Nokia is a global multinational company that manufacturers mobile phone devices, converging internet and communication companies with a staff numbering about 132,000. The company is the biggest in the world and can be found in close to 150 countries. Its approximate global yearly sales revenue is €42 billion and the operating profit is €2 billion before 2010. The company has a market share of 28.9% in 2009 and still stands as the market leader in the manufacture of mobile phones.

The Nokia Company has 146 years from which it has grown to be what it is today. The Company started as a paper mill in Nokianvirta River and buy 1865 to 1967 the company was a market force (Euromonitor International, 2010). This was after merger with a cable and rubber company that created the Nokia Corporation that deals in electronics.

By 1960s to 90s, the Nokia Corporation was well placed to be on the fore front in the growth of mobile communications. With the European market being free and growth of mobile networks globally, the company was on the fore front. The most popular strategic decision for the company came in 1992; the company acquired GSM standard (Lindholm, & Keinonen, 2003, 23). The company grew in the mobile phone industry and led for periods.

1.1. Situation Analysis

Nokia is currently the world leader in the mobile phone industry. With its fast experience and resources, the company has been on the fore front in supply of mobile phones, fixing broadband and IP networks. Through mobility in the internet, Nokia offers chance for firms and improves lives. In 2011 the company faced a drop of sales. This led to the company making a net loss of €368 million compared to a profit of €227 million in 2010 (BBC, 2012; Milmo, 2012). In 2013, the company faced job cuts numbering 7000 with about half going to consultancy for increased focused on smartphone.

2. Vision and Mission Statement

2.1. Vision for the Future

Nokia Corporation’s vision is to connect people. The company every person the ability to get connect to what they find as useful at any point, and time. The connection established by the company focusses on the majority of the people and not a single person (Nokia, 2013). This is the grounds onto which Nokia Corporation is built on for every person.

2.2. Mission Statement

The company has a mission set out for all of the major players.

Customer – the company aims to maintain the confidence of the client in the company through persistent provision of quality service that satisfies their needs.

Market – to be on the fore front as a market leader in the industry through continued provision of quality services.

Business – to make sure that the staff in the company is well aware of every Mobile Network Internal Systems and how it works. Through this, the employees will be responsible for the amenableness with the Business Management System.

Training – to make sure that is a progressive training process that is aimed at giving power to its employees with skills and experience that are vital for the success of the organization (Nokia, 2013).

Team – to offer the most effective and efficient working set up, advancing careers and job security, boosting the level of trust in the organization and loyalty to the clients.

3. Analysis of Stakeholder

The Stakeholders are the people that are of interest to the company activities. Nokia Corporation is one of the biggest organizations hence the stakeholders are a bigger part of its strategies. The stakeholder include: internal and external stakeholder, shareholder, staff, suppliers, customers, government, community, media, bank and insurance.

3.1. The internal stakeholders

The shareholder in the company accumulates the capital for the business as they are a part of the business. They get part of the profit accrued, bonus and dividend as they feel comfortable investing (Doz, & Kosonen, 2011, 154). For the employees, the company accommodates them in the discussion of matters of corporate significance, career, competence, performance and work-life balance that acquires the desires and anticipations (Board of Directors, 2011). The suppliers plays a vital role for the company. The company is aware of the significance that they play an aim to meet their needs like payment, communication among other things.

3.2. External Stakeholders

The customers are involved by the company in matters of sustainability. The network operators, a part of the client community, are supposed to acquire high levels of company accountability in the processes (Thompson, and Martin, 2005, 72). The company gets enquiries on social and environmental performance from the clients. The government has policies that the company has to follow.

3.3. Business Community

Nokia Corporation is engaged in activities with other companies on several matters. There is the Global e-Sustainability Initiative (GeSI) which takes part in supply chain operations, and wastes (Board of Directors, 2011). There also the World Business Council for Sustainable Development which comprises the banks and media.

4. Nokia’s Existing Marketing Strategy

Nokia Corporation’s responsibility strategy lies in involving, enhancing and accounting to all of its operations and shareholders. The company is involved in a continuous measurement and review of its performance in the economic, setting and social areas. It takes part in stakeholder dialogue and create associations that meet the needs of areas they look to enhance. They go after fixated and practical improvement initiatives in vital areas of the company. This comprises business development, internal communications and training (Board of Directors, 2011). It creates a better sense of accountability to the stakeholders by reporting and informative internal and external communication process.

