and those that require less time to return profits. The financial goal of this move is to save funds from further non-profitable ventures.

Closing the extra regional offices and branches and instead maintaining the main ones only is the third strategy. This action will save a significant amount of revenue that is currently being spent on meeting rent and other related expenses.

Assessment of Nokia-Microsoft’s Windows Mobile

The Window’s smartphone by Nokia has failed to recapture the market leadership in the sector. Instead, Nokia has continued to lose its market share while recording huge losses, especially in the smartphone sector. The Windows mobile platform has failed to achieve its intended purpose of spurring growth for the brand maker.

From the current market trend, it is possible to adjudge that the Windows mobile platform is inferior to its main competitors Android by Google and iOS by Apple.

The best alternative for Nokia should be using the licensed Android OS on its smartphone devices in order to boost its market share. This will see Nokia devices enjoy the same superiority as other leading Android devices such as Samsung, thus attracting a huge global market to recapture its market share.

Necessary steps to regain the North American Market

Nokia should begin by carrying out an extensive study of the North American market in order to determine trends and preferences. Market needs for the smartphones, especially in North America, keep changing rapidly as users seek for new features and capabilities.

A closer link to the market will enable the brand maker recapture the market. Additionally, Nokia should seriously consider introducing the Android OS in its devices because this platform is sought after by the North American market.

Realistic strategies for regaining market share

Price competition

Nokia should shift its competition towards the aspect of price by targeting to avail high quality products at cheaper prices. Lowering prices will see more users acquiring its products, thus increasing the market share.

The costs will involve buying more materials and utilizing them on more products in order to achieve economies of scale advantage. However, this strategy is risky because the gadgets might be of an inferior quality to compromise on cost.

New products

This strategy should focus on releasing new products with enhanced features and performance. This will provide the market with a high range of products capable of competing with the other brands. The costs involve intensive research and development, while the risk lies in spending too much on a technology that fails to pick up.

I prefer the price competition strategy because with its capacity, Nokia is able to achieve success through building economies of scale advantage. Nokia is also shifting production to Asia where it is likely to benefit from cheaper labor.

Evaluation of Stephen Elop Performance

Stephen Elop has performed dismally in his leadership. The company has continuously lost market share and registered losses. I recommend that he should change his strategy by focusing more on changing market trends and incorporating them immediately, instead of taking time before acting. Nokia has been rigid in its operations, failing to read signs early and take the right steps to address challenges.

Thus, the CEO must consider flexibility while competing for business. Additionally, Elop should consider expanding Nokia’s business by venturing into new business areas, such as personal computers and laptops. This will see the firm cushion itself from harsh business conditions and performance affecting one area.

Introduction

Operation management refers to a field of management that oversees, designs and redesigns organizational operations in productions of goods and/services (Bicheno & Elliot 1997). The field has the responsibilities of ensuring that organization operations are efficient in reference to the resources needed to meet customers’ requirements (Matthew & Tan 2009).

It is concerned with management of the processes that transform or converts the inputs to outputs such as the conversion of raw materials, labor, and energy to goods and services (Bicheno & Elliot 2009). The field ensures that an organization maximizes its profits while undergoing the minimum cost of production possible (Bicheno & Elliot 2009).

In operation management, both long and short-term business strategies begin with high-level departments. They “are based on careful and sound projection of demand for the product or service (Shim & Siegel 1999 p2).” Operating strategies and plans start with derivation of short-term and long-term procedures in production that transform later into purchasing plans (Shim & Siegel 1999).

All this plans and strategies should focus on maximizing the profits and minimizing the cost of production. During formulation of the plans and strategies, the decision-makers should concentrate on the issues that focus on competitive advantage, as this will give the organization the advantage to maximizing its profits (Sheik 2003).

An organization thus focuses on its strengths, weaknesses, opportunities, the threats associated with its production, markets, and the finances generated (Sheik 2003). An organization must therefore focus and evaluate its decision-making tools and methodologies in order to generate plans and strategies that will enhance its achievement of the goals (Garg & Venkitakrishnan 2003).

In operation management, the decisions made on the order winners and qualifiers affect an organization. This paper focuses on the order winners and qualifiers of Nokia Company, evaluation of means of delivery, improvement and the potential implications of the improved orders and qualifiers.

Orders Winners and Qualifiers

Nokia Company deals with the production of mobile phones and their parts. In the recent years, the industry of mobile phone and their parts production has relatively grown thus increasing the competition in the market. The company has therefore focused on evaluating its order winners and qualifiers.

The company gears towards achieving a competitive advantage over its competitors while minimizing its cost, maximizing its flexibility and maximizing the profits (Slack 1999). Order winners refer to those characteristics that give Nokia products a competitive advantage over its competitors’ products.

Order winners refer to the characteristics that persuade a customer to buy Nokia phones or parts over those of other mobile phone production companies. The order winners focus on the price or cost, quality, flexibility, product design, image, delivery reliability and speed, and after-service market (Barney 1991).

On the other hand, order qualifiers refer to the aspects of competitiveness that Nokia operations management has over a particular level that customers consider (Barney 1986). Qualifiers thus give Nokia Company a name depending with the level of their performance over what the costumers consider. Similarly, Nokia Company order winning factors implicitly define its operations contributions (Barney 1991).

Increase in the performance of the order winning factors increases the chances for more business while the converse results to reduced amount of business (Khanna 2007). The paper will focus on five order winners and qualifiers used by Nokia Company.

Customer service: Nokia Company customer service provides a real time services to its customers. They handle all the customers’ queries and needs with immediate response. The company customer service gives the customers the first priority. They emphasize on treating their customers fairly as the customers are their main concern (Ake & Hakan 1997).

They fully understand that customers are of great importance to their company and without them, they cannot operate. The company emphasizes on honesty and treats the customers’ information with confidentiality (Ake & Hakan1997).

