Strategic Alliance between Microsoft and Nokia - Case Study Example

Report on Strategic Alliance between Microsoft and Nokia Table of Contents Introduction 4 Company Background 5 External Analysis 6 PESTEL Analysis 7 Porter’s Five Forces analysis 9 Industry Life-Cycle Analysis 13 Internal Analysis 16 Competency Framework 16 VRIN Framework 18 Nokia & Microsoft Pre-alliance 22 Issues and Challenges in the Company 24 Strategic Options for Microsoft and Nokia 25 Ansoff’s Matrix 27 Benefits of the Alliance 28 Recommendations 30 Conclusion 31 References 32 Introduction Almost two years ago, during mid September 2011, Microsoft, the US based operating system giant went into strategic alliance with the Finland based mobile giant Nokia to promote and sell their windows based mobile phones in the market that can compete with other smart phones like Apple iPhone and Google’s android based phones. Nokia, often termed as the pioneer of introducing mobile phones in the market was facing an imminent threat of survival due to their dipping market share. It all started when the symbian operating system based Nokia phones were perceived as little innovative while comparing with other phones such as Apple’s iPhone. The strategic alliance first launches a toolkit which can convert Nokia’s Symbian operating system applications to Windows applications. The core objective of the alliance was to combine the traditional strengths of the two companies to create synergies that can be competitive enough to face the market competition. Windows phone, which was often considered as the second best innovative phone in the market after Apple’s iPhone, was focused to deliver their offerings with Nokia’s product line. As a result, Nokia Lumia was launched which was the first Nokia’s windows based Smartphone. Two years after its formation, the alliance was facing significant challenges. The reason behind this was the unexpected slow market growth rate of Nokia’s Windows phones. Recently, Microsoft went to acquisition with Nokia’s handset based business to develop more innovative products up to the modern standards. The Windows based Phone ecosystem, like the platform itself, needs to be more mature, and they need to improve their user interface in a regular basis (Thurrott, 2011). Company Background Company background provides an idea of the basis on which strategic options being formed. Company information contains the company’s annual review report and their change in market share, market growth with respect to different strategic options used by them at different points of time. Company background of Microsoft When Bill Gates, a Harvard University dropout student established Microsoft in 1975 in a small hotel room in New Mexico, there was ample uncertainty about the sustainability of the business. After the launch of Windows® in the mid 1980s, the company enjoyed nearly monopoly in the operating system business. In 2000, Microsoft entered the mobile operating software market with the launch of Pocket PC 2000. The year 2003 saw radical change, while Microsoft launched their mobile handset Operating system under the name ‘Microsoft Windows Mobile’. The strategic alliance with Nokia was formed in 2011 to deal with the lack of success factor of their mobile phone operating system market. The global smart phone market expanded rapidly in the mid to late 2000s. In spite of having high potential in the market, Microsoft was unable to cash this growing market. The market share of Google’s operating system Android, Apple’s iOS, and Research In Motion’s (RIM) Blackberry OS in the Smartphone market increased the expense of Microsoft’s Windows phones. Company background of Nokia Nokia, a Finnish telecommunication and information technology multinational, provides telecommunication network equipment and services to the end users. Apart from these main functions, the company is also responsible in providing internet applications, applications, games, and music and media components to the handset devices. Once termed as the undisputed king of mobile handset industry, Nokia has experienced its downfall in sales during early 2004s, when Apple introduced their innovative Smartphone iPhone. Apple’s iPhone was a milestone of mobile technological innovation. Lack of applications in Nokia’s symbian based handsets result in customer dissatisfaction towards their products. After 2011, symbian product line was officially stopped and Nokia started to concentrate fully on using windows phone operating system in their smart phones. The strategic alliance was based on the agreement that Nokia would use its hardware design, language support capabilities and widespread global reach to develop and distribute Windows phone based Smart phones at various prices. The marketing initiatives will be joint approach recommended by the experts of the company. Nokia’s launch of new Smartphone, Nokia Lumia, helped them to regain their dipped market share a bit (Mobile Technology Report, n.d.). External Analysis External Analysis of a firm comprises of the analysis of the macro environment in which the company is operating. External