New Ventures are All Around Us - Assignment Example

Group Member Currently, Nokia has taken a bit of a hit on its public relations side. Troubles with the networks equipment division of the company made it necessary for it to streamline that division. This led to layoffs and organizational restructuring, which hurt the company’s image in Finland, leading to a number of court cases against the company and even a documentary television show that portrays the company in a negative manner. This was a missed opportunity for the company, since the company could have found a way to save job, despite this restructuring, as this would have made the organization more popular within its home country. With such a competitive marketplace, a company like Nokia cannot afford to have any negative publicity and that is exactly what this situation brought. Many times, people will not remember why they think of a company in a negative way, they will just know that they do. Meanwhile, positive publicity works the same way, as people will not remember why they think of a company in a positive manner, just that they do. A second missed opportunity for the telecommunications giant was not offering mid-level low priced cell phones when the market was reaching its peak. This allowed for rivals to dominate this market, hurting business to the point where shared came in much lower than expected. It’s difficult to understand what Nokia could have been thinking in this situation, as the American market is flooded with cell phones, but the consumer is always going to be on the lookout for the best deal. This means that they can a great number of features, for a reasonable price. Nokia’s competitors gave their customers these features, while Nokia did not. In an industry where brand loyalty makes up a great deal of the business, this was a major miss for such a large corporation to be guilty of. By giving the customers what they want, the company also could have enticed them to return to the company when they desire an upgraded phone, which would, of course, cost the more. A third missed opportunity for this company is that it did not put enough focus on its mobile phone division, as it was too concerned with breaking into new markets. This is a problem because cell phones are what the company is known for and, therefore, where it stands to make the most money. If the company is to get away from that, it remains to be seen what else it can accomplish in other industries. Therefore, Nokia must once again focus solely on its cell phones in order to assure its investors that it is focuses on maximizing profits. This is a missed opportunity because it occurred at a stage where cell phone sale were heading to new heights. Cell phones are becoming more common than regular phone lines and Nokia needs to recognize that it must stick to what it knows. Expansion into other areas is fine, but it must not come at the expense of the cell phone division. Group Member 2 Clothing store Marks & Spencer has a unique style of distribution, which has caused in problems in the past. A major problem in the apparel industry had been the lack of communication between these distributors and the suppliers. They were never on the same page so there was always either too much of a product, which leads to forced clearance sales at a huge cost to the distributor, or too little of a product, which means that there will be a drop in sales. This is what has happened to Marks & Spencer, as its inventory often becomes outdated and, therefore, it must be sold at a clearance price. This is a missed opportunity because such a large corporation cannot afford to be continually giving away products at a fraction of their worth. Whenever money is lost like this, it is a missed opportunity because it is a failure to effectively compete with other stores in the same market. Marks & Spencer has always attempted to make quality its main goal. It also developed a reputation of offering good pricing for this quality, which is very important to the customer. When this reputation began to weaken, however, the company ran into some serious financial difficulties. This is another missed opportunity for the company, as when the consumer realizes that the qualities of the goods is not what it once was, he or she will be more likely to go somewhere else where the quality still is acceptable. This is especially important for a store that charges more than others. The customer wants to get full value for everything that he or she buys and when this does not happen, the business will suffer. Marks & Spencer had also always marketed itself as selling only British-made goods. While this was a highly marketable thing for consumers, as this is a British company, there were other difficulties involved with it. This business model required for suppliers to sign long-term contracts with the chain, as they did not want to lose a supplier on short notice, since there are only so many British suppliers available. This led to certain manufacturers relying too heavily on Marks & Spencer to meet their goals. Therefore, it made it very difficult for Marks & Spencer to change their manufacturers as the times changed, as this would leave these manufacturers over-exposed and could potentially be crippling. This means that Marks & Spencer no longer relies on contracts, which provides the company with added flexibility, but no long-term commitments to anyone, which is a hindrance to brand loyalty. This can be viewed as another missed opportunity, as many people find one specific brand of clothing that they prefer. If they cannot find this brand of clothing at one store, they will simply go somewhere where it is available. For a very long time, the St. Michael brand was the signature brand of the chain. This stopped in the later 1990s, as Marks & Spencer became the brand name as well, but these changes often do not make the customer happy. Group Member 3 A company that could use some help with its missed opportunities is American Airlines. Currently, we are in a period where airlines are losing a great deal of money. Because of this, the aviation industry is ultra-competitive and airlines must do whatever they can in order to secure customers. One opportunity that American Airlines has missed out on is with giving the customers something that they cannot get anywhere else. Since