They further have a well-established database system that helps them to store their customers’ data that help them to revisit the customers’ information to clarify whether the answer they responded to the customers was right.

The company customer service further believes on the minimizing the cost of their operation by ensuring that complains and queries from their customers are minimal by offering high quality services and easily understood instructions (Ake & Hakan 1997).

Quality: For Nokia Company to ensure it has a competitive advantage; it concentrates on the production of high quality products (Hill 2000). Nokia Company products are competitive in the market due to their high quality. They give a wide range of products that are of high quality that persuade many customers to purchase them.

Further, most of their products have the qualities that the customers seek when purchasing their mobile phones. The Nokia Company also concentrates on the quality of these features to ensure that they have a competitive advantage over the competitors’ features.

For instance, regarding their mobile phones with a camera and an internet connection, the Nokia Company concentrates on improving the quality of the camera and the speed of internet connections. In addition, in terms of durability, Nokia products last longer than their competitors’ products.

They produce mobile phones and parts that give their customers’ service for a long time. Further, their products are mainly default free and give a 100% tolerance to faults.

Delivery speed: This refers to the time taken for the Nokia Company to respond and deliver the orders once placed (Hill 2000). Since Nokia Company uses the made-to-stock products operations strategy that allows them to produce their products in bulk through maintenance of an inventory record of the finished products, they are able to give response to orders in the right time (Khanna 2007).

However, even though the company has the products ready, they give respect to the customers’ orders and they cannot deliver them so earlier than the customer expects (Khanna 2007). Ability of the company to make deliveries at the right time gives the company a competitive advantage over their competitors.

Furthermore, due to their effective customer care service, the company is able to receive the order placements in the shortest time possible. The company through their technologically improved operations allows the customers to place orders online that ensures that orders are received as soon as possible.

They further encourage communication on the issues related to orders to ensure that they are meeting the customers’ needs. The company also ensures that their delivery is reliable. The company does this by ensuring that it has the maximum number of days that the delivery should take.

Further, they ensure that the means of delivery that they use are reliable and cannot cause delay in the delivery of the products to the customers (Hill 2005). This gives the customers the confidence with the company that result in more business opportunities.

Flexibility: Flexibility refers to the ability of the company to change easily from the production of one item to a substitution product, easily customize an output to meet a certain customer specification or requirements and the ability of the company to change its production to meet the customer demands (Hill 2005). In substitution production, Nokia Company ensures that they produce a variety of products that can substitute each other.

They ensure that every product they introduce to the market has its substitution. This helps the company to have a competitive advantage as their customers always have a substitution from the company rather than purchasing substitute products from other companies.

In terms of customizing the output to meet the customers’ requirement, Nokia Company similarly ensures it has a vast range of products that the customers can choose. They ensure that they have more than five products that have almost the same features but different shapes, image, color and model.

This gives the customers the right to choose their favorite depending on their taste. In reference to meeting the market demand, Nokia Company has been and is able to respond to the market changes. The company is able to produce in bulk during high demand and in less bulk during low demands.

Price and cost: Nokia Company concentrates on reduction of cost of production. The company ensures that there is elimination of waste materials, labor, and facilities (Barney 1986). The reduction of production cost helps the company to offer better prices for their products.

However, Nokia products are more expensive than most of its competitor’s products but the customers consider them genuine when they consider the quality of the products. In addition, the company produces in bulk that gives the company the advantage of economy of scales (Garg & Venkitakrishnan 2003). This further helps the company in offering better prices to its customers.

Improvement of the Order Winners and Qualifiers

As mentioned earlier, the order winners and qualifiers highly predict the business of an organization. Similarly, in Nokia Company the order winners and qualifiers predict the market and the business. The company has therefore embarked on the improvement of its order winners and qualifiers in order to have a better competitive advantage and withstand the rising competition from other upcoming competitors.

In customer service, the company has started on projects to improve their customer management. The company in their research has realized that their customer service turn-around time is not as minimal as the company may opt to achieve (Barney 1991).

To solve this problem, the company is working on improvement of the customers’ service by updating their database capacity, increasing the number of customer service agents and use of reliable means of communication. On the quality of the products, the company has focused on improvement of the features of the products and durability.

The company looks forward to production that will meet all the customers’ needs through update of the features. The company focuses on the production of mobile phones that will give its customers the ability to perform all the tasks that a computer can perform. In addition, the company seeks to ensure that durability of these products is high to win confidence of the customers.

The company further concentrates on simplifying its products usability to ensure that they match all market needs (Hill 2000). This is through making their products instructions precise and easy to understand that will assist all their products users. In delivery time, the company objective is to make the customers more satisfied with the company deliveries.

The company has stressed on its operation strategy and is keen in the production in bulky prior to the placement of the orders to ensure they respond to the orders immediately. The company has recommended improvement of the inventory technology that will help it in bulky production. In addition, the company seeks to ensure in future that there is no even a single delay in the delivery of the products to customers.

The effort of the company is to ensure that customers are satisfied with the delivery of the products to the market (Slack 1999). This also involves the reliability of the channels used in the delivery of the products to customers.

In flexibility, though the company has been able to adapt to the changes in the market, the company objective is to produce more substitute products and introduce them to the market. This will give the customers a variety to choose from that will ensure the company ability to sustain its customers.

This will further ensure that Nokia Company is able to compete with other mobile phone production companies that produce products that would substitute their products. In addition, the company is looking forward to the improvement of the methods used to collect customer requirements rather than only depending on their customer service.

This aims at achieving a more elaborate customer requirement through market researches that will help them to focus on the customer needs (Barney 1986). This will strengthen the company and customer relationship as the customers will have a feeling of a company that cares for their needs. After the collection of this data, the company will concentrate on transforming the customers’ requirements into products.