Analysis is often considered as the environmental model to gain competitive advantage. This can be explained in terms of environmental analysis (PESTEL framework), competitor analysis (Porter’s five forces model) and Industry Life Cycle models. These are the opportunities and threats of the organization in doing the business and can be simultaneously analyzed to find the attractiveness of the business. The external analysis of these two companies can help in deducing their respective opportunities and threats existing in the market place. PESTEL Analysis PESTEL is a globally used macro environmental framework to analyze the political, economical, social, technological, legal and environmental factors affecting a business scenario. This simple but widely used strategic tool gives an overview of the different macro economic factors the firm has to take into consideration. PESTEL Analysis of Microsoft Political factors In USA, after the post recession period, there is a strict restriction on foreign recruitments in their home companies. Microsoft is also subjected to this restriction. There are certain regulations on the industrial norms and regulations in USA. Some laws are quite different from foreign countries which can result in difficulties while going outside the home country’s boundaries. Economic factors Fluctuations and unpredictable behaviors of foreign currency makes the company’s market potential volatile. Disposable income of the stakeholders, especially the end customers, is a key economic factor. Economic growth rates around the world. Demand and supply conditions of own products and competitor’s products. Tax, tariffs and non tariff import-export barriers while going global. Social factors Widespread accessibility of technology to different people of different capabilities. Change in demographic factors, such as age of population. Technological factors Technological up gradation, development and leapfrogging, especially in computer and mobile handset operating systems. Environmental factors Energy saving proposals Development of Green IT concept. Legal factors Laws against monopoly and forced competitor acquisitions are key business regulations present in legal factors. Intellectual property rights. PESTEL Analysis of Nokia Political factors Government rules and regulations on business practices. Health, safety and welfare regulations of the foreign government. Political instability in the foreign markets. Economic Factors Changes in exchange rates in a global scale. Change in interest rates of banks due to recession on western economy. Inflation Social factors Culture and subculture of the society, especially the fashion changes in technological usage by the customers. Increasing trend in Smartphone usage. Technological factors Technological up gradation, development and leapfrogging, especially in computer and mobile handset devices. Innovation in Smartphone segment. Environmental factors Encouragement towards environment friendly and eco friendly technologies. Mobile phone recycling Legal factors Intellectual Property Rights. Trademarks, copyrights on operating systems. Employment laws, safety in workplace regulations etc. Porter’s Five Forces analysis Five Forces Diagram for Microsoft Threat of new entrants – Low The diversified way and the large scale of operations through which Microsoft operates make a big entry barrier to the new entrants entering the marketplace. Microsoft believes in creating successful coherent network by integrating people and building partnerships with big houses. Threat of substitutes – Low The broader range of product offerings essential for running user friendly computer applications makes Microsoft almost invincible in the midst of many product substitutes. The cross platform limitations of the softwares served by different organizations not only limited the support for competitors, but also result in lowering threat of substitute products. Bargaining power of buyers – Low The innovative approach undertaken by Microsoft has always been successful in delivering unique values and features to the customers. On the other hand, customers find no close substitutes. Bargaining power of suppliers – Low Microsoft has a well-established customer profile which none of their suppliers have. They have enough prospective suppliers across the world and thus, one single supplier cannot exert power over them. Inter-firm rivalry – Moderate Microsoft products are subjected to competition which is, indeed, quite a natural incident. But the scale of operation in which Microsoft operates, and the dependability on the customers that they maintain, makes them successfully check the inter-firm rivalry in a moderate level (Porter, 1979). Five Forces Diagram for Nokia Threat of new entrants – Low The Smartphone business requires high capital investments for innovation and high sunk costs. The high investment and costs can discourage the new entrants. Also, there is a preference of the customers towards the well-established brands (like Nokia) over the newly launched ones, which results in reducing the threat of new entrants. Threat of substitutes – Low Threat of substitutes is low in the Smartphone industry. There is no substitute of smart phones, and if there is a chance of introducing any substitutes, the cost associated is very high. Bargaining power of buyers – Low The presence of large number of buyers makes the bargaining power of the buyers low. Bargaining power of suppliers – Low The power of suppliers is low because of high competition between suppliers and availability of substitute inputs. Inter-firm rivalry – High Smartphone is a highly perishable product. Because of the perishable nature of the product, it needs to be sold fast, which results in drastic price reduction principles of the companies. The direct consequence of this is high inter-firm rivalry (Marian, 2013, p.14). Industry Life-Cycle Analysis This type of fundamental analysis involves in the process of making investment decisions based on the different through which an industry is passing at a given time. Firm specific characteristics and the stages of the industry life cycle have direct result on company’s position in the outer marketplace. The industry life cycle analysis of Microsoft and Nokia is explained below: Stages in Industry Life Cycle Microsoft Nokia Start-Up Windows for mobile handsets Newly updated Nokia Lumia Smart phones with updated windows is the start up product Consolidation Updated Microsoft platforms for computer and mobile handset users. Nokia Lumia and Asha Phone series, which is targeted towards the economy class segment. Maturity Windows operating system Nokia Classic series, mobile handsets. Relative Decline Previous generation windows OS and mobile handsets. N series and symbian based Mobile handsets. From the external analysis the relative opportunities and threats of these two organizations can be tabulated below: Microsoft Nokia Opportunities Growing demand for smart phones. Growth potential in cloud service market with its offerings in cloud computing and managed IT solutions. Strategic Acquisitions and possibilities of partnerships and collaborations with different companies. High growth rate of mobile handset market. Partnership with Microsoft can create substantial advantage in Smartphone market. Developing and undeveloped countries have tremendous growth potential. Threats Foreign currency exchange rate volatility. High competition in software markets. Fluctuating demand with respect to customers’ choices and preferences. Highly Competitive Environment and chance in technology. Complicacy in consumer’s choices and preferences while choosing the handset. Varieties of different products from competitors build on the basis of latest operating system (like android) have resulted in providing different alternatives to the consumers. Changing Global market trend. Internal Analysis Internal analysis is nothing but the analysis of company’s internal environment and the resources and capabilities the company possesses. Different models like Competency Framework, VRIN Framework and Porter’s value chain model can be used to analyze the internal environment of an organization. Competency Framework A competency framework is a model that broadly explains the plan that lead to quality work performance in an industry. The framework gives a general overview of the resources and capabilities of the enterprise that can lead to sustainable competitive advantage. Competitive Framework of Microsoft Resources Competencies Threshold Capabilities Threshold Resources Threshold Competencies Well established infrastructure. Properly managed network. Sound financial backbone. Experience of employees and their expertise. Capable of developing software packages at a lower price, this can lead to cost leadership condition. Ability to market the product as well as invent new ones with Research and development. Ability to manage proper human resources which can lead to improved customer experience. Capabilities for Competitive Advantage Unique resources Core Competencies Intellectual capital. Strong brand image and reputation. Dependent and reliable customer base. Innovation capabilities. Marketing efficiency. Competitive Framework of Nokia Resources Competencies Threshold Capabilities Threshold Resources Threshold Competencies Well established infrastructure. Sound financial backbone. Experience of employees and their expertise. Proper raw material inputs that can increase the durability of the handsets. Capable of developing low price durable products. Ability to market the product as well as invent new ones with proper funding in Research and development. Capabilities for Competitive Advantage Unique resources Core Competencies Advantage of intellectual capital. Strong brand image and reputation. Loyal customer segment. Investment capabilities in innovation and research & development. VRIN Framework This framework is also known as the Resource Based View of any organization. Resource based view focuses on the concept that in order to stand in an advantageous position compared to other competitors working in the foreign marketplace, the company must leverage its specific intangible resources to build capabilities that can