Nokias Smartphone Problem - Essay Example

Nokia: Case Study Analysis1. Nokia faced severe threats in the market during the years 2009 and 2010. The steady slide in its smartphone market appears to be the most potential threat to Nokia. In the opinion of Reardon, at the present, smartphone is the fastest growing segment of the mobile phone market and hence Nokia loses a potential market segment because of its failure in smartphone sector; the company experienced a total sales decline of 10 percent in 2009. It is also reported that the Nokia cannot successfully confront with iPhones and Blackberry phones.

However, it seems that the company still governs the low end of the cell phone market.2. Recently, Nokia almost lost the high end of the market to Apple, RIM, and Samsung. The company also faces severe competition from Chinese manufacturers which challenges the firms’ low market end operations also. Market reputation is a valuable asset to the company while it vies with its aggressive competitors. The company sells high volumes of low cost devices to the developing markets. The wider territorial coverage of the company is also a competitive advantage to Nokia.

The company’s large number of acquisitions may also become an asset while it addresses market rivals.3. As discussed earlier, Nokia faced considerable sales decline over the past three years and this situation reduced the firm’s profitability. It is necessary to take some short-term actions rapidly so as to overcome this unpleasant business condition. It is recommendable for the company to spend more on product research and development since modern consumers are always attracted towards changes.

Similarly, the company must formulate some effective strategies to minimize its cost of production as it would be beneficial for the company to set lower prices for its handsets. It is also suggestible for the company to maintain an efficient market researchers’ team that may explore market preferences and specifications.4. Although, Nokia has spent a significant amount of money both on acquisitions and researches and development, it could not take much advantages of this spending. According to O’Brien, while examining Nokia’s acquisitions strategies, it is obvious that the company overplays for acquisitions regardless of what it really needed.

It is also identified that the company gives higher emphasis on control rather than leverage while dealing with acquisitions; this policy would hurt the company in its long run. Although, the researches and development team designs effective technologies, the company cannot launch these technologies into market in a cost effective way.5. Obviously Nokia has been struggling in the market for the last three years. So as to overcome this situation, the company must focus only on its traditional handset business other than dealing with diverse product lines.

This strategy would assist the company to effectively vie with current market trends. Similarly, it is advisable for the company to concentrate more on smartphone market segment as this sector has a potential future. Moreover, the company must update itself with market trends because better market knowledge would assist the company to frame timely fitting business strategies. It is also advisable for the company to be more cautious while dealing with mergers and acquisitions since a false acquisition decision would produce far reaching consequences.

Works CitedReardon, Marguerite. “Nokia’a Smartphoe Problem”. Oct 15, 2009. CNET NEWS. Web. O’Brien, Kevin J. “Nokia Turns to Microsoft for New Chief”. The New York Times. Sep 10, 2010. Web.