In pricing, the company’s objective is to offer prices that match the customer ability. To respond to their normally more expensive prices, the company has concentrated on reduction of production cost and production in bulk.

The reduction on production cost will consequently lower the products price in the market (Barney 1991). In addition, the company has focused on introduction of more products with different pricing in the market. The price differences will help customers to purchase the products that best suit their ability.

Potential Implications of Improved Order Winner/Qualifiers

Order winners and qualifiers affect the performance of the business. An improvement in the order winners and qualifiers will have an improvement in the business performance. The improvement of Nokia order winners and qualifiers similarly will have an impact on the organization supply chains. Supply chain refers to the channels and processes used in transferring products from the producer to the customers (Rangaraj 2009).

This may include the people, activities, organization, resources, and activities involved in transferring the products from the producer to customers (Rangaraj 2009). An improvement in the order winners and qualifiers results to an increase in the number of customers, which consequently affects the chain supply.

The increase in customers means that the supply chains must be able to meet the customer demand (Seuring 2003). This causes an increase in the supply chains, the level of their profit margins increases and their management becomes more complicated as they work towards meeting the customer demands.

They therefore work on sustaining the delivery of products in the market through improvement in the management and operations. The improvement in order winner and qualifiers further affects the supply chains in the sense that the supply chain has to improve to meet the needs of the market.

The improvements in supply chain must address the strategic supply chain, supply chain planning, logistics, management of product lifecycle, applications of enterprise chain supply, procurement and asset management meant to match the changes in order winners and qualifiers (Seuring 2003).

The failure to have a well-planned improvement in the supply chains management will consequently affect the delivery of products to the customers.

Conversely, lack of improvement in order winners and qualifiers has impacts on supply chains. Lack of improvement in order winners and qualifiers means less business for the Nokia company products. It consequently affects the supply chains, as the market opportunities are few.

This causes collapse of some of the chains, failure in management due to lack of resources, shift of the market to the competitors and poor profits margins due to lack of market for the Nokia company products (Rangaraj 2009).

Conclusion

In any organization, operation management is very crucial. The decisions made by the managers and the people in this field or department might affect the operations of a whole organization positively or negatively.

The department is concerned with the production, the conversion of the labor, materials, and energy into finished products. In addition, the department is concerned with the minimization of production cost and the maximization of profits and flexibility. The department focuses on decisions for improving the order winners and qualifiers that really affect the performance of the business.

The failure of the decision, plans, and strategies made by this department means the failure of an organization. It is therefore important for every organization to hire competent personnel to run the department. Evaluation and validation of decision-making tools related to this department is of great important before the application.

References

Ake, H & Hakan, Y 1997, The firm’s and its customers’ views on order-winning criteria, International Journal of Operations and Production Management vol. 17, no. 10, pp. 1006–1019.

Barney, J 1986, Organizational culture: Can it be a source of sustained competitive advantage? Academy of Management Review 11: pp. 656–65.

Barney, J 1991, Firm Resources and Sustained Competitive Advantage. Journal of Management 17: 99–120.

Bicheno, J. & Elliot, B 1997, Operations management: An active learning approach. Blackwell Publishers Inc, Malden, USA.

Garg, V & Venkitakrishnan, N 2003, Enterprise resource planning: Concepts and practice, Prentice-Hall of India Private limited, New Delhi.

Hill, T 2000, Manufacturing strategy: Text and cases. 3rd ed, Irwin McGraw-Hill, Boston.

Hill, T 2005, Operations management strategic context and managerial analysis, Second Edition, Palgrav, USA.

Khanna, R 2007, Production and operation management, PHI Learning Private Limited, New Delhi.

Matthew, R & Tan, K 2009, Operations strategy in action: A guide to the theory and practice of implementation, Edward Elgar, Cheltenham.

Rangaraj, N 2009, Supply chain management for competitive advantage, McGraw-Hill Companies Inc, New York.

Seuring, S 2003, Strategy and organization in supply chains, Physica-Verlag Heidelberg, New York.

Sheik, K, 2003, Manufacturing resource planning (MRP II): With introduction to ERP, SCM, and CRM, McGraw-Hill companies Inc, New York.

Shim, J & Siegel, J 1999, Operations management, Barron’s Educational Series, Inc, New York.

Slack, N 1999, The Blackwell encyclopedic dictionary of operations management, Blackwell publishing Inc, Malden.

The Board of Directors in Nokia Corporation

The Board of Directors of Nokia Corporation manages all the main operations in the company and provides the company’s 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 company’s 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 company’s 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 Corporation’s 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.

Societal Environment

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 UAE’s 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 Nokia—just like most business enterprises across the world—tend 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 Competitor’s 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 Nokia’s 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 enmity—which 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.

Introduction

External Factor Analysis Summary for Nokia

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.

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.

Research Background

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 company’s 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:

1. The proposed study in multi-disciplinary in nature. It cuts across different disciplines, such as politics, technology, and economics.
2. 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.
3. 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.
4. 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.

1. 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).
2. 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 Nokia’s 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 phone’s hardware and software are more beautiful and presentable compared to those of other smartphones, such as Android and iphone. In addition, most of the phone’s 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 phone’s 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 project’s terms of reference. In addition, the issues form the rationale or justification for the proposed study. The project is limited to Nokia and the company’s 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 company’s ‘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 Nokia’s 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, Apple’s 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 company’s future comeback (Mlot 2012).

Economic Factors

The economy determines the consumer’s 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 Nokia’s 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 company’s 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, Nokia’s 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, Apple’s 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

Coleman, S 2011, Multi-sited ethnography: problems and possibilities in the translocation of research methods, Routledge, New York.

Kolakowski, N 2012, ‘CES 2012 heralds year of ultra-books, Windows 8, Windows phone’, Eweek, vol. 29 no. 1, p. 6.