serve as a sustainable competitive advantage (Barney, 1991, pp. 99-120). This framework emphasizes the basic strategic statement of a firm that begins with the vision statement, continues on through objectives, internal and external analysis, strategic choices and strategic implementation. VRIN Framework of Microsoft Valuable: Microsoft offers more value to their customers by many innovative features in its software and firmware packages. End users can rely on the durability and reliability of Microsoft products. Capabilities in investing in R&D have successfully helped them come up with unique features in their product offerings. Their offerings are perceived unique and more valuable to the end users due to this reason. Rarity: Microsoft offers software with unique features in the form of Graphical user interface. Microsoft has the basic framework that can incapable them to undergo continuous improvement process. Mass Customization and flexibility in the product offerings makes Microsoft’s resources rare in the industry. Inimitability: Microsoft has the intellectual capabilities to introduce innovative products in a continuous manner. They have a large loyal customer base which shows full dependency on Microsoft. The standardized feature of their products along with the abovementioned nature of resources makes them inimitable. Non-substitutability: In the operating system market, Microsoft’s Windows is the undisputed king. The lack of platform support of the software and limitations in applications positions other operating system always to the second position. But in case of mobile handset market, Google’s Android OS has become a clear substitute of windows operating systems. More cross platform support in android has made Microsoft Mobile Windows substitutable. VRIN Framework of Nokia Valuable: In case of Nokia, the resources are their handset manufacturing technologies, especially with their own operating system, which is perceived to be uninteresting to the end users. Lack of differentiation in their product is a major concern for their mobile handsets. Consumers are already familiar with using touch screen android phones, and their response is quite high. Rarity: Nokia has their technological uniqueness in their mobile phones in the form of quality battery, durability of their phone and the relevancy. When technological leapfrogging in terms of smart phones occurs, Nokia failed to customize these resources. Their one time competitors, like Samsung exploited this opportunity to invade the market and started strategic collaboration with other global giants for necessary technological up gradation. As a result of it, Nokia’s resources lost its rarity and the firm pushes to the point of competitive disadvantage. Inimitability: When Nokia introduced their technologically upgraded phones like the N- Series and E-Series, competitors could not imitate this advantage. But as technology changes, competitors have introduced new phones that can be a direct substitute of old Nokia phones and eventually the once perceived as costly to imitate resources become out dated (Klingebiel, 2013). Non-substitutability: Imminent threats of substitutes have forced Nokia to introduce something unique of their own. But the newly introduced devices were not felt satisfactory to the changed customer base. They also tried to focus more on retail and digital marketing with product variety, but it didn’t help them to resist their declining market share (Arthur, 2011). Based on the two abovementioned frameworks, the internal strengths and weaknesses of the two companies can be tabulated: Microsoft Nokia Strengths Wide Product Portfolio. Sound financial backbone due to consistent increase in revenue. Strong Intellectual Property. Research and Development Capabilities. Easy to use software. Largest distributor of mobile phones in the market. Positive brand image of Nokia regarding the durability issues of their handsets. User friendly interface. Weaknesses Constant decline in brand equity growth, which could affect its brand reputation and image. Poor acquisitions and unsuccessful investments. Over dependency on hardware manufacturers. Slow innovation rate. Lack of product differentiation. Lack of product offerings consistent with changed customer needs. Nokia & Microsoft Pre-alliance Many mobile industry biological community accomplices have battled in this industry because of the fast changing nature of the business and the new plans of action presented by organizations like Google, which have dissolved terrible edges. Case for discussion is the strategic alliance between Microsoft and Nokia. Before entering the vital cooperation with Microsoft, Nokia was confronting a few tests and it was losing a lot of market share in the overall industry in the wake of ruling the mobile business a couple of years back. A key helping component of this pattern was Nokias hierarchical structure, huge overhead and slow response to shopper patterns. While Nokia was present in more than 150 nations, most vital and official choices were still made at the corporate level in Finland. Nokia always focused on