The Activities of the Business in Terms of the Scope - Case Study Example

BUSINESS STRATEGY Business Strategic analysis: A business strategy is basically the purpose of sketching the long term direction of the business house. It plans the activities of the business in terms of the scope and the opportunities of the firm in the market. Business strategy is often referred as a process as it is an ongoing event. “There is a need to continually review strategic objectives because the environment is always changing”. (Campbell, Stonehouse & Houston, 1999. p1). Strategy is the other term for business planning to obtain competitive advantage in the market and to analyze the future events to operate successfully in uncertainty. The business strategies of an organization aim at bringing out strategic decisions about the choice of products, customer needs, and new opportunities in the terms of market and technology and other important decisions which help the firm to gain a competitive advantage in the market. The basic purpose of the strategic analysis is careful assortment and application of the company’s resources for maximizing the performance of the organization. Analysis of the business strategies provides us with an overview of the internal environment of the organization. The strategic analysis further provides with analysis of the strengths and the weaknesses of the organization, it gives an idea of the expectations and aspirations of the stake holders of the organization. "Strategy requires thought, tactics require observation", – Max Euwe. (Business strategy case studies, January 2010). Analyzing how the business environment is considered in strategy formulation: The business houses cannot take appropriate and important decisions without the availability of the complete information of the external environment. Business organizations cannot run in vacuum and it has to involve the external environment. There are many related parties to the business like the customers, society, environment, employees, creditors etc. It is very important for the firm to have a complete knowledge about its internal and external environments. A thorough study of the internal and external processes of the organization helps it to understand its strengths by establishing the points or the areas where the organization is good at as well as understanding its weaknesses, the areas where further improvement is required. This analysis would further help in understanding the external environments to understand the scope of the organization in the future. The strategic planning and recommendation requires the thorough understanding of the internal environments of the organization so as to plot the strategies accordingly, for the maximization of the benefits drawn from the strategies. The stake holders of an organization play an important part in the policy formation and implementation of the strategies. The values and the expectation of the stakeholders guide the business plans of the system. The stakeholders are the people who have the power of formulating and approving the business plans. The stakeholder analysis is very important for understanding the needs of incorporation of new strategies. In addition to the stakeholders, there are other important parties like the suppliers and the creditors of the business. The business is accountable to all the parties for their performance. The needs and requirements of the external parties are integral in determining the strategy of the company in the future. In this paper we undertake the study of the Nokia INC. and analyze the strategic plans of the organization. We undertake step by step study of the various factors responsible and taking part in the strategy formation of the organization. We begin with understanding the goals and policies of the organization to understand the effectiveness of the strategies involved. Stakeholder analysis: The stakeholder analysis helps in facilitating the policy reforms of the concerned institution. The information availed from the analysis helps to understand the influence of the partners of the organization in the strategic planning procedure. “With information on Stakeholders, their interests, and their capacity to oppose reform, reform advocates can choose how to best accommodate them, thus assuring policies adopted are politically realistic and sustainable.” (Stake holder analysis). In this analysis we try and understand the power and the position of the stakeholders in the organization. We further try to find out whether policies adapted by the stakeholders of the organization are in the favor of the organization. Nokia is a world renowned organization and deals primarily in broadband communications infrastructure and mobile devices. Nokia is a market leader in the field of telecommunications. The analysis on the stakeholder’s policy states that the stake holders of Nokia Inc are in favor of investing huge sums on the research and development of the new products and technology. Nokia being the market leader deals with the competition by being updated in the field of technology and customer service. The stakeholders support the strategies of the research and development team and come up with new technologies and ideas. In the recent years the company has come up with plans to develop products which are environment friendly, Nokia Inc is working towards creation of new products which are recyclable. "IPP has been a very good initiative, helping us and our stakeholders in identifying and understanding the environmental problems associated with mobile phones, finding feasible improvement possibilities, and sharing ownership", says Pranshu Singhal one of the project coordinators with Nokia Inc. (Sormunen, 2010). The stakeholders though have important influence on the policy making of the organization and they generally do not interfere with the investments in the technological up gradations. Environmental and organizational audit: The development of the company depends on how the company performs. It depends on the strengths and the weaknesses of the company. For this, the organizational audit is required. The audit refers to the process of checking the performance and it can happen in every department of the organization. There can be a case for the environmental audit also where the performance of the company in relation to the environment is evaluated. In the modern world, much importance has been laid on the environmental factors. Companies are to maintain a clean environment and it should perform various activities that help the society. These kinds of activities increase the visibility of the company. It has become an important ingredient in the performance of today’s companies. The audit process helps in the formulation of strategies in the organizational and the environmental level. Nokia is the largest mobile phone company in the world. After its establishment this firm rapidly expanded throughout the globe. The company is backed by the highly qualified research department. The organization believes that efficient research and development is critical to remain competitive in the ever expanding communications industry. “As of April 1, 2007, we had R&D centers in 11 countries and employed 14,500 people in research and development, representing approximately 32% of Nokia’s total workforce.” (Research, 2010). The resultant products of the organization are very user friendly thus making it the highest demanded product in the market. Financially the company is very strong as the organization is doing a huge profitable business worldwide. The organization deals in the communication sector which is the highest growing sector in the recent scenario. The organizations strength is that it has the determination and the capability to take risks which is very important in the current scenario. The