Kumar, R 2011, Research methodology: a step-by-step guide for beginners, SAGE, Los Angeles.

Mehl, MR 2011, Handbook of research methods for studying daily life, Guilford, New York.

Savitz, E 2011, ‘Nokia says Windows 8 Tablet coming June 2012’, Forbes.Com, vol. 4 no. 2, p. 37.

Segan, S 2012, ‘Nokia’s deadline is now December 2012’, PC Magazine, vol. 4 no. 2, p. 1.

Sen, S 2012, ‘Sucker punch’, Business Today, vol. 21 no. 11, pp. 48-52.

Stern, E 2005, Evaluation research [sic] methods, SAGE, London.

Woyke, E 2011, ‘Last call’, Forbes, vol. 188 no. 10, pp. 52-56.

Yoko, BM & Doz, Y 2012, ‘Corporate languages and strategic agility: trapped in your jargon or lost in translation?’, California Management Review, vol. 54 no. 3, pp. 77-97.

Albanesius, C 2012, ‘4 percent windows phone market share in 2012: sad or progress?’, PC Magazine, p. 1.

Alexis, N 2012, ‘An enquiry into selected marketing mix elements and their impact on brand equity’, IUP Journal of Brand Management, vol. 9 no. 2, pp. 29-43.

Ammisetti, A 2012, ‘Nokia: the troubled king of the Indian handset market’, Vidwat: The Indian Journal of Management, vol. 5 no. 1, pp. 14-20.

Avenell, P 2012, ‘Surprises, submarines and something new dominate 2012 Aussie Design Awards’, Appliance Retailer, vol. 18 no. 7, p. 3.

Holbein, JR 2012, ‘Certain electronic devices, including mobile phones and tablet computers, and components thereof; notice of receipt of complaint; solicitation of comments relating to the public interest’, Federal Register, vol. 77 no. 89, pp. 27078-27079.

Leach, PT 2012, ‘Samsung overtakes Nokia in cell phone shipments’, Joc Online, vol. 1 no. 1, pp. 1-2.

Lev-Ram, M 2012, ‘Can this smartphone save Nokia?’, Fortune, vol. 166 no. 5, pp. 53-54.

Mlot, S 2012, ‘Report: Nokia shopping exclusive Windows Phone 8 deal in Europe’, PC Magazine, vol. 2 no. 3, p. 1.

Savitz, E 2012, ‘Nokia: short the stock after recent big run, analyst advises’, Forbes.Com, vol. 5 no. 1, p. 39.

Sorensen, C 2012, ‘A fuzzy reception’, Maclean’s, vol. 125 no. 17, pp. 38-39.

Introduction

Interactive technology can be regarded as a unique strategy for attracting customers. These technologies involve the techniques of customer care and communication, thus the customers have the great opportunity to share their complaints and propositions with the company, and it is known, that the ability to share the thoughts and considerations on the issue of how to improve the quality level of the services is the best promotion for any company, as the customers feel welcomed. The attraction of the customers influences the position of the company on the market ratings. As for the Nokia Company, first of all, it offers the official website for every country in the world, where the Nokia cell phones are being sold.

The issues of the electronic data interchange

The issues of the electronic data interchange are the means, by which the authorized sell and service points exchange the gained information about the problems and damages of the Nokia phones. The exchange takes place by the means of the internet, and massaging system among the country department managers all over the world. The total informational exchange outlines the increased level of customers’ care, which is essential in the issues of Total Quality Management, which is used by the world market leaders as the key matter of the successful activity.

The Efficient Consumer Response is a joint trade and commercial body working towards making the sector an entire extra approachable to consumer demands, and this approach is regarded as one of the most significant parts of the global economic activity that needs to be widely developed in any company, pretending to be the world leader. It is argued, that the consumer response system works only if the company has already gained some success on the market, and in some measure, it is known for the consumers, at least in the home-based country.

Guiding principles

The five guiding principles of the ECR strategy, implemented by Nokia Company:

• Work steadily to offer better value to the purchaser, with less cost all through the total supply chain.
• Include commercial leaders who are resolved to replace the win/lose trade relations with equally advantageous dealing coalitions.
• Use precise and timely data in a computer-based system to sustain effective marketing, manufacture, and logistic conclusions.
• Make certain that the right product is obtainable to the customer at the necessary time, by realizing value-added processes as the product streams from the end of production/packing to the consumer’s bin.
• Use a normal dimension and reward scheme that estimates the impact of production pronouncements on the whole system.

Conclusion

The market researchers affirm, that Nokia Financial Services decided in favor of implementing the data warehouses technologies to manage the growing information flow,” commented Roland Markowski, SAND Technology’s managing director for central Europe. “This decision affirms the solution’s ability to manage, provide rapid admittance to and store any level of infrequently-used data extremely effectively as a fully integrated extension to SAP NetWeaver BI 2004s. SAND/DNA enables companies to decrease the total costs for users and supports their attempts to manage their rapidly growing data warehouses more professionally.

References

Applbaum, Kalman. The Marketing Era: From Professional Practice to Global Provisioning. New York: Routledge, 2004.

Birkinshaw, Julian. “Upgrading of Industry Clusters and Foreign Investment.” International Studies of Management & Organization 30.2 (2000): 93.

Keegan, Warren, and Green, Mark C. Global Marketing, 4ed, Pearson Prentice Hall, USA. 2005.

Paley, Norton. The Manager’s Guide to Competitive Marketing Strategies. 3rd ed. London: Thorogood, 2006.

Ricart, Enric Joan, et al. “New Frontiers in International Strategy.” Journal of International Business Studies 35.3 (2004): 175.

Stone, Marilyn A., and J. B. Mccall. International Strategic Marketing: A[N] European Perspective. New York: Routledge, 2004.