The company is on the fore front in the industry due to how they carry out their business. With regard to the same method that they base their operation, the other activity, ‘The Nokia Way’ – based on the corporate accountability, is advanced by a gradual and extensive process. A big part of this process is based inside the organization with most of the work rising from the present programs (Cole, 2003, 21). The company’s operation are taken through a corporate responsibility process, the support allocates its owners services in building cases for ethical growth and implementation and bring about accountability for all the stakeholders. To them, corporate responsibility is a vital that it progressive in making decisions for the company; being accountable to what takes placed in the business (Board of Directors, 2011). It is through looking at issues arise within the business that they are able to organize the company, using its resources, to be proactive and meet the long term objectives. The company’s strategy focusses on growth of the mobile communications in size and quality through; growth of mobile voice, management of client media and enabling mobility to the companies.

5. Internal Audit

5.1. Resources

Human resources: this is the number of skilled and unskilled employees that work for Nokia Corporation. The company’s recruitment process involves take a large number of technically skilled employees due to its type of technology. They go through training so as to refresh their skills and knowledge about the operations in the company and give them opportunities for enhancement of programs (Husso, 2011, 23). These program developer are able to work in the comfort of their homes so as to compete with others and be on the fore front. With the fall in sales in July 2011, where the company made a loss of €368m, the company is looking to cut down on cost through making their unwanted employees to be redundant (BBC, 2012). The company, being a leader in the mobile phone industry, has taken losses and made over 1000 employees be redundant (Milmo, 2012). Additionally, the company looks to cut more staff by 600 based on the poor profits.

Physical resource: these resources for Nokia Corporation is noted in terms of the structures it has set up, and facilities available globally. Nokia based on this has a large number of stores globally. The company has gone on to spread its stores all over the world.

Financial resources: the company’s financial resources has gone through a massive fall bases on the market margin as noted in the financial year of 2011. This is in comparison to 2010.

Source: Board of Directors (2011). Nokia in 2011. Acquired on 6^th September 2013 from < http://i.nokia.com/blob/view/-/1161018/data/2/-/Request-Nokia-in-2011-pdf.pdf >

Intangible resources: Nokia Corporation has several trademarks. The name ‘Nokia’ is itself a huge brand compared to its competitors like Apples’ Iphone and Google’s Android. It is basically the pace setter in the mobile phone industry.

5.2. Core competencies

The core competencies for Nokia Corporation comprise of activities and operations which are done by the company so as to enable it be on the fore front in the market as well as its competitors. Core competencies are simply things that the company does or undertakes in regard to its competitors.

The company’s competencies maybe hard to copy, things like the loyalty of the customer among others. These core competencies vary as time goes by. Currently, the market is facing a down turn in terms of its sales (Cole, 2003, 32). Companies, including Nokia, are looking for alternative ways to be rigid and stay relevant compared to its competitors. Nokia Corporation has created new services and products that are not easy to replicate in terms of features. This focusses on allocating the customers value for their money.

5.3. Managerial Competences

These comprises of the knowledge, skills, attributes, experience and contacts that make a company to acquire good performance. The competence involves the application of the elements. It is always reflected in the output of an organization (Husso, 2011, 56). It formulates and applies visions, it operates in the best way to acquire an effective outcome, accords power and responsibility and ability to engage in groups to acquire effective outcome.

Nokia Corporation’s managerial competencies are divided into varied groups. There is:

Technology competency: manages technology products; transit, purchasing, training and basic operations.

Marketing Knowledge: manages the market in terms of competitor knowledge, supplier skills, customer needs, sales and business understanding.

Management: this is based on how Nokia Corporation manages things. It comprises management of employees, finance, strategic planning, Nokia Way of operation and quality management.

Leadership: this is based on leadership aspects. The company acquires this through motivation of its employees, team work, management of staff welfare, performance and time management.

5.4. Corporate Culture

The Corporate Culture for Nokia is focused on achieving success in all of its operations. The Nokia Way is focused on speed and dynamic aspect when making decisions. The company comprises of a flat-networked company with a certain level of bureaucracy, equality of opportunities for all of the staff (Thompson, and Martin, 2005, 62). The values on which the company grows are based on customer satisfaction, respect for people, achievement and progressive learning.

Customer satisfaction aims to meet the needs of the customers with effective strategies of the company in the market. Nokia Corporation acquires this through dedicated sales and marketing, making quality products and responding to their needs (Lindholm, & Keinonen, 2003, 127). On the other hand, respect for people is acquired through issuing opportunities for growth, team work and autonomy (Husso, 2011, 67). Achievement is acquired through coming up with new ways to react to a change in the market, and focus on the Nokia’ objectives. Lastly, progressive learning aims to enhance perfections, this can be met through promotions.

5.5. Nokia’s Value Chain

The customers in Nokia Corporation do not buy their products from the company, instead they enlist themselves in cellular plan from the service providers. The company sells its products to service providers or distributors. This is after the company has manufactured all of the mobile phone devices.

