Corporate and Marketing Strategy of Nokia Company - Assignment Example

Nokia: Corporate & Marketing Strategy Owners, shareholders and managers of most big brands of consumer goods have to stay on their toes in the fiercely competitive world today. With players in the international markets competing to outdo each other, nothing can be left to chance and loopholes if any have to be plugged immediately and effectively. Nokia is one of the most famous cell phone brands in the world today and has established a niche in this sector which has an enviable record. Basically Nokia is a Finnish company which is the world leader, at present, in wireless communications and is best known for its mobile devices (bx.businessweek.com). There are many competitors like Motorola, Ericsson, LG, Samsung, etc. but the Nokia brand still stands tall as it accounts for 37% of the total global mobile phone sales (Ewing, 2009). Therefore the main corporate strategy of Nokia is to maintain this status and even increase it further. However, the success of rival company Apple’s I-Phone has made a huge dent in Nokia’s sale of smartphones which offer the consumer the facility to undertake multitasking in a mini pc sort of framework. The first quarterly results of the company released on April 16 in 2009 show that sales fell 27% form the year earlier quarter and the average selling price for the company’s portfolio of mobile phones, which is an indicator of consumer demand, fell from $ 94 million to $ 86 million at the year end in 2008 (Ewing, 2009). However this decline was countered by the increasing sales figures in the international market with China being the top consumer for Nokia handsets. Nokia’s business portfolio is thus mainly focused on increasing the sales of its mobile phones and other innovative devices with which it aims to capture the future market and take away the market share from Apple and blackberry brands. As a short term measure, although the company suffered due to the lesser sales figures for its smartphones, the company launched Nokia 5800 Xpress Music and Nokia N97 models which had touchscreen functions and helped the company achieve impressive sales figures of 2.6 million units (Ewing, 2009). Nokia now nurtures the ambition of entering the lucrative market of netbooks and mobile banking through the launch of new products but still has a weak presence in this sector in the US as the I-Phone and RIM Blackberry are feature rich and hard to emulate. But Nokia cannot be relegated to a lower spot due to this temporary setback as it is a juggernaut in the cell phone market and has huge presence in the third world markets like China and India where the burgeoning population and the increasingly upwardly mobile middle class is fast catching up on mobile usage and internet connectivity through affordable Nokia handsets which cost much lesser than the Apple and Blackberry brands. Moreover the latter two brands have negligible presence as yet in the third world countries due to unsupported operating platforms. Here lies the competitive advantage of Nokia as it can develop its products in these markets and in the meantime come up with handsets which can offer competition to the I- phone and RIM Blackberry (Ewing, 2009). Nokia is already showing signs of recovery by adopting a brilliant strategy of working down its huge handset inventory of sets manufactured in 2008. Nokia already has a very good supply-chain efficiency record and has the capability to manage its affairs in this section in the future too. Moreover it has tied up with AT &T who will offer the consumers in US, the super thin Nokia e71x model for just $ 100 which is supposed to rival the I – Phone and Blackberry brands (Kharif & Ewing, 2009). Marketing in the present global scenario, in which Nokia is a major player does involve the elements of ‘The Marketing Mix’ and the 4 P’s of marketing i.e. product, price, place and promotion all affect the overall sales figure and thereby the profits of any consumer products oriented company. The marketing managers at Nokia can control and design strategies in any of these areas which however are subject to inner as well as external constraints of the marketing environment. The world is already facing one of the worst recessions in the present century and all decisions have to be made depending upon the buying power of the consumer and the necessity of the product. As far as the product is concerned, Nokia is already a world leader in the cell phone market and has an unbeatable track record ever since the advent of cell phones. The setback it has suffered in Smartphone section has been temporarily offset by the launch and impressive sales figures of other products like the 5800 Xpress music touch phone. It is coming up with feature rich mobile cell phones like the Nokia N97 and e71x models which hold some promise of offsetting the market