Introduction

In the modern business world, mergers are the moats popular method of a strategic partnership which helps to remain competitive and innovate. Two companies selected for a merger are Nokia and Canon. It is supposed that mergers between these giant manufacturers will benefit both of them and allows them to compete on a global scale and sustain a strong brand image. No other industry segment is more volatile and turbulent than the industry (Angwin, 2007). Emphasis must be placed on selecting appropriate business sectors and ensuring that they are viable market segments for the firm to pursue. Historical trends, current expertise, and interest are all key elements in selecting an appropriate business sector. It is not enough to simply enter a new market because it is popular or has been in the news lately. Market studies must be made, the business sector defined, and the firm’s role within that sector established before any attempts are made to enter it.

Because the field is characterized by rapid change and innovation, the firm that does not keep pace with this change is destined to fail. With short product lifecycles, difficulties in protecting products from pirating, and long development periods, the market is a difficult market to penetrate and become a leader in. Both Nokia and Canon are market leaders in their industries thus influenced by fierce competition and economic changes in global markets. Nokia is a multinational communication corporation established in 1965 in Finland. In 2007, its revenue was €51.058 million and operating income was €7.985 million (Nokia Home Page 2008). Similar to Nokia, Canon is a Japanese multinational corporation founded in 1937. Its revenue was 4,156,759 million yens in 2006. Canon employs 127,338 people while Nokia employs 112,262 people worldwide (Canon home Page 2008). These companies were selected for a merger because both of them have similar size and revenue, and can be equal partners in business. Both of them rely on innovative technologies and solutions, change processes, and effective performance.

Description Part

A merger can be considered to be a mutual agreement of sorts between two firms to join together to become one company. For instance, one merging firm does not take on huge amounts of debt either to fend off or to purchase the other. Mergers are seldom hostile in nature. Therefore, negative factors inherent in hostile takeovers are absent (Angwin, 2007). The possibility of massive sell-offs is usually not an issue. In addition, the organization’s employees are more inclined to accept and support the merger than oppose it. There are other factors common to the merger, acquisition, and alliance activities that must be considered, such as power struggles between the firms, a clash of corporate cultures, organizational and reorganizational issues, the effects of a new corporate direction, and entry into new or unfamiliar markets (Gaughan, 2007). A merger, therefore, like any other business activity, is not without its risks. Moreover, these risks can be managed and minimized. When studying merger activity, several common strategies tend to surface that characterize successful mergers (Agrawal and Jaffe 2000).

Vocabulary

Merger: “the union of two or more organizations under single ownership, through the direct acquisition by one organization of the net assets or liabilities of the other. A merger can be the result of a friendly takeover, which results in the combining of companies on an equal footing. After a merger, the legal existence of the acquired organization is terminated” (Mueller 1987, p. 54).

Integration – means a style of control and ownership used by companies (Mueller 1987, p. 21).

Acquiring – “To gain, usually by one’s own exertions; to get as one’s own; as, to acquire a title, riches, knowledge, skill, good or bad habits. “No virtue is acquired in an instant, but step by step” (Mueller 1987, p. 14).

Business Partners – “are independent companies which make a deal based on mutual agreement and support” (Mueller 1987, p. 18).

In other situations, the word merger was used to mean the union of two companies of substantially equal size while the word acquisition described the combination of a large company with a much smaller one. This confusion of terms arises in part from tax and legal technicalities governing the form of joining two enterprises (Angwin, 2007). When Corporation A acquires the stock or assets of another company, legal, tax, and financial factors determine whether the form of bringing together the two enterprises is a merger, a consolidation, a purchase of assets, a purchase of stock, or an exchange of stock. Although the form selected to unite two entities is extremely important to both parties of the transaction, companies are not primarily concerned here with tax, legal, and accounting considerations that are involved in a decision as to the form of a combination (Mueller 1987).

Companies are concerned with the management problems involved in the process by which companies acquire stock or assets of other enterprises. In this report, the word acquisition is used to describe this process — bringing additional economic activities or assets under a company’s control, whatever legal form is used to achieve the result. It was noted that when management representatives of an acquiring company talked with executives of a potential acquisition, the conversation was always in terms of “merger” although it was implicit and apparent that Company A proposed to “acquire” Company B. In these situations the negotiating executive of the acquiring company would discuss “merger” with the management of the company to be acquired, when he discussed the opportunity with his board of directors, he referred invariably to the possibility of “acquisition.” There seemed to be an inoffensive quality in the word “merge” not found in the word “acquire” (Mueller 1987).

Description of Merger

Type: This will be a Product-Extension Merger. “This merger is between two companies that sell different, but somewhat related products, in a common market. This allows the new, larger company to pool their products and sell them with greater success to the already common market that the two separate companies shared” (Mergers n.d.).

Background –In the case of both companies, the top management believes that there are business reasons for selling to others. It is important for acquiring managements to determine the real reasons why Nokia can be acquired a common element of intercompany negotiations is the practice of sellers dressing up or otherwise disguise the true nature of their motivations for considering divestment (Gaughan, 2007). Some owners, for instance, recognizing that rapid technological changes are about to make their product lines obsolete, will offer such reasons. These and many other reasons may be preferred as explanations for giving up control of a company that is on the threshold of new and higher earnings rates (Angwin, 2007).

Consequences – The long-term viability of the firm must be kept in mind when strategies are determined. The viability of the acquisition from a long-term perspective must be assessed. A logical progression in tools of management also reflects concern for the global implications of today’s actions. Firms must be in a position in which they can anticipate change and react to market developments (Agrawal and Jaffe 2000).

Implications – A successful strategy is one such way that allows a firm to become a responsive, limber player capable of anticipating and responding to the changing global markets by capitalizing on corporate strengths and synergies brought by the acquired firm. This is one manner in which to choose the most appropriate road to competitive advantage. A global, long-term perspective on the place a corporation occupies in the world is the first necessary step to develop a successful acquisition strategy (Angwin, 2007).