coming up with products which are updated to the global trend, however in the midst of doing so, they could not always correctly predict the trends and lifestyles of the local market. For example, Indian buyers were extremely intrigued by PDAs that permitted the client to utilize double SIM cards. Nokias rivals started offering phones with this proficiency; however Nokia was slow to react. As stated by a Nokia senior official: “The Indian team was screaming for dual SIM phones, but either they did not scream loud enough or they weren’t heard." (Goyal and Jaiswal, 2010) From a prevailing Indian piece of the overall industry of 59% in 2005, Nokia tumbled to 33% of the PDA showcase in 2010. Microsoft was not improving any. After the disappointment of the 6.5 form of their Windows Phone OS, Microsoft needed to redesign its approach to contend to Googles prevalent and less expensive advertising. While Microsoft could quit losing piece of the overall industry with the arrival of Windows Phone 7, this stage is still authorized to their OEM accomplices through an eminence model, is offered just through a subset of the key worldwide bearers and does not have offer numerous requisitions. A key quality that Microsoft had is their worldwide subsidiaries and advancement groups and how they were utilizing their brand difference to contract neighbourhood, gifted people in these businesses. For instance, the Microsoft India Development Centre could select the top designing graduates from Indias chief colleges to create programming utilized within numerous Microsoft items. In the course of the most recent five years, the Microsoft India Development Centre has been granted in excess of 270 licenses, which has raised the subsidiary to vital status around Microsofts worldwide subsidiaries. Issues and Challenges in the Company The Microsoft and Nokia alliance as discussed above was a famous alliance and has been in discussion for a long time. Both the companies joined their hands for a better future but unfortunately things were not happening correctly. The main idea was to compete in the Smartphone market. Microsoft was struggling with their windows operating system in the smart phone segment while Nokia had dipping sales because of it outdated Symbian Operating system compared to Google’s android and Apple’s ios. Nokia was always known for their quality of phones and Microsoft was the software giant (Tjemkes and Vos et al., 2012). The combination of two meant that they would deliver a high quality smart phone with a brilliant operating system. The result was Nokia came up with their range of Lumia phones which featured their windows mobile 7.5 operating system. Initially there was hype for these phones as they had a completely new interface, in fact the best interface in the mobile operating system. The new windows platform was easy to operate and extremely fast compared to Apple’s ios and Google’s Android. Microsoft also added their famous Xbox gaming feature in their operating systems to make these smart phones more entertaining. However there was one problem that cropped up gradually. With the launch of windows phone 7.5, they came up with their application market known as ‘marketplace’ like apple’s ‘apps store’ and android’s ‘play store’. The problem here was the limited availability of applications compared to the other operating systems. The developers were not willing to make applications for the windows mobile and most of the famous applications and games like (temple run) were not free to download. The reason for lack of interest for developers might have been due to limited customization for windows phone mobile as it was a closed operating system similar to Apple’s ios. This came as a problem for both of the companies. There were other problems like the lack of Bluetooth file sharing or expandable memory. Strategic Options for Microsoft and Nokia Now let us look into the both the companies without their strategic alliance. In the case if both of them had not come into an agreement, what strategic ideas could have been implemented by them to compete in the mobile platform? Let us start with Microsoft. In case of Microsoft the following strategic decisions could have been implemented. Giving developers the opportunity to modify - one problem that has been consistent with windows mobile is lack of applications. Developers are somehow not readily interested to come with applications for windows mobile as they do in the case of android and ios. One reason for that is Microsoft has kept their platform closed. In other words, windows phone mobile is a closed platform operating system which does not allow any kinds of customization. Microsoft in this case can tweak their operating systems and make it available openly for the developers. The developers are constantly aware of the latest customization which will interest the consumers. Once they tweak the OS, Microsoft can rebuild their user interface with the help of these developers and come up with an interesting operating system which will attract the consumers. Once the consumers are attracted to it, automatically the smart