Strategic Management of Telecommunication Organizations - Coursework Example

Strategic Management of Telecommunication Organizations Introduction Nokia Company is the largest mobile phone manufacturer in theworld. The company is spread in more than a hundred and fifty states of the world and has an employee capacity of more than sixty five thousand. Its mobile phone manufacturing history can be traced way back to 1980s when the company became popular for mobile phone devices it had launched in the European market (Husso, 2011 p. 5). The company eventually established its products in the global market and became the largest distributor of mobile phone devices by 1990s (Aspara et.al, 2011 p. 12). The company has today expanded its operations to all parts of the world but not without facing stiff competition from other mobile phone manufacturers such as Samsung and Apple companies. Samsung Company was established in 1960s and is originally a Korean company. It is a global corporation that not only specializes in sale of handsets but also other gadgets and appliances such as televisions and flat screens. Samsung company products are quite popular in the global market and it has established itself as one of the best mobile phone manufacturers of the world today (Lee, 2010, p. 3). Samsung Company was not initially a mobile phone manufacturer. It was initially a television manufacturer. As the time passed by, the company decided to venture into production of mobile phone devices and personal computers following its growth of technology. This was a breakthrough for the company since the launch of mobile phone devices and personal computers were quite a success in the global market earning the company quite a good reputation as well as enormous revenue from sale of mobile devices and the other gadgets (Lee, 2010, p. 3-4). The company has today been ranked as the second largest mobile phone manufacturer of the world after the Nokia Company. Both Samsung and Nokia are known for being the best handset sellers in the world today. The two companies have specialized in production of world-class mobile phone devices that have transformed the world business for their role in the global trade. Mobile phones today are not only capable of accessing the internet but can as well send and receive emails. In the past few years, both Samsung and Nokia Companies have faced stiff competition in this sector from rival firms such as the Apple Company that has in the recent past become quite a promising mobile phone manufacturer in the world market. Both Samsung and Nokia companies have at times found themselves in the corridors of justice as a result of legal disputes with some other rivalry firms in the mobile phone manufacturing sector. An example of such legal disputes is the case of Samsung Vs. Apple Company of 2012 where Samsung had been sued by Apple Company for their imitation of the Apple mobile devices. Following the advancement in technology, the mobile phone manufacturers have to keep on reshaping their products to stay relevant and competitive in the market. So as to stay competitive, both Samsung and Nokia companies have in the recent past embarked on developing and implementing different strategies aimed at making sure that they continue excelling in the mobile manufacturing industry. Bowman’s Strategy Clock. Bowman’s strategy clock refers to representations in diagram forms of the options that are strategic that businesses poses so that they could move in the value map. It represents the relationship between a particular price that the customer is willing to pay and the perceived the value that is perceived by the customer available from the market structure. The customer value map plays a very important role in the bowman’s strategy clock (Aspara et al 2011 p. 100) The respective positioning of the competitors that are in the market is exposed by the customer value map. For instance in some market the customers perceive that expensive goods has a higher perceived customer value which hence compensate for the higher prices. In markets a fair value is created since competitors are scattered from prices if higher value to prices of lower value. They are also aligned in respect to the combinations of the attributes of customer value which provides amore perceived value for customer that are specific (Gupta, A. 2013, p. 16) The bowman’s strategy clock has eight potential moves that it requires to be covered by it. 1. Moving West - This is done reducing the price, this strategy places the business in apposition that is strong due to the fact that it is over and above the old money value. This offers added advantages over other competitors. This system is risky since reduction of prices may lead to war due to prices whose share in the losses. 2. Moving North - When the customer value is added and increasing the customer value. This is achieved by the use of signaling and market communication. This places the business a value higher than the older value for money and make the product to appear appealing. Competitive advantage is retained for longer time since the customer added value 3. Move East - This mainly achieved by increasing their prices. This poses a greater disadvantage due to the escalated prices unless the competitors fool the same pricing leads, which allows the prices of the companies to rise up. This only occurs when the customers are receiving much more use value than the prices. 4. Moving South - This is achieved by reducing the customer value. It’s risky since it is competitively disadvantaged since one moves away from the value of money. A number of business have always cut cost which has always had a negative influence on customers, leading to vicious circle of needing lower value prices for the purpose of making looks competitive. 