The Specifics of the Merger

When a major reorganization occurs within a company, the benefits of the reorganization are not always immediately apparent. Employees have shuffled around, out of one department and into another, taking on new or additional tasks. Management roles might change (Agrawal and Jaffe 2000). However, out of this apparent chaos might emerge a stronger, more viable corporate structure. But one factor that undermines this type of activity is that people are basically resistant to change. People become comfortable with the status quo and organize their lives around perceived constants. When these constants that stabilize one’s life are disrupted, one tends to resist them, even if the future benefits will outweigh the current inconvenience (Canon home Page 2008).

Financial commitment is necessary as well. Profits may suffer in the short term, while funds are channeled toward relocation, expansion efforts, or facility improvements (Angwin, 2007). Margins may suffer due to temporary increases in production costs brought about by the merger. In fact, it may become necessary to delay product release cycles and recalculate business forecasts to reflect the changes brought about by the merger. A long-term view must be taken by corporate executives and financial management, and a realistic estimate of profits and losses for the short term must be made to promote a smooth transition. Likewise, these estimates and forecasts must be made clear to upper management and transferred into corporate goals for the coming years (Agrawal and Jaffe 2000; Angwin, 2007). If these goals are unrealistic or overly optimistic, there is always the danger of low morale when they are not met. However, this is not to say that financial targets should not be made or that milestones should not be established. The utmost effort must be made to meet planned financial targets. Only a long-term commitment to the merger strategy and a realistic establishment of milestones by upper management can ensure success (Nokia Home Page 2008; Canon home Page 2008).

Equitable distribution of resources is a critical ingredient to a successful merger. The commitment of resources that is to be made by the respective organizations must be made clear from the onset (Gaughan, 2007). The proper mix of resources, whether it is strictly financial or involves a commitment of manpower as well, must be defined from the very beginning. In fact, resource commitment is an integral part of any successful corporate strategy (Angwin, 2007). It is especially important to develop a postmerger resource allocation strategy beforehand to ensure a workable and realistic merger strategy. Thus an overall strategy for resource allocation must be developed in parallel–at the same time that corporate strategies, financial goals, and market strategies are being developed by the respective organizations–for this commitment to ever make sense or to have any merit (Agrawal and Jaffe 2000).

To arrive at a strategy of proper resource allocation, and assessment must first be made as to what resources each organization brings to the merger and to the new corporate direction (Gaughan, 2007). Factors such as the size of the organizations, facilities available, what resources are at their disposal, what long-term commitments are presently in place, assets, liabilities, and cash flow all come into play when assessing resource availability. Once these resources are located, the next step is determining which ones are usable. Not all resources may be needed after the merger. They may not necessarily coincide with the new corporate strategy or there may be duplicates. So some may need to be sold off in an effort to consolidate (Angwin, 2007).

Most mergers fail as a result of internal conflicts. These conflicts, moreover, arise as a result of power struggles from within the organization. With any human endeavor, personalities play a key role in either its success or failure. If a merger has the backing and full support of its employees and management, the chances of success are greatly improved. Although there are fewer obstacles than in the case of a hostile takeover, gaining support and trust is always a difficult endeavor (Gaughan, 2007). Thus, a key ingredient to success is to make certain that authority is evenly distributed within the newly organized company. If this is not the case, then power struggles will result between the management of the two companies, and a true merging will never take place. There consequently will always be an “us-versus-them” attitude prevalent within the organizations. Plans must be in place to utilize the managerial talent available within each organization. It is especially important that the upper management of each organization achieves a very good working relationship with the other from the onset. Since these are the people that are the most visible within each organization and will most probably be looked to for guidance and to gauge the merger’s status, their role within the new firm is crucial (Nokia Home Page 2008; Canon home Page 2008).

Each firm brings unique strengths and assets to the merged organization, and it is the potential synergy that makes a merger strategy so attractive. The key strengths are obvious and are generally the main reason for the merger in the first place. For instance, in the Philip Morris case, Philip Morris was attracted to Kraft by its distribution synergies and proven management strengths. In high-tech mergers, the firms involved are generally attracted to each other because of the technical expertise that each offers the other (Angwin, 2007). There are many other reasons as well, including the influx of financial muscle to the organization, increased distribution channels, the ability to enter new markets, and the establishment of complementary product lines. However diverse the merging companies maybe, an underlying characteristic common with successful mergers is that management focuses on their individual corporate strengths (Gaughan, 2007; Galpin and Herndon, 2007).

One would think that in the absence of a hostile takeover, it would be relatively easy for communication between different divisions to take place. This, however, is not the case. Some employees, for whatever reason, will always view this type of change as a threat, and information will not be volunteered. Their strategy is one of turf protection and not one that furthers the overall corporate objectives (Galpin and Herndon, 2007). If left unchecked, their sentiments might spread like a virus to others within the organization and could completely shut down communication within the organization. Effective communication is thus a necessary ingredient for any organization’s success. Likewise, without the proper flow of information to the key decision-makers, any merger can be doomed to failure. In the first few months after a merger occurs, information and the flow of information are critical. Without them, corporate executives cannot effectively make decisions as to the nature of resource allocations, what to consolidate, and where management talent is needed, or keep abreast of problem areas. If communication channels continue to remain shut, executives will not be able to take steps to rectify these problems because they will not know that they exist (Angwin, 2007; Galpin and Herndon, 2007).