things are so competitive, customer service has become the most important aspect of air travel. Customers want to feel as if they are special, rather than simply being treated as another sale. Most airlines are guilty of not giving the customer anything that they cannot get somewhere else. What this does is lead to the customer simply flying with the airline that costs the least. American Airlines has failure to create a unique flying experience that will make the customer want to return to them, even if it does cost a little bit more. Another missed opportunity for American Airlines is it marketing procedures. Since this is such a large corporation, it spends a great deal on advertising in order to attract customers. While this advertising budget may have help it in the past, this is no longer the case in today’s aviation world. Word gets around very quickly whenever a customer has a bad experience, making a huge advertising budget less important than ever before. While it is important for a company to get its name out there, simply advertising will not convince a customer to fly a certain airline. Basically, when someone decided that he or she is flying somewhere, he or she will be flying regardless of advertising. American Airlines should have reallocated some of this advertising budget to other areas or even make ticket prices lower instead of this advertising because this is what the customer wants. A third missed opportunity for American Airlines has been its inability to care about repeat business. This corporation has the attitude that it can afford to lose a few customers if it helps profits. The problem is that there are already not enough customers to go around, which means that the airline is losing money. If the company would give readily available incentives to repeat customers, it would be able to attract frequent flyers, which is the customer that drives the industry. One such opportunity would be to advertise that frequent flyers will always get the best fare on that date, which would help to eliminate empty seats, which are a huge cause of airline financial losses. Strategic New Venture In order to succeed in the future, Nokia must be committed to focusing on developing the cell phone market, rather than other outside ventures, which can be done through a new commitment to its cell phone division. Nokia’s division strategy should be to simply focus on its mobile communications division, which it has now broken up into four parts, and not focusing on things like paper, aluminum, and computer like it had in the past. By doing so, Nokia will create the most powerful handset division in the world, which will make shareholders happy because they will always be likely to see a significant return on their investments. The divisions are made in order for the company to evolve as the cell phone has and is right on time because “the company had taken the first step toward divesting its paper division and was seeking for its rubber subsidiary-disposals that would provide badly needed funds for electronic expansion” (Steinbock, 2001, P. 78). With all the new multimedia features that are now available on cell phones, it is necessary to create a division to focus on this. In short, the divisions are implemented so that the company can look into the future, rather than focusing on what it has already accomplished. The following are ideas that the company can implement in order to ensure that it is focusing entirely on its cell phone division because this division is what drives the company. Nokia is now made up of four business groups which are Mobile Phone, Multimedia, Enterprise Solutions, and Networks. The Mobile Phones division is the most important one in the future of Nokia because it is what the company has been known for in the past and will continue to be known for in the future. Furthermore, the other divisions have been set up in an attempt to aid this division, as it hopes to remain at the top of the cell phone industry. This division hopes to create a high volume of sales to individual consumers, which makes the needs of these consumers very important to the division’s future, as the goal is “a positive experience beyond expectations - the ultimate goal in all our work” (Lindholm & Keinonen, 2003, P. 82). Currently, Nokia has established a cliental because its phones are easily accessible and have a variety of features that the public finds attractive. These features include camera phones and MP3 players, which are pretty well necessary to include with high end phones currently. In the first quarter of 2006, Nokia was not only the worldwide leader in sales of mobile phones and camera phones, but it also sold over 15 million MP3 player phones, making it the leader in that category as well. This division wishes to sell more MP3 phones than Apple sells iPods in the near future. This means that this division has a great amount of growth potential, as MP3 phones will only become more popular in the future and Nokia is already the worldwide leader in this sector, as “with all the talk of the iPhone you might think that Apple was the only company creating fancy new cell phones. Remember Nokia? This Finnish company makes the N76, a smartphone masquerading as a high-fashion accessory” (Biggs, 2007). This technology will help the Nokia cell phone division to compete with other companies in the industry. The Multimedia division is working towards creating new technologies that will bring new and exciting experiences to the customers. While these technologies are mainly things that are being developed for cell phones, this group also works with companies that are found outside the telecommunications industry in order to works on other types of media. With technologies like Bluetooth and GSM gaining in popularity with cell phone users, this division has a great amount of growth potential because it can develop new things that satisfy cell phone users’ thirst for more technology to be implemented. The growth potential of this division is largely dependent on the people working in it, as it is solely up to them to develop new technologies that people will want to use on a regular basis and will improve the cell phone division at Nokia. The Enterprise Solutions Division focuses on businesses, corporations, and institutions by offering them mobile devices, security