A Strategic Exploration of Nokia's Success - Case Study Example

? Nokia’s External and Internal environments Nokia’s External and Internal environments Introduction Nokia is a corporation in the mobile phone industry located at a headquarters called Keilaniemi, Epsoo in Finland. The company deals with communications and information technology. The company’s main products are mobile phones and information technology portable devices. However, it provides other services such as software applications, music, internet services, and so many other minor services. The company is made up of around 122,00 workforce in approximately 120 countries. However, the sales of the Nokia products take place in around 150 countries. The company is the second best producer of mobile phones and makes annual revenue of approximately thirty eight billion pounds. The company’s market share is around 22.5 percent (Luo, 2000). One of the general environments that affect Nokia Company is international. This factor illustrates those events that are taking place in other foreign countries. The dimension of international type of environment influences many other factors of the external environment of a company. These factors include the coming up of new customers, competitors, the reliable suppliers, social shapes, trends of the economy and technology. Nokia Company has an obligation to compete with other companies globally. Samsung Company is one of the competitors that have outweighed Nokia Corporation from being the best vendor as from the year 1998 to the year 2012. The coming up of smart phones which are made by other vendors, has reduced the market share of Nokia Corporation. To solve this problem, the company made a strategy to collaborate with Microsoft Company so that the mobile phones (smart phones) produced will have an operating system incorporated by Microsoft’s phone type of windows (Mimoun, 2009). Coming up of cheap but high quality mobile phones from countries such as India and Korea has greatly affected the industry of mobile phones. However, a corporation such as Nokia faces stiff competition although the company’s products are of high quality, but the pricing becomes tough when comparing with other companies that sell their products at a lower affordable price. The corporation has to take an effective measure to ensure that it captures more customers. In case the company does not lower its prices, then it has to increase the features of its products. Comprehensively, when similar products from different companies have varying costs in that one company sells at a lower price, and the other one sells at a higher price, the one with the lower price will be the consumers preference and choice. Therefore, Nokia Company must do something worth either by decreasing the prices of its products or improve the quality of the mobile phones (Steinbock, 2010). This will help the corporation increase its share in the market. Another general factor of environment that affects Nokia is technology. Technology is one of the most developing things in the world. Several companies are coming up with new, innovated technology in the industry. Coming up of newer phones with a high level of technology, affects the industry greatly. Nokia Corporation has to ensure that it involves many innovations and advancing of technology, by embracing any change to ensure that the products are in the same level with the technological growth. Many companies have come up with better-advanced technology level. These companies include Samsung and other producers of smart phones. Therefore, if Nokia will not be more creative and strategically improve the technology of its products, it will loose to its competitors (Daft & Marcic, 2010). In every business, there are major internal factors that affect it either positively or negatively. These factors are those that are within the organization itself. Capital is one of the factors that affect Nokia. For the corporation to do innovation and advance technology, it requires large amounts of capital. Fixing new soft wares and features in the mobile phones is an expensive task for the company. Therefore, the company has to incur huge amounts of capital now and then in order to compete fairly with other companies. The corporations has made a strategy of reducing costs incurred in resaerch and instead concentrates on enhancing softwares for phones and customize them too. This is a good strategy, and if well implemented, it can help the company have a better chance of dominating the market. The most important thing is not reducing cost, but improving on quality and technology in order for the corporation to outshine other companies in the market (Luo, 2000). Nokia faces two major competition forces. These forces are the threat of substitute products and new competitors in the mobile phones industry. Many companies are producing substitute phones and at a lower price than that of Nokia. This is a threat to the company because the customers have an alternative of purchasing a phone from another company so long as the phone has the same operations and features as that from the Nokia Corporation. Coming up of new competitors, poses a threat to the corporation. There are so many coming up competitors from the world, who are coming up with better qualities and this reduces the market share and the profitability of a company (Steinbock, 2010). Therefore, Nokia must be in a position to know what strategies the competitors apply and improve on its products and strategies’ implementation. To fight the two competitive forces, Nokia ensures that its products are of good and high quality. The corporation makes sure that its products are unique in their own way in terms of applications and features. This is a good initiative to ensure a healthy competition within the industry. The company works on improving better application soft wares in its phones to ensure that the phones are of high technology and good quality. The coming up of the substitute phones is a major threat to the corporation. Therefore, the company overcomes this threat by ensuring that innovation is a key factor to enhance the technology level of its products to ensure that it has all models of phones. However, the corporation must be very innovative, creative and make better models with high technology to ensure that ultimately it has a chance to conquer among other competitors. Comparing the prices of iphones and the Samsung galaxy types of phones, Nokia window phones prices are high although they cannot reach the