Commitment to a firm’s strategy is an indicator of trust in the firm’s management. Forecasting is an inexact science if it can be considered a science at all (Galpin and Herndon, 2007). Therefore, parallel to the development of a long-term merger strategy is the determination of the level of corporate commitment. Nokia demonstrates a commitment to the long-term success of the merger when initial operational losses in the third and fourth quarters of the fiscal year 2007, due to shipment expectations that could not be met, did not deter Nokia from its long-term growth strategy. Instead of cutting back on expenses, Nokia continues to invest in research and development as well as in sales and marketing budgets to support its anticipated new products. Confident in its strategy, Canon invests in long-term growth rather than pushing for short-term profits (Baldwin 1995). They anticipated the decline in net income for 2006 and were able to view it in the context of their overall strategy. Nokia has shown that it is committed to its long-term growth strategy, in which Canon plays an integral part. True to its word, it is well-positioned to continue to be a major force in the information management marketplace. As it looks to the future, Nokia plans to be a leader in application and development software for information management. By merging with Canon it was able to gain the products and expertise necessary to compete in the workstation product marketplace (Nokia Home Page 2008; Canon home Page 2008).

Consequences of merger for Nokia and Canon

Both firms will stand to benefit from their mutual working relationship. Initial discussions between executives at Nokia and Canon prove to be positive (Baldwin 1995). Each expressed his or her interest and desire to share technology in the development of an integrated product. Innovative had already begun work on a new graphic spreadsheet computer, and Canon would provide the database engine for this product. The crucial issue is that both companies see this to be a long-term relationship (Agrawal and Jaffe 2000). The commonality of their respective goals shows that the resources and technology that each player brings to this merger are crucial to the future success of the two firms. With a common mission, each agrees that a merger between the companies would be the best strategic plan for the two firms, ensuring their continued success and growth (Nokia Home Page 2008).

Under the terms of the agreement, shareholders would receive three-quarters of a share of Nokia’s common stock. In addition, Nokia would adopt certain arrangements comparable to those that are currently in place at Canon, and Nokia assumes Canon’s repayment obligations. The newly combined company would be called CoNNokia, Inc. It would be reorganized into two business groups, reflecting their new focus on two product lines and market areas: the Advanced Products Division and the Workstation Products Division (Baldwin 1995). The Advanced Products Division would be responsible for developing and supporting communication technology. It would continue to support its leadership position in the global marketplace, expand in the online transaction processing marketplace with its Canon-based product, as well as database networking. The Imaging Products Division would focus on developing and marketing office unique imaging and optical products (Andrade and Stafford 1997).

One critical issue that many firms fail to take into consideration is the fact that not only are two firms merging, but two sometimes distinct corporate cultures must merge. Oftentimes, the physical tasks of the merger are easier to implement than the psychological ones. Although the two firms did not physically merge together–product lines were to be kept separate and headquartered at their respective offices, and offices were to remain as they had before the merger–it was still necessary for them to organize into a single corporation (Andrade and Stafford 1997). The two firms needed to adopt a commonality of purpose. After all, the two locations, although separated by distance, were one company under the Nokia name. This was achieved through sharing a common purpose and view of the marketplace even prior to the merger.

One factor affecting the success of the merger was that the new organizational structure was loosely structured around the environments from which it emerged. The Advanced Products Division closely matched Nokia’s pre-merger corporate structure (Baldwin 1995). The Workstation Products Division was essentially conceived around the organizational structure already in place at Canon. Even the locations remained the same. Nokia was able to maintain the division that defined the separate companies, while at the same time capitalizing on the synergies the merger provided. Furthermore, management was already capable of operating in a distributed environment because Nokia will be was accustomed to operating within such a flexible environment (Baldwin 1995). The internal management structure of a corporate portfolio must reflect the new realities of the intensely competitive marketplace. Nowhere is the marketplace more competitive than in the software industry. The firm that establishes links among the business units within the portfolio and maintains flexibility among its management will create a sustainable competitive advantage for itself (Nokia Home Page 2008; Canon home Page 2008).

As has been emphasized, communication is one of the key factors to any strategy’s success. Without proper lines of communication in place, necessary information at critical points in a merger’s infancy will not be conveyed to the appropriate personnel who are capable of taking action and rectifying the problem (Galpin and Herndon, 2007). Unless corporate executives know what is going on, they have no defense, nor are they capable of recognizing and preventing problems before they manifest themselves. Nokia’s decision to keep Canon served to heighten the need for streamlined communications (Baldwin 1995). There are many advantages to leaving merged firms in their original physical locations, such as retaining key individuals, eliminating relocation costs, and keeping disruptions caused by merging to a minimum. However, the barriers that distance creates can possibly become disastrous (Galpin and Herndon, 2007).

Canon and Nokia recognized this problem and implemented strategies and policies that prevented a loss of communication between corporate executives. By alternately requiring Canon executives to travel to another office and Nokia’s management to travel to the Menlo Park headquarters for weekly meetings, Canon will be able to keep abreast of corporatewide issues as they developed and, more importantly, had a vehicle to keep communication lines open (Baldwin 1995). The risk of failure far outweighed the expense of commuting every other week to keep key executives informed. This strategy had an additional benefit since it also enabled executives and management to get to know each other much faster than they otherwise would have. By allowing management centers to become familiar with each other, each seemed less threatening (Nokia Home Page 2008; Andrade and Stafford 1997).

Conclusion

The merger between two market leaders, Nokia and Canon, will benefit both companies and help them to compete with market leaders on a global scale. Mergers can all be effective ways to improve the competitive position of an overall firm. However, any one of these processes must be an integral part of an ongoing corporate strategic plan. In addition, the evaluation process must shift its emphasis away from traditional financial performance criteria toward overall competitive dynamics. In other words, how a target firm will perform in the long term and how well its corporate strategy coincides with the strategy of the acquiring company are more important than the acquired firm’s current financial performance. This is not to say that one must only locate an acquisition or alliance target that is on solid footing. Rather, it is more important to internally evaluate a firm’s internal needs and purpose before embarking on a strategy of acquisition. If the acquisition is the vehicle, it must be a structural component of the acquiring firm’s strategy. An effective merger process flows naturally from a sound strategic planning process.