advantage gained by the Apple and Blackberry brands. The issue of the second ‘P’ i.e. price is also being addressed as the company proposes to offer a feature rich cell phone in cooperation with AT & T, one of the largest cell phone operators in the US at an affordable price of $ 100 (Kharif & Ewing, 2009). As far as the third ‘P’, place is concerned, Nokia has succeeded in almost every country in the world except the US where it was offset by the other popular brands but the new strategies and partnership with AT & T plus the offering of a much sleeker product which matches feature by feature with the popular brands can allow Nokia to carve out a niche for its products in the US market as well. Moreover the launch of newer 3G based products and the launch of specialist stores (Nokia Ovi Stores) can help Nokia attract more customers (Mehta & Partanen, 2009). This is a novel approach as the Ovi store is just an online portal from where nokia phone users can access and store their media and other information which includes music, games, contacts, videos, etc. (Mehta & Partanen, 2009). The last ‘P’ i.e. promotion is also an important aspect and Nokia is leaving no stone unturned as the brand is heavily advertised in all countries where it is popular and also on popular online electronics shopping malls. It uses popular figures as brand ambassadors and sells its handsets in association with the popular cell phone operators in all parts of the world. Nokia at present has been able to sustain its market share and recover it to the all time high level of 37% despite a temporary setback in 2008 by its efficient inventory handling methods, going slow or ceasing production in order to offset the temporary lull in the market and the launch of products which had high consumer demand. It is also developing products which can be used as platforms for popular social networking sites like Facebook and Twitter. A specially developed software program for Nokia phones ‘Gravity’ has given it a distinct advantage over other phones as it allows ‘Twitter’ users to access their account easily (Woyke, 2009). The popularity of smart phones and hand held devices is based on the number of applications they are capable of running which are the current craze in the world and Nokia is developing strategies to come up with smart phones capable of handling the latest fads. New products like the Nokia netbook, handset and tablet PC are in the pipeline which is squarely aimed at its archrival, the Apple I-Phone (Ewing & Kharif, 2009). These products offer high tech features like touch-screen function, 3G functions and money transfer services on such devices without the need of bank accounts at bargain prices (Ewing, 2009). Instead of concentrating on hardware, the company is strategically focusing on attractive and feature rich applications which can have the potential for tremendous advantage to the end user. Nokia has certainly gained some advantage due to these strategies and its brand name and novel products have attracted the young as well as older customers all over the world. In the US, the launching of an ultra thin, QWERTY keyboard capable handset presently in collaboration with AT & T can help the company to recover its lost share of the market. By offering less expensive and more application friendly handsets Nokia stands to deliver and satisfy consumer demand. In my opinion the best marketing strategy Nokia can adopt is to lower the prices and deliver feature rich products at an affordable rate to the financially compromised consumer. As people the world over are on a cost cutting spree in order to tide over the recession, but still need to keep abreast of the what latest technology has to offer, reasonably priced, attractive and feature rich cell phones are what they need. Nokia has the background, infrastructure, brand name and market recognition to satisfy this demand. Works Cited Ewing J., 2009, Nokia: Signs of Stabilization?, online article available at: http://www.businessweek.com/globalbiz/content/apr2009/gb20090414_608950.htm Ewing J., 2009, Next Up for Nokia: Netbooks, Banking, Online article available at: http://www.businessweek.com/technology/content/sep2009/tc2009093_577532.htm Ewing J. & Kharif O., 2009, Nokia Takes Aim at Apple, Online article available at: http://www.businessweek.com/globalbiz/content/aug2009/gb20090827_101916.htm Kharif O. & Ewing J., 2009, Nokia Targets the U.S. Market, Online article available at: http://www.businessweek.com/technology/content/mar2009/tc20090329_098616.htm Mehta S.N. & Partanen A., 2009, The trouble with Nokia's iPhone killer, Online article available at: http://brainstormtech.blogs.fortune.cnn.com/2009/07/20/nokias-ovi-store-is-open-who-knew/ Woyke E., 2009, Gravity In Its Favor, Online article available at: http://www.forbes.com/2009/09/04/nokia-twitter-gravity-technology-wireless-sybian.html Read More