5. Moving South West - This movement is facilitated by reducing the prices and value of commodities. It moves along the value for the line of money to discount for the position of the product. In any case the price already at the market become constrained due to external pressures such as recession, the a policy that deliberate the value to take the costs out of the product so that it meets lower price takes effect. 6. Moving North East – The strategy is attained by increasing the prices and the value of the products. The move is based along the value for line of money to attain a premium position of price in conditions where such a gap exist in the market. Its main challenge comes in such a way that as one moves along the value for the line of money, one moves into different segments of the customer where the customers underlying attribute of value changes (Lawan et al 2013 p. 50) 7. Moving South East – The move is attained by reducing the value and increasing prices. This strategy may lead to commercial suicide since the product which is now of low value and higher price rapidly deteriorates and becomes uncompetitive. It is mainly applied where intends to withdraw the product from the market and invest using the profit and cash obtained. On some circumstances due to customer inertia, products of lower value still have higher demand. This does not auger well with the long term customer relationship since the supplier abuses the implied trust of fair treatment to the customer. 8. Moving North West – Achieved by increasing the value and reducing the price. This the only move which offers a guarantee of delivering an increased market share. It offers a very aggressive and competitive move and force the competitors ’to quickly react and sets the lowest cost position. This will make companies incur extra costs to keep long term market share (Lawan et al 2013, p. 56) The bowman’s strategy clock enables one to move their business by considering a competitive response. Strategic plans with aggressive growth plan is always observed with forecasts that do not consider competitors and how they would react. Both the Nokia and Samsung companies taken various paths in the bowman’s strategic clock. Nokia Company has moved North West, it increases the value of its products while reducing their prices. On invention of new products the new products are always of higher value due to modification. For instance their mobile handsets are able not only to access internet but also to send and receive emails. The prices which were higher has always reduced at constant price affordable to most customers. This has guaranteed a constant market share and has a long term benefit for the company (Gupta 2013, p. 16) Sumsang Company has followed the same suit, but has also taken the North East way. They diversified from manufacturing only television sets to the mobile handsets. Hence increasing their value and consequently their price. This has enabled them to move to different segment of the customer due to the increased market and change in perception of the value of goods. In response to the market f lower incomes both the Nokia and Sumsang company has reduced both the value and prices of certain products. This is to enable the customers to get access to specific common service (Dlabay et al 2011 p. 97). The bowman’s strategic clock has failed to clearly outline achievable hybrid low cost positions that it claims is achievable in the generic strategies. It also leads to negative thinking and justifies doing nothing. McKinsey’s 7s framework It was developed by Waterman and Peters and has today become one of the most important business models that most organizations of the world are using to assess as well as monitor their internal environments. The model requires that for any given organization to adequately perform in the market, the issues of skills, strategy, structure, shared values, style, staff and system have to be well integrated and properly aligned (Waterman et.al, n.d, p. 14-16). Therefore this model is usually used by different companies of the world to ascertain what need to be adjusted or realigned to ensure that the company continues to perform well in the market regardless changes it is experiencing. According to the model, vital changes that are likely to be experienced in a firm include change in management, integration of a new system, merging or takeovers as well as introduction of new processes. Strategy, structure and systems of an organization in this case have been grouped as the hard elements in an organization whereas the shared values, style, staff and skills are soft elements of an organization. This model can be used in both cases of the Nokia and Samsung Companies in the mobile phone industry. Strategy is that plan that is developed by a company to achieve its objectives (Johnson, 2006, p. 21). The objective of both Nokia and Samsung Companies is to maximize profits. Both firms in the recent past have engaged in research and development projects aimed at coming up with better designs of mobile phones. Hierarchical structures of a firm are quite important to any given firm since it defines the distance between the management and the workers. Companies can have long structures or shorter structures. Long structures have in the past been criticized as being unresponsive to changes hence inflexible (Dlabay et al, 2011, p. 7). Nokia and Samsung companies have in the past continued to address the issue of proper structuring of the organizations for continued success in the mobile phone market. Systems in a company adequately relates to procedures and the different processes an organization uses to conduct its day to day business activities. This entails systems such as financial systems, production systems and even