International Business Strategy - Nokia and Apple in the UK - Case Study Example

International business strategy: Nokia and Apple in the UK Introduction The growth of global business has created room for a number of multinationals to broaden their market base and target customers in foreign markets. Advances in telecommunication and the internet has made it possible for such organisations to market their products in these markets with ease and also introduce new products that meet the needs of the consumers. As a result, a number of multinationals are currently operating subsidiary units in other countries where they have posted massive successes or even failures. The ability to succeed in a foreign market is influenced by a number of markets, political, technological and cultural factors which affects the multinationals (Stevenson, 2012). Nokia and Apple are major smartphone multinationals based in the Finland and the United States respectively with operations in other parts of the world including Asia, Europe and Africa. However, when Apple and Nokia introduced their smartphone products into the United Kingdom, the response was varied and this contributed to the success and failure of the products. While Apple smartphone received a positive review and was widely accepted by the customers in the UK, Nokia smartphone received a negative review and this affected the sales of the products in the UK. Nokia was forced into the drawing board to determine the causes of the failure and evaluate its strategies to enable it reintroduce the product again. In this paper, a comparison of the tow multinationals will be done to determine the factors that contributed to the success and failure of the two multinationals in the sale of their smartphone devices in the United Kingdom (Stevenson, 2012). Nokia, being a Finish based multinationals has had significant impacts in the mobile telephony industry especially in Europe with previous studies indicating its dominance in the overall mobile market. However, the introduction of smartphones by Apple and Samsung pushed the company into venturing into the market in an attempt to protect its hold on European markets. However, the response that the company received from the market did not favour the continued production of the smartphones and this led to the failure of the initiative. A number of factors contributed to the failure of Nokia in the United Kingdom, a market that was predominantly controlled by the multinational before apple introduced its smartphones (Donnelly, 2008). In 2007, Nokia introduced its first iPhone into the European market in a response to the emerging mobile telephony in the region and in other markets across the globe. This was viewed to be a response to the success that other smartphone manufacturers like HTC, Samsung and Apple had posted within the American and European markets. However, the development of the smartphone affected the popularity of Nokia brand in the European markets especially in the United Kingdom (Stevenson, 2012). Smartphones operate on software backgrounds and this has been used by a number of mobile phone makers to increase their influence in the market and beyond. Apple produces smartphones that operate on their original software while Samsung adopts the android system created by Google. At the initial phase of introducing their smartphone, Nokia introduced its own software, a reflection of the approach that apple adopted when it introduced its iPhone (Fernández & Usero, 2009). The Symbian platform introduced by Nokia for its iPhone flopped and this marked the beginning of a challenging market experience for the company. The Symbian platform created by Nokia failed on a number of fronts and this affected the first users of the device, creating a public uproar and loss of reputation (Donnelly, 2008). Unlike the Apple iPhone platform, the Nokia Symbian platform had few applications as compared to the iPhone produced by apple. The operating system did not also provide an ecosystem that could allow other peripheral software to be installed and to operate successfully. While developing the smartphone, the Symbian developers failed to appreciate the dynamic and growing nature of the smartphone market which will demand an improve platform for the smartphones. Failure to project market expectations and behaviours especially in the United Kingdom contributed to the negative reviews that the company’s smartphone received (Hakkarainen, 2010). The impacts created by the Apple’s iPhone and the android software affected the ability of the Symbian platform to create any significant market impacts. According to a BBC funded research, Nokia lost its United Kingdom market by a large margin dropping from 38% in 2009 to 29% in 2010. Apple has posted significant success since its entry into the European market in 2007 with its iPhone, a smartphone that received significant positive reception from the British market. To demonstrate the success of apple, the company has continued to increase its iPhone products and is currently marketing its sixth generation iPhone in the United Kingdom. One of the approaches that were adopted by the multinational that contributed to its success was the diversification of the market target (Virki, 2012). As opposed to the Symbian platform that targeted business and corporate customers, Apple introduced an iPhone that targeted the entire British market from school children, average adults, middle income earners and the corporate moguls. Through this approach, Apple was able to receive significant number of buyers within a short time as compared to Nokia. Apple iPhone operated on a platform that was dynamic, broad and had features which could be used by different people in organisations, schools and medical facilities. With a simple and unique product design, Apple has been able to beat Nokia, a pioneer in the mobile industry whose smartphone has failed to meet the market expectations (He, Lim & Wong, 2006). The simple design has enabled it to target a wider market and has also enabled people from different spheres of life to customize it and enable it serve their varying smartphone needs. With its product offered in a variety of colours and operating friendly and simple software, apple appeared to understand the foreign market better when compared to Nokia, a Europe based multinational. While Nokia failed to appreciate the need of developing software that can integrate all the apps needed for a smartphone, Apple developed a platform that accepted a number of applications, similar to the operations of the android operating systems (Weber, 2011). Porter five force analysis The use of the porter five force analyses will provide a better evaluation of the nature of the smartphone market in Europe by extension and the United Kingdom specifically. This will be essential in demonstrating why Nokia failed to understand the home market, one that Apple aptly