phones manufacturers will look forward to putting windows operating system into their mobiles. Apart from that, developers will also help in bringing in vast number of application which was not readily available earlier. Development of Microsoft Smartphone – Once they have successfully implemented the above strategy they can even think of coming up with their own range of smart phone like Apple. Apart from letting other mobile phone manufacturers use windows platform, their own range of Smartphone can be quite appealing especially when they will be offering exclusive features to their own Smart phones like Google does with their own range of smart phones and tablets known as ‘Nexus’. Now let us look into the case of Nokia. Nokia phones with android - Nokia was a market leader in the range of smart phone until 2007. The reason for their downfall was the emergence of Google’s open source operating system ‘Android’ which was offered for free to the developers and mobile phone manufacturers. Nokia still kept on pushing their symbian operating system with little or no success. Instead of doing that, they could have utilized the idea of coming up with a smart phone having android operating system. Nokia was already known for their quality of handsets. They could have taken the advantage of their quality and put the most used operating system in order to create a new lease of hope for themselves. The consumers were very keen on the idea of Nokia coming up with their own range of android phones. Nokia instead came up with their windows based windows phone which could not change the game for them. Capitalising on their mid range handsets – Another good way to survive for Nokia could have been to offer mid range handsets. They kept on coming up with high price smart phone but could achieve a good sales figure; however they had a good market of the lower range of phones purely because of the quality. Nokia could have capitalized on their strengths and offered mid priced smart phones to attract the consumers. Ansoff’s Matrix Further into the discussion of the above strategic options, let look into both the companies from Ansoff’s Matrix point of view (Valuebasedmanagement.net, n.d.). Diversification – Microsoft’s idea of coming up with their own range of smart phone can be put into the category of diversification as they would be venturing into this market with a product of their own. Earlier they were only offering their windows operating system to other smart phone manufacturers. Penetration – Nokia would be penetrating the market of android smart phones if they came up with their own range of android based smart phones. This would help them in tapping a new market and attracting a whole new set of consumers. Benefits of the Alliance 1. Consolidated: Both organizations will have the capacity to expand their focused chances against industry pioneers (RIM, Apple & Google) and new contestants (HP) while expanding their influence with their portable quality chain accomplices – gadget producers, provisions engineers, administrations suppliers and system specialists. Moreover, it is normal that they will have the capacity to power their brand portfolio (Windows, Office, Bing, Xbox, NAVTEQ and Nokia) to make showcasing collaborations and in the end, diminish costs. 2. Nokia: By supplanting its antiquated Symbian OS stage with Windows Phone 7 in their smart phone offerings, Nokia will have the capacity to fundamentally cut their R&D expenses, rebuild their association and access key Microsofts advantages (seek worldwide promotion, benefit, advancement, cloud and commercial centre). Moreover, Nokia will have the right to adjust Microsofts OS, will get money related help (evaluated in a huge number of dollars) to reduce the expenses and dangers connected with the move and could create incremental income from pursuit and notice referral understandings. Last, Nokia will get access to Microsofts promoting base in the US which could permit them to recapture piece of the pie in this paramount business sector. 3. Microsoft: Once the move is actualized, Microsoft will get access to Nokias worldwide vicinity and dispersion channels, will profit from Nokias fittings mastery for future adaptations of the OS, and will accept incremental income from Wp7 sovereignties. Deliberately, this organization will permit Microsoft to recover highly required worldwide piece of the overall industry (at both top and lowest part closures of the business), to decrease the pace of the Google stage extension and to get to extra geologies where Nokia has neighbourhood abilities and accomplices. Ultimately, the coordination of Nokias licensed innovation (Navteq) with Microsofts items and the increment in designer appropriation could profit the advancement of future items. 