information systems. For successful development of better phone handsets both Samsung and Nokia needs to integrate better HR systems adequate for better selection and recruitment of employees. This would therefore make sure that these companies make use of the best talents in the market. Shared values have recently been viewed by different scholars of the world as key to the well being of any particular firm. Both Samsung and Nokia have values I can describe as effective for the two companies have continued to attract the better talents in the market. Style has been described by different scholars as the actions undertaken by the top level management and viewed by the employees as guidance to everything they do. Style is closely related to culture of an organization. In both cases of Nokia and Samsung, the style can be described as adequate and this has made the two companies continue doing well in the market for the style of leadership in the two companies has resulted into creation of employees who are respectful and trustworthy. Staff basically refers to the different employees of a company. There is always need to continue developing employees of the company through training and proper motivation. Employees of Nokia and Samsung frequently attend workshops and seminars aimed at developing and expanding their knowledge. The two companies have good rewarding systems in place aimed at rewarding the best employees in the company hence motivating them. Skills are the capabilities and competency of the employees. This is what has been regularly developed by the different seminars and workshops undertaken by employees of both Nokia and Samsung companies. Porter’s Diamond Strategies The model was developed by Michael Porter. It has been used by different business analysts to explain the advantage some nations have over the others as a result of some factors they have. The model can therefore be used by different companies in analyzing the global market since it seeks to explain why some regions of the world or some nations of the world have an advantage over the others. The model therefore seeks to establish a more comprehensive approach when considering factors such as the strategy, structure and competition of the firm, demand for its products, the supporting industries and factor condition of the firm. This model further ascertain the fact that a country can be competitive with or without natural resources and further defines the role of the government as to encourage and help different companies to get to even higher competitive levels. According to the model, the world has dynamic conditions and the different firms become more innovative and productive as a result of the direct competition. This can be evident in our case of Nokia and Samsung companies. In the recent few years, the mobile manufacturing industry has witnessed an influx of new players such as Apple Company who have intensified competition in the industry. The increased demand for more sophisticated mobile phone devices by different individuals of the world has further made both Samsung and Nokia companies to further commit a lot of their resources in research and development. This is aimed at adequately developing newer designs geared towards serving various customers demands. Supporting industries in to the phone manufacturing industry include the computer industry. It happens that Samsung Company operates in both phone manufacturing and computer industries. This has highly helped Samsung company mainly with continuous flow of new ideas and varied innovations. Nokia on the other hand has also borrowed a lot of ideas and innovation from the computer manufacturing industry. There are also key factors to production for any given organization of the world. In a recent survey by several scholars of the world, factors of production such as skilled labor are created by the company and not inherited by any means. These factors have today become the most crucial source of a competitive advantage to the different firms of the world since they are the only resources in a firm that are hard to be duplicated by the competitors. In this case, both the Nokia and Samsung Companies have specialized factors and that is the reason why the two have continued to dominate the mobile phone industry of the world. The two are also very famous with quality products a factor that have seem the two companies do even better than their rival firms in the mobile manufacturing industry. Bibliography Aspara, J, Lamberg, J, Laukia, A and Tikkanen, H. (2011). Strategic Management of Business Model Transformation: Lessons from Nokia. Journal of Management Decision, 49(4), pp. 622-647. Dlabay, L, Burrow, J., and Kleindl, B. 2011. Principles of Business. Boston, MA: Cengage Learning. Husso, M. 2011. Analysis of Competition in the Mobile Phone Markets of the United State and Europe. [Pdf]. Available at [Accessed 10 November, 2014]. Gupta, A. 2013. Environmental and pest analysis: An approach to external business environment. Merit Research Journal of Art, Social Science and Humanities, 1(2), pp. 13-17. Johnson, K., and Whittington. R, 2006. Exploring corporate strategy. Upper Saddle River, N.J Prentice hall. Lawan, A.& Zanna, R. 2013. Evaluation of Socio-Cultural Factors Influencing Consumer Buying Behaviour of Clothes in Borno State, Nigeria. International Journal of Basic and Applied Science, 1(3), pp. 519-529. Lee, Boon-Young. n.d. Case Study of Samsung’s Mobile Phone Business. [Pdf]. Available at [Accessed 10 November, 2014]. Lee, Y-I., and P.R.J. Trim. 2008. Strategic Marketing Decision-Making in Japanese and South Korean Companies. Oxford: Chandos Publishing. Waterman, H., Peters, J. & Phillips, R. n.d. Structure is not organization.[Pdf]. Available at [Accessed 10 November, 2014]. Read More