It must be built from the ground up, with its foundation based on the firm’s underlying mission statement. A firm contemplating a strategy of growth through acquisition must first evaluate its corporate mission statement and determine whether it is still appropriate given current market dynamics, global competition, technological advances, or corporate talent. In fact, competitive analysis or evaluation of the present status of the company as a whole must be made before any steps are taken toward acquisition. Given the input from this evaluation, the mission statement must be modified to reflect current thinking regarding the type of business the firm wishes to be in or perceives itself to be in. The mission statement must reflect the perceived talents and goals a firm has or hopes to have and the markets it wishes to enter. The process must be active at both the corporate and business unit levels to produce the necessary feedback and background, as well as the support of management, to make the mission statement a viable one. Finally, it must also support the possibility of a strategy of growth through acquisition. A factor that contributes to a poor perspective of the business environment is an excessive emphasis on the short term. A clear mission statement with clear goals around which activities can be centered is a way of managing the present with the future in mind.

References

Agrawal, Anup and Jeffrey F. Jaffe (2000) “The Post-Merger Performance Puzzle, ” in Advances in Mergers and Acquisitions, 1, Amsterdam: Elsevier, 7-41.

Andrade, Gregor and Erik Stafford (1997) “Investigating the Characteristics and Determinants of Mergers and Other Forms of Investment, ” mimeo, University of Chicago.

Angwin, D. (2007). Mergers and Acquisitions. Cambridge University Press.

Baldwin, John R. (1995). The Dynamics of Industrial Competition, Cambridge: Cambridge University Press.

Gaughan, P. A. (2007). Mergers, Acquisitions, and Corporate Restructurings. John Wiley & Sons; 4th Edition edition.

Galpin, T.J., Herndon, M. (2007) The Complete Guide to Mergers and Acquisitions: Process Tools to Support M&A Integration at Every Level. Jossey Bass; 2nd Edition edition.

Canon home Page. (2008). Web.

Mergers. n.d. Web.

Mueller, Dennis C. (1987) The Corporation: Growth, Diversification, and Mergers, London: Harwood Academic Publishers.

Nokia Home Page. (2008). Web.

Introduction

Nokia Company grew up as a small company in Finland with very limited resources and moved swiftly to claim the largest share of worlds market in telecommunication, moving from network infrastructures to handsets and software applications.

Incentive is both non-financial and financial reward that makes somebody partake a course of action and also choose between alternatives. There three main types of incentives. These are financial incentives, moral incentives and coercive incentives. Nokia Company offers its employees various incentives under its incentives program. These include both short term incentive programs such as individual, team, project and program incentives. It also offers the Nokia connecting people bonus which all enable the company to be in competitive.

Discussion

Nokia has different types of incentives. These include incentives offered to new customers, incentives offered when penetrating a new market and also incentives offered to upgrade performance. Nokia also offers incentives to cater for the competitive performance and consumer demonstration incentives in their store’s outlets. The employee incentives include reward programs which encompass bonuses to recognize the performance based on individual, team and company results. Nokia introduced changes to its employee incentive program in the last half of 2007 due to employee complaints. The employees are rewarded with joint equity plans which are usually pegged on the performance of the employee and company in general. These include stock options and performance shares which are both linked to company’s performance. The Nokia employees who participated in the Nokia Connecting people Bonus plan in 2007 were handsomely rewarded in partial pay.those not covered by the plan benefited in 2007 through a new plan formed to cater for factory employees and stores employees not previously covered.

The customer incentives include two levels. At the expert level, the channel partners seeking to gain higher expertise in Nokia technology tracks which are mobility, voice and security is offered. This basically involves designing, integrating, implementing, supporting both simple, moderate and complex mobility solutions to customers. At authorized level, the channel partners who want to achieve moderate expertise in the above technology fields of mobility, voice and security are offered. The basic model focuses on designing, integrating, implementing and supporting security and offering mobility solutions. These are basically the new customer incentives and the new market incentives which are offered to its customers and partners.

Conclusion

Nokia also offers incentives through its social responsibility programs. The recycling ability of Nokia products is said to be 65 to 80 percent. Nokia coordinates with its customers to bring back all obsolete mobile phones for recycling. This enables benefits to accrue to consumers, environment and producers. Nokia also cooperates with those working in Nokia care centers to take back unwanted devices. Nokia has various “experience centers” which do not sell anything but serves as experience centers for customers to learn more about phones and how to use them. Nokia dealers who perform well are also rewarded with holiday incentives by the Nokia Company. Nokia Company has also participated in various social responsibilities such as in sponsoring sports and games, building of schools and other infrastructures. All these have put Nokia in forefront when competing with the other companies.

References

Incentives offered by Nokia Company: 2008. Web.

Nokia Employee incentives: 2008. Web.

Incentives in Nokia Company: 2008. Web.

TOWS Analysis

This is an important tool in the analysis of an organization’s progress. It is usually used in implementing tactics that would result in improved performance of an organization in comparison with the competitors (Hunger, 2007).

SFAS Matrix

SFAS is a synonym for Strategic Factors Analysis Summary. It simply presents, in brief, factors that are strategic and which affect the success of an organization. It involves a person who decides to summarize the opportunities, strengths weaknesses, and threats in not more than 10 strategic factors upon which a decision is made (Saylor, 2010). Each factor is presented according to the weight it has in the process of attaining organizational success. The matrix is as shown below (Nokia, 2012).

From the table, it is evident that Nokia as a corporation responds to the strategic factors positively than an average firm.

References

Hunger, D. (2007). Essentials of Strategic Management. New Jersey: Prentice Hall.

Nokia (2012). Corporate Responsibility and Nokia’s Supply Chain. Web.

Saylor, M. (2012). The Mobile Wave: How Mobile Intelligence Will Change Everything. Perseus: Vanguard Press.