level of the two phones in terms of innovation and features. I will be wise if Nokia lowers the charges of its phones relatively because it will continue loosing customers to its competitors (Daft & Lane, 2009). One of the serious external threats of Nokia is the emerging of newer, unique, and developed technologies. Another threat is the coming up of strong types of competitors like Google and Apple. These competitors have invested and will continue to invest more and more in order to dominate the industry and the market. For the company to overcome these threats, it has to do its of innovation and invest heavily in producing better devices, which will be more advanced in terms of technology in order to outweigh the competitors. However, the corporation has the opportunity to develop more varieties of communication devices since it has a good leadership in the industry (Mimoun, 2009). The corporate has an opportunity to produce the best products for it has the experience in the industry. The corporate should involve a lot of innovation in terms of customizing and enhancing technology in order to develop better devices. With the knowledge that the corporate has concerning the field of production combined with what the competitors are doing, this can lead to production of better advanced products. Furthermore, the corporate has been in the industry for quite a long time to understand what other companies are doing in their production line. Nokia has portrayed a lot of strength because it has been among the leading companies in the industries of electronics and telecommunications for quite a long period. The corporate has portrayed a strong ability because it has been able to adapt in the market since it started. It is clear that the company started in the industry of rubber back in the 19th century. All through it has been able to adjust in order to fit in the market by coming up with new production strategies all through its life. However, the corporate weakness is that it has experienced huge growth, but it cannot be in a position to maintain its rate of growth at this current period. The corporate can maximize its strengths of leading in the market by coming up with better advanced and cheaper devices to maintain a large market share. Another strategy that the corporate can utilize to maximize its strength is making sure that it has the best products as compared to its competitors since it has been in the industry for a long time. Innovation should be the main strategy of the corporate in order to ensure that it continues to lead in the market. For innovation to be effective, the corporate requires to employ more skilled and professional workforce whose results will not be comparable. Borrowing of ideas and researching about the competitors can help in maintaining the corporate strengths. Several measures should be taken by the management in order to outdo its weakness. The corporate should ensure that it sets new strategies and implement them wisely. Otherwise, if its policies remain the same, the corporate will continue decreasing in terms of its growth. One of the strategies is to employ new policies and employing new, advanced technology in order to produce the best. Nokia’s resources are the skilled labour was the main necessity in the company. The corporate could not get the required capabilities from its home country, the company searched or skilled labour from other foreign countries. The foreign labour and the home-acquired labour are the main source of success of the corporate (Steinbock, 2010). All that the company needed were people who could fit well in the corporate culture. However, the company’s resources are the skilled labour and knowledge. High intelligence personnel are the main resource of the company. Innovation requires people who can think intelligently and come up with something unique. Another resource of the corporate is share capital. The company features in the stock exchange list of New York and in Helsinki. The core competencies of the corporate are the originality of its products and utilization of Microsoft software to come up with better models now and then. The chain value of Nokia involves both the primary and support activities (Mimoun, 2009). Primarily the company is able to acquire soft wares from Microsoft at a relatively lower price. These soft wares are used to enhance the technology of the products. The operations of the corporate are split into phones and IT devices production. Distribution of the products is done in about 122 countries, but the products are sold in around 150 countries. In the support type of activities, technology enhancement is very crucial for the company. Application of technology enhancement is through training, innovation and utilization of knowledge and intelligence. Management of the human resource in Nokia matters most since skilled employees are required in order for the corporate to achieve its goals. It is a very crucial department since it can assist in gaining an advantage in the competition world through knowledge of the employees and the skills. Conclusion Nokia Corporate faces more external forces than the internal forces. The external environment is the biggest determinant of the success of the corporate. However, intelligence, skills and knowledge of the employees is an internal factor that affects the performance of the corporate. The higher the innovative level of employees is the higher the achievements of the company in terms of competition. For a business to maintain its growth rate, it must be in a position to outdo its competitors and produce products as per time and technological standard. Therefore, a company like Nokia should be in a position to enhance its technology according to the technological growth. A company’s success is determined if it is able to overcome all the external and internal threats. Nokia will be able to lead in the telecommunication industry if it will overcome the forces of competition and ensure that innovation applied is of a very high degree. References Daft, L. R. & Lane, P. (2009). Management. Mason: Cengage Learning. Daft, L. R. & Marcic, D. (2010). Understanding Management. Mason. Cengage Learning. Luo, Y. (2000). How to Enter China: Choices and Lessons. University of Michigan Press. Mimoun, K. (2009). A Strategic Exploration of Nokia's Success: A Brief Overview. Munich: GRIN Verlag. Steinbock, D. (2010). Winning Across Global Markets: How Nokia Creates Strategic Advantage in a Fast-Changing World. New York: John Wiley & Sons. Read More