understood to enable it to succeed significantly. The entry into the smartphone in the United Kingdom is significantly low due to the massive resources and capital investments required for it’s to succeed. This has discouraged the entry of new multinationals except for heavily resources companies like Samsung, Apple and HTC. This gave Apple an advantage once it entered the market and created room for it to advance its products and market in the region (King, 2012). The rivalry in the smartphone market, just like in the mobile phone market has remained relatively high and this has affected major markets including the United Kingdom. As a result, smartphone giants like Samsung and Apple have spent a considerable amount of money on research and development to develop products which not only responsive the needs of the market but remain dynamic to changes. Smartphones are seen to possess a very short half-life and this should influence the developers to develop a platform that is not rigid but is considerate of the expected changes in the software and application market (Mlot, 2012). This has been the advantage that Apple has enjoyed as it has led in the introduction of products which are not only responsive to the market but also dynamic to changes in the operating system platform. Generation in the smartphones changes so fast that one generation become obsolete so fast meaning it has to make significant market impacts immediately after introduction to enable the business make significant sales. Currently, the smartphone market is witnessing the introduction of sixth generation smart phones, a trend that Apple has followed both in the American and British markets. The company has been awake to the fact that each generation has to be faster, efficient, dynamic and have the ability to work on various platforms and accept different applications as compared to the previous editions (Virki, 2012). Organisational culture plays a major role in the success of an organization as it determines the behaviour of the company towards the employees, the stakeholders and the competitors. However, according to insider sources at Nokia, the company’s corporate culture has contributed to immense failure in the smartphone market. While Apple and other smartphone companies continue to take massive risks and venture into software and application development for the smartphone, the approach to risk that Nokia has adopted has significantly affected its ability to make any impacts in the smartphone market (Olson, 2012). With a long history and dominance in the European markets, Nokia was preoccupied with maintaining its position as opposed to venturing into the murky waters of competitive smartphone market. With massive resources, the company has continued to tread cautiously in an effort to reduce the impacts negative market reviews may have on its products. This is the case according to analysts concerning the recently introduced Nokia smartphones. In an effort to counter the impacts of Google and iPhone dominance in the market, Nokia entered a partnership with Microsoft and this enabled it to produce windows phones (Kiiski & Hämmäinen, 2004). This has been viewed as a positive step towards countering the control of apple and Google in the smartphone market in Europe and beyond. However, the approach of the organization has continued to affect its success as critics have described the Lumia 800 operating on a windows 8 platform as too little too late. As a result, despite the great reviews that the phone has received due to flexibility and dynamic nature, Nokia Lumia has made a minor 2% impact on the European and British market. With only a 2% market share as compared to the massive share controlled by iPhone and Google android, the introduction of Nokia Lumia smartphone has failed to raise significant market waves in Europe and Britain (King, 2012). Though the company introduced this Microsoft smartphone into the market after the failure of the Symbian operating platform, the sales of the current sales of the Symbian smartphones is way above that of the Microsoft Nokia Lumia. This has led to a decline in the company’s share by over 20% immediately after the launch, an indicator of the failure in making significant impacts (Desmarais, 2013). Apple has developed a strategy of market responsiveness and the ability to develop products that incorporate the views and demands of the consumers. This has been captured in the organisation’s market centred approach in the United Kingdom which has enabled its sixth generation phone to meet the demands of the consumers. Nokia, billed as having a mantra for listening to the customers has failed to live to the expectation of their culture by not being able to develop market centred products (Olson, 2012). Nokia has witnessed strategic erosion and this has led to a decrease in its willingness to respond to the market needs and develop smartphones that can meet the current demands of the customers. In 2007, Apple was involved in the marketing and the introduction of its iPhone, a gadget that received positive market review while Nokia was involved in research and development to improve its Symbian platform. Strategic erosion has affected Nokia’s ability to sustain its technological innovation and maintain a positive market leadership in the United Kingdom (Weber, 2011). Conclusion The success of multinationals in foreign markets is influenced by a number of factors, with some beyond an organisations control and influence. However, the success of any organization in a foreign environment is influenced by strategic decisions and the ability to respond to the needs and the dynamic nature of the market. Apple and Nokia have witnessed significant growth in different parts of the world but the results posted in Europe, specifically the United Kingdom has posted a contrasting image of the success of the two organisations (Dan, 2012). Apple and Nokia launched their smartphones in the United Kingdom in 2007 and the response posted by the market for the two products differed significantly. Nokia failed to make significant impacts in the market and this led to the failure of its smartphone while Apple’s smartphone received massive support and positive reviews from the customers. Since the introduction of the Nokia smartphone in 2007, Nokia has adopted a differentiation strategy and this was reflected on its Lumia smartphone (Mlot, 2012). Its differentiation can be viewed as being both physical and nonphysical as demonstrated in the design of its products and the innovative technologies in the smartphones. Though viewed as a market changer after the collaboration with Microsoft, Nokia Lumia smartphone has failed to make significant impacts in the British market. Currently it controls a paltry 2% of the country smartphone market as compared to the iPhone and Google android smartphones. 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