company invests to understand and foresee the future market scenarios so as to be prepared of the opportunities and challenges. The company has a strategic service vision and develops its operating strategy accordingly. The firm is structured and allocates its resources in maximization of the returns. Applying the strategic positioning techniques to the analysis of Nokia Inc we discover that the organization has developed a well planned capacity strategy which ensures enough capacity of the production and manufacturing at all times. This helps in maintaining the costs of production minimizing the wastages. The capacity of the system is such that it can quickly change its products to meet the demand alteration scenarios. The strategic positioning techniques suggest that an ideal firm should have a service strategic vision to maintain customers in the competitive scenario. The Nokia Inc has a strategic service vision that supports the operating strategy of the organization thus helping it to maximize its service deliveries. (Nokia’s Business strategies in India, January 2010). The process of strategic planning: Value chain analysis The value chain analysis is the analysis of the primary activities of the firms which add value to the activities of the organization. In this section we analyze the value chain system of the Nokia Inc as it is a important part of the strategic planning and management. The value chain activities can range from internal activities like the human resource management to external activities like the procurement sourcing. Nokia being a market Leader in the communication sector should adopt value chain as a important part of its strategy. The value chains in different sectors aim at maximizing outputs with minimizing the operating costs. Nokia needs to adapt few policies so as to protect the organization from the global competition. The mobile operator industry is a rapidly expanding industry and thus the organization requires a continuous support from the R& D team to meet the ever increasing need of differentiation in application and product. “To do this, increased investment in research and development for premium mobile a data application that aids in increasing non-voice data revenues is likely to aid mobile operators in dominating the expanding market.” (Cuizon, April 2008). The next step for the organization should be the increase in the penetration of the mobile services; this can be done by targeting the applications properly. This would lead to expansion of the customer base of the organization and thus automatically increasing the data revenues. Further the company can introduce the changes in the process management of the system so as operate more efficiently in the process. “Having an excellent business process in place provides greater clarity on strategic direction and cascade it through your organization.” (Cuizon, April 2008). Strategies should be adopted to reduce the wastes in terms of overproduction, inventory and defects. Communications industry is a ever changing industry where the technology changes rapidly thus huge inventories can lead to huge losses. It is very important to maintain a harmonious relationship between the employees and the customers which would definitely help in boosting of the profits as well as the brand image of the firm. Improving of customer relationship is very important to achieve competence. Evolving the business and its plans with time is the key behind the success of any organization. According to Kotelnikov (2001) “success in digital economy is the implementation of an integrated value chain that extends across – and beyond – the enterprise.” (Cuizon, April 2008). Thus Nokia Inc should implement the value chain strategies as a important part of its corporate strategy to achieve its aim of growth and sustainable mobility across the world. Examining approaches to strategy evaluation and selection: The telecommunication sector is a very fast paced sector and thus Nokia has to survive in an ever changing and a uncertain environment. For its successful survival Nokia needs to look into the alternative ways or strategies of operation. “Future logistical operations of Nokia will have to make room for the necessary changes.” (Cuizon, April 2008). The alternative strategies could range from development of new technology and products to increased customer participation and satisfaction in the distribution of products. The company can increase the customer participation in the operational and developmental plans by adopting strategies of market research. The organization can provide price incentives in terms of discounts for the distribution of products in the off peak period to minimize the wastes and inventory accumulation. The company can develop innovations in the fields of marketing and operations for better efficiency. The company can also adopt the policy of job rotations for the employees so as to minimize the idle time. Labor can be shifted from one department or place to another. Right timings of decisions in the telecom industry are the most important device for successful operations. The organization needs to adopt three simultaneous plans so as to emerge successfully in the ever rising global competition. These plans are the adoption of the substantive growth for the products and the technology. Investments are required in the departments of research a development so as to emerge with new innovations and technology in the market. The telecommunication sector needs technological and operational innovations for successful and sustainable growth. A limited growth in terms of production, which would help to decrease the inventory accumulation and the resulting wastage. As already discussed the huge accumulated inventory hardly comes to use in the ever evolving sector like the telecom sector. The company needs to keep a check on its production capacity and avoid wastages. The final would be the retrenchment policy for the labor. The operational plans should focus on the fact that not many employees are required for maintaining the service quality of the customers. The employees should be few so as to reduce the idle time. They should have flexible profiles so as to travel from one place and department to other. Nokia strives to be the market leader by introducing innovative products and technology. “Being ahead of its competitors and abreast with the changing needs of its customers is what keeps Nokia at the forefront of the mobile industry.” (Cuizon, April 2008). However the organization needs to be a little more careful about its value chain procedures and the inventory management schemes to maintain its position as the global leader. References: Campbell D., Stonehouse G. & Houston B. (1999). Business strategy: an introduction. Butterworth-Heinemann. Burlington. Business strategy case studies (January 8, 2010). Casestudyinc.com . Available at: http://www.casestudyinc.com/Business-Strategy-Case-Studies (Accessed on June 17, 2010) Stake holder analysis. (n.d). East Asia/Pacific Pilot Presentation. Available at; http://www1.worldbank.org/publicsector/anticorrupt/PoliticalEconomy/PDFVersion.pdf (Accessed on June 17, 2010) Sormunen K. (2010). Case studies: Integrated Product Policy update. Nokia.com. Available at: http://www.nokia.com/corporate-responsibility/environment/case-studies/integrated-product-policy-update (Accessed on June 17, 2010) Research. (2010). Nokia.com. Available at; http://www.nokia.com/about-nokia/research/research (Accessed on June 17, 2010). Nokia’s Business strategies in India, (January 8, 2010). Casestudyinc. Com . Available at: http://www.casestudyinc.com/Nokia-Strategy-India (Accessed on June 17, 2010) Cuizon G. (april 22, 2008). Nokia. Bizcovering. Available at; http://bizcovering.com/major-companies/nokia/ (Accessed on June 17, 2010) Read More