The company’s market share is about 40% with a global yearly revenue of €51 billion and an operating profit of 8 billion (Doz, & Kosonen, 2011, 154). Nokia has developed itself to be a world class in leveraging its abilities in several areas, as well as declined international sourcing of resources and developing international brand building. This has led to an effective business model that is keen on its clients.

5.6. Factors Delivering Competitive Advantage

The competitive advantage for Nokia Corporation is based on a number of things. The brand image for the company is a huge one due to the market share and public image the company has acquire over time. The products the company produces are of high quality hence, satisfying the needs of the customer. Innovations in a company enable the company to keep on growing in addition to providing quality products. The demand for the products in Nokia is high (Thompson, and Martin, 2005, 173). This comes with prestige of owning the latest quality products.

The company’s core competencies have been well advanced so as to acquire competitive advantage. This is based on scale, brand and services.

5.7. Summary of Nokia Strength and Weaknesses

5.7.1. Strength

Nokia Corporation has a huge network distribution and selling platform which leads to its huge financial success. In comparison to other players in the industry, the company’s products are easy to use and meet the basic needs of the customer (Johnson, Scholes, and Whittington, 2011, 121). With the social class varying, Nokia has products that meets the needs of all the classes. Additionally, the re-sell value of the company is good in regard to other companies.

5.7.2. Weaknesses

Similarly, the company has a down side. The products produced have a certain level of unfriendliness. They are too complicated for users. The price level are similarly high making people to looks for other cheaper phones. Additionally, the company does not change fast in rise of a changing market. The third world has few service centers owned by the company.

6. External Analysis

The external analysis focusses on opportunities and threat present; they involve PESTLE analysis, and Porter’s Five Forces among others.

6.1. PESTLE Analysis

Political – with the market being uncontrolled, the operators and manufacturers are able to go about their business with no government interference. In nations like India and China which have limited government involvement the market is free to operate as it pleases.

Economic – the rise in income, people have ability to choose what they want. They are able to focus on other aspects as opposed to meeting the basic needs of the clients (texting and calling), price being a factor.

Social – the increase in information society has enabled telecommunications vital to clients in their places of work and leisure. The users of the products are able to product choice and progress based on information access.

Technological – there is global development in technology like MMS, Bluetooth, WAP and GPRS among others (Doz, & Kosonen, 2011, 155). The markets are technologically advanced in certain countries like China.

Legal – the legal platform offers a good basis for the company to operate. This is good for the company to operate with no interference.

Environment – the company operates in a competitive setting which makes it to focus more on innovative practices. This can be seen in Asia as opposed to Europe market.

6.2. Porter’s Five Forces

Power of New Entrants – new entrants in any market are not appreciated. Any new products introduced by Nokia Corporation has a half chance of succeeding (Porter, 1990, 31). Like the introduction of Nokia N95 Smartphone that was appreciate by clients.

Power of Buyers – with the fall in the economy, the demand for products stopped. This forced the company to look for new ways to meet their needs.

Threat of Substitute – the mobile industry has substitutes that threaten its operation. This comes with the emergency of something new that is better and meets the needs of the clients.

Power of Suppliers – the suppliers have the ability to change the price of good. Nokia in this case will be affected (Porter,1990, 69). Several suppliers, however, offer it an option of switching.

Competitive Rivalry – this is necessary as it offers an opportunity to enhance operations and products. Nokia is innovative and searches for ways to improve its products.

6.3. Strategic Group Mapping

Strategic group means groups of companies in an industry that are involved in a common business model or strategies. The groups are reliant on the dimensions applied. In the mobile industry, companies that have a similar strategic group to Nokia are Apple, Blackberry, and Samsung (Johnson, Scholes, and Whittington, 2011, 121). These companies are global smartphone manufacturers.

6.4. Industry Life Cycle

Source: Euromonitor International, 2010

The life cycle shows major changes in the industry since 2006. This can be attributed to the several models of phones that have been introduced with time. The company is at tis mature stage stating that it is hard for new entrants. The products produced have been of high quality and satisfy the needs of the customers. Technology has played a major role in this.

However, as can be seen from the graph, the company has gone through a slump in sales. This can be attributed to the quality of the products manufactured as well as the prices. Additionally, the level of competition has grown making it possible for the industry to compete at the highest level (Johnson, Scholes, and Whittington, 2011, 123). The slump in sales is visible from the graph form the 2009 decline.

6.5. Boston Matrix

Source: Cole, 2003.