infrastructure, software, and services. This includes things like network security, mobile corporate e-mail, and allowing corporate telephone systems to work with Nokia’s cell phones. This division also has a great amount of growth potential, as the demand for staying connected to the office at all times is growing considerably. By giving these corporations solutions to their numerous communication issues, Nokia will be able to make a name for itself in this field, which will cause significant growth as their technologies expand as well and will attract business clients to the Nokia cell phone division. The final division of Nokia is called Nokia Networks. This division provides mobile network infrastructure, network platforms, and services to operators and service providers. By the end of 2005, the Networks Division has over 150 customers in more than 60 countries. This led to the network reaching over 400 million people worldwide. This network has since merged with Siemens, which created one of the world’s largest network firms. The growth potential for this division is limited, although the merger will free up some additional resources so that expansion can be explored in the future. The cell phone division of Nokia could be largely driven by these networks, as the company would be able to sell plans with its own cell phones if this is successful. Nokia is currently very popular in the smartphone market, as it is the majority owner of Symbian, and this technology is expected to get more popular in the future. This means that the Mobile Phones Division can expect to continue to grow as more people upgrade their current handsets. Also, the company is still by far the largest vendor of cell phone in the world. It has double the market share of its nearest competitor. Since Nokia is so large, it is also able to gain cost advantages. Finally, Nokia is probably one of the 20 most recognizable company names in the world, which automatically makes it an option for anyone who is seeking to purchase a cell phone. All of these factors point to the Mobile Phones Division continuing to grow in the future. The first weakness is that the N-Gage was considered a major flop and cost the company a lot of money. While the idea was good, it was simply not accessible enough for its target audience. Also, “the old 2003 N-Gage and its successor, 2004’s N-Gage QD, were good ideas that were ahead of their time“ and according to Tomi Huttula, a Nokia product manager, “Today’s phones are so capable. The graphics problem has been removed. And phones today are always connected and you always carry them with you. Phones are now the perfect device for gaming“ (Stone, 2007). Gaming is quickly becoming mandatory to be considered an innovator in the cell phone industry, so Nokia must work on this in order to grow. Currently, Nokia has the opportunity to increase its presence in the CDMA market, which is something that the company is just now entering. Also, there is plenty of growth room in countries where cell phones are just now becoming mainstream. A country like India has an enormous population and a relatively small number of cell phones, so it is a market that should be explored. If Nokia was able to leverage its infrastructure, it would be able establish a stronger position with carriers. Carriers are responsible for a large number of cell phone sales, so this is very important. Nokia was very slow to get involved in 3G, which means that they have run the risk of being displaced in that sector by other companies. Also, smaller Asian companies are entering the cell phone market at a rapid rate. If they enter the North American market, it could cause major problems for Nokia. Finally, many carriers are attempting to lessen their dependence on handset providers by developing their own handsets. Since Nokia relies so heavily on carriers to distribute their handsets, this could turn into a major problem. Nokia must work on this problem in order to help out its cell phone division in the future. In order to recover from these weaknesses, it is important to begin a campaign where Nokia reaches out to the people in an attempt to regain their trust. Since the company is now recognized as being a global giant, there is automatically a negative connotation that goes along with that. Nokia must re-establish itself as a company that cares about its customers through effective marketing. This must especially be done in North America and Europe, where consumers have so many choices of cell phone because it is such an important market. In order to lessen the effect of carriers developing their own cell phones, Nokia must make their phones so popular that the public demands that they be made available. This means that the Mobile Phones Division and the Multimedia Division must work extra hard to stay ahead of the technologies that are being utilized by other companies. In doing so, Nokia will once again be recognized as the first choice for cell phones globally. Nokia is not currently in dire straits financially, but it must remain on top of its problems in order to avoid major losses in the future. The cell phone industry is growing everyday and as the leader, Nokia must prove to the customer that it is their best choice for a cell phone. In doing so, the company must be able to relate to the public once again, while still identifying itself with corporations and the multimedia sector. By splitting up into divisions, Nokia hopes to lighten the load of the people at the top of the company, since they are handing out responsibilities elsewhere. Nokia should be able to hold onto its spot at the top and avoid any major economic problems by simply identifying itself as the company that knows what the consumer wants. It will be difficult, but this new attention to the cell phone division should help to accomplish this feat. Works Cited Biggs, John. 5 July 2007. "Nokia, Without Fanfare, Introduces a Superphone Without Contract Obstacles". The New York Times. Lindholm, Christian & Keinonen, Turkka. 2003. Mobile Usability: How Nokia Changed the Face of the Mobile Phone. The McGraw-Hill Companies, New York. Steinbock, Dan. 2001. The Nokia Revolution : The Story of an Extraordinary Company That Transformed an Industry. AMACOM Books, New York. Stone, Brad. 27 August 2007. "Play It Again, Nokia. For the 3rd Time". The New York Times. Read More