4. Shoppers: Customers will profit from the association by having strong contender in the smart phone market like (Blackberry, Android & Apple). They will additionally get access to Microsofts gainfulness offerings (Office, Business Communications, SharePoint and Exchange Activesync) through extra stages and gadgets empowering more administrations for them (IM, VoIP, and so on.). Ultimately, they will profit from the joining of the gadget, OS, administrations, requisitions and help, which will lessen fetches and enhance their general experience. Nokia said 2011 and 2012 might be the time during which Symbian will slowly be eliminated, and it wont be until 2012 that an expansive number of Nokia Windows phones will dispatch. That appears to be past the point of no return. By 2012, Apple and Google will most likely be dispatching gadgets with considerably more capable processors and characteristics than the phones were acquainted with today. Recommendations Faster Shipping - On the off chance that Nokia and Microsoft would like to make up for lost time, they need to ship sooner. "They need to ship," Gartenberg said. "That is what it’s all going to descend to. The business sector is moving at such a rate and pace, to the point that theyve got to execute against this, rapidly." Separate Not just do Microsoft and Nokia need to ship quick, they need to ship a constraining item that emerges from whatever remains of the phones authorizing Windows Phone 7, alongside the gigantic product of Android gadgets, also Apples iphone. Makers shipping Android gadgets keep on making their equipment emerge with husky characteristics, for example, double centre processors and even double screens. Theyll most likely bring to the table a few equipment varieties — something Nokias really great at — and Windows Phone 7 needs some selective executioner applications. Encourage Developers In the previous week, numerous Symbian programmers and fans have communicated shock over the switch to Windows. Its similar to their reality has gone into disrepair, and they feel sold out. "That is it! Following 15 years utilizing Nokia now is the right time to proceed onward," a commentator posted on The Nokia Blog. "I will strive for Android. Sorry Nokia, it is my long- and fleeting system from now on. I dont accept one single expressions of what Nokia says any longer." That is bad: the Nokia designer group was instrumental to Nokias initial victory. Nokia and Microsoft will need to push each exertion to hold and enlisted person programmers to make applications for the Nokia Windows Phone stage. They have to treat programmers like divine beings. Its a great sign as of recently that Microsoft has been greatly genial with Windows Phone 7 engineers, giving them free phones and even shirts at whatever point they get included. They ought to stretch out that exertion to Symbian and Nokia developers as well. Conclusion The alliance between Microsoft and Nokia was done with a purpose to bring up both the companies in the smart phone industry. However both of the companies faced a lot of issues that has been discussed and could come up with a ground breaking product or a strategy to get back into the market and compete. The strategic options discussed could have helped both the companies to survive in the smart phone market. However these are not the solution to their present problems. The ideas discussed at the end of the report can help Microsoft and Nokia to strategically build up their windows phone platform and offer a smart phone that will be acknowledged by everyone. References Arthur, C., 2011. Business Technology sector Nokias new Smartphone strategy fails to impress market watchers. [Online]. Available at: http://www.theguardian.com/business/2011/jun/12/nokia-windows-mobile-phones. [Accessed On April 9, 2014]. Barney, J., 1991. “Firm Resources and Sustained Competitive Advantage”. Journal of Management. Vol.17, No.1. Goyal, M. and Jaiswal, K. 2010. How Nokia fell from dominance and got pinned down by competitors. [online] Available at: http://articles.economictimes.indiatimes.com/2011-03-27/news/29194836_1_nokia-india-ceo-stephen-elop-nokia-c7 [Accessed: 9 Apr 2014]. Klingebiel, R., 2013. The right deal for Nokia, but the wrong deal for Microsoft? What the $7.1bn deal really means. [Online]. Available at: http://www.thedrum.com/opinion/2013/09/03/right-deal-nokia-wrong-deal-microsoft-what-71bn-deal-really-means. [Accessed On April 9, 2014]. Marian, L., 2013. Is Nokia’s performance in the Smartphone market affected negatively by marketing strategy decisions? Department of Business Administration. Aarhus School of Business and Social Sciences. Mobile Technology Report. No Date. The history of Nokia. [Online]. Available at: http://www.mobiletechnologyreport.com/the-knowledge/the-history-of-nokia/. [Accessed on April 9, 2014]. Porter, M. E., 1979. How Competitive Forces Shape Strategy. Harvard Business Review. Thurrott, P., 2011. Nokia + Microsoft: An Analysis of the Strategic Alliance. [Online]. Available at: http://winsupersite.com/article/windows-phone-7/nokia-microsoft-an-analysis-of-the-strategic-alliance. [Accessed on April 9, 2014]. Tjemkes, B., Vos, P. and Burgers, K. 2012. Strategic alliance management. Abingdon, Oxon: Routledge. Valuebasedmanagement.net. n.d. Summary of Product/Market Grid by Ansoff. Abstract. [online] Available at: http://www.valuebasedmanagement.net/methods_productmarketgrid.html [Accessed: 9 Apr 2014]. Read More