Problem Child/Question mark: the entrance of a new product into the market can be attribute to a low market share. It however, has the ability to grow and become a Cash cow, but if it falls it becomes a Dog. The Nokia Corporation new product, the N-series Smartphone N96 finds it hard to acquire the market share compared to prior phones like N95 Smartphone.

Cash Cow: this arises when a product’s market matures and its demands declines though it has a huge market share. Nokia Corporation has several products that have acquired maturity and declined with time its high end Smartphone N95 have acquired market demand and is gradually declining due to new technology (Laanti, et al. 2011, 275).

Star: this is a new product that has been produced. It has great market reaction and the sales improve. Nokia Corporation and others of the same stature look for new products that can develop into stars and invest in Problem Child and Dogs to make them Stars and hope to acquire Cash Cow.

Dog: A Dog is an emergent product or old market shares and sales that fall at a high speed. In this industry where Nokia is, there is fast pace that technology change. In such a case, even the Star with a poor strategy grows to be a Dog with ease.

6.6. Opportunities and Threats

6.6.1. Opportunities

Nokia Corporation looks to shift from mobile to computer manufacture (Laanti, et al. 2011, 276). The level of living in the third world presents an opportunity for the company to sell its products. The company has to focus on main clients so as to be successful.

6.6.2. Threats

The threats include the rise of new competitors that make the industry tight. However the biggest threat is from not getting new technology and its application.

6.7. Appraisal Opportunities and Threats

The company’s Threats are overcome by creating opportunities:

Focused Differentiation: Nokia Corporation competes with regard to differentiation and a section of the market to offer its products. The company can join other major companies in mergers to create improved products. This involves use of R&D resources. This will enhance management trend and more investment.

Low-Cost Strategy: this applies with the rise in competition. This makes it possible for the company to get new skills and facilities and effective in main competencies. This will enable the company create products with differentiated attributes affordably. The clients are hence able to acquire value for the products.

6.8. Strategic Options

Differentiation: this looks to join or merger with other industry for production of quality products.
Focused Low Cost/ Differentiation: this is focused on attaining affordable cost for the products to the clients.
Integrated Low Cost/ Differentiation: this integrates mergers and affordable cost.

7. Conclusion

The changing mobile phone industry has made it to be among the most competitive. The PESTLE shows the relevance of Nokia in getting to know the setting of the industry. Additionally, the five forces shows Nokia as being average in the production of products, high buyer ability and stiff competition and low threat of new entrants and substitute.

The internal analysis shows the major strategies for the company and what has enables it to be the leader in the industry. The paper has focused on this and causes for the major slump. The paper has ended on how to resolve these issues for a better future.

References

BBC 2012. Competition pushes Nokia into losses. Acquired on 6th September 2013 from <http://www.bbc.co.uk/news/business-17769772>

Board of Directors 2011. Nokia in 2011. Acquired on 6th September 2013 from <http://i.nokia.com/blob/view/-/1161018/data/2/-/Request-Nokia-in-2011-pdf.pdf >

Cole G. A. 2003. Strategic Management. London: Letts Educational.

Doz, Y., & Kosonen, M. 2011. Letter to the Editor: Nokia and Strategic Agility: A Postscript. California Management Review, 53(4), 154-156.

Euromonitor International, 2010. Nokia Group in Consumer Electronics. Acquired on 6th September 2013 from; <http://www.euromonitor.com/nokia-group-in-consumer- electronics/report>

Husso, M. 2011. Analysis of competition in the mobile phone markets of the United States and Europe. Acquired on 6th September 2013 from <http://epub.lib.aalto.fi/en/ethesis/pdf/12638/hse_ethesis_12638.pdf>

Johnson. G, Scholes, K. and Whittington, R. 2011. Exploring Corporate Strategy, 8th Edition. London: Prentice Hall.

Laanti, M., et al. 2011. Agile methods rapidly replacing traditional methods at Nokia: A survey of opinions on agile transformation. Information and Software Technology, 53(3), 276- 290.

Lindholm, C., & Keinonen, T. 2003. Mobile Usability: How Nokia Changed the Face of the Cellular Phone. McGraw-Hill, Inc.

Milmo, D. 2012. Nokia slumps to €1.3bn loss under competition from Apple and Samsung. Acquired on 6th September 2013 from <http://www.guardian.co.uk/technology/2012/apr/19/nokia-slumps-loss-competition- apple-samsung>

Nokia, 2013. Acquired on 6th September 2013 from <http://www.nokia.com/about- nokia/company/vision-and-strategy>

Porter, M. E. 1990. The Competitive Advantage of Nations. New York: The Free Press.

Thompson, J. and Martin, L. 2005. Strategic Management – Awareness and change, 5th Edition. London: Thompson Learning.

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