This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.
Nokia Corporation was formed in 1967 as a result of the merger of three Finnish Companies. As it entered into the telecommunication business, it established itself as a highly innovative company with pleasing products and high technological developments. The company gained the basis for long term acquisition strategy for growth in 1980, when it acquired a few more German, Finnish and French consumer electronics companies. This acquisition also strengthened the company's position in the field of telecommunication and consumer electronics (Nokia: About Company, 2008). There are four business groups present in the company: enterprise solutions; mobile telephones; networks and multimedia.
In the world, Nokia is positioned as the fifth most valuable brand. It is earning near about $40 billion in sales within 140 countries. Nokia has built a strong global market place with near about 55,000 employees universally. It focuses on a global way of thinking, innovative corporate culture, research & development and on high market segmentation (Kotler, 2007).
In present there are more than 1.2 billion persons, who use the mobile facility and mobility has transformed the people's way of living, standard, society status, the company's current mission statement is “LIFE GOES MOBILE”.
The vision of the Nokia is to create a world where everyone can be connected. The basic need of a person is to communicate and share. Nokia helps people to accomplish this need and tries to help people to remain close. The company focuses on providing consumers with human technology that is instinctive, joyful to use and beautiful. An individual is living in an era where connectivity is becoming really universal (Nokia, 2007).
Product and Services
Nokia Corporation serves their customers with various kinds of innovated products and services. All the services and product are based on the demands and requirements of the customer with technology and variety. Currently, there are more than 40 models with elegant and modish design in the market. They also offer various facilities and network services to the customers such as broadband access, core network, operation support system, etc.
The positioning statement of Nokia is “Connecting people”. By this, they aim to accomplish the primary human need for social connections and contact. Nokia tries to build a link between people in both the situations when they are far away as well as when they are confronting each other. It also tries to bridge the gap between people and the information they need (Lovelock, 2008). The target of Nokia is to develop a relationship with its customers in the whole world. The Company also serves its customer with the valuable product according to their needs and budget.
In 2007, approx. 50% of Nokia's net sale was from Africa/Europe/Middle East, Asia-Pacific approx. 20%, China approx.10%, North America approx.10% and Latin America approx.10%. The United Arab Emirates, China, US, UK, Brazil, Russia, Germany, India, Spain and Italy were the 10 largest markets of Nokia. All together, they represented about 65% of the total sales. By the end of the 2007 quarter, there was an increase of approximately 2 billion of the company's global subscription. This was due to the strong growth in its new markets like China, India, Brazil and Russia.
Strength of the Company
Due to the strong brand name and product line, the customers feel comfortable at the time of using product. The strong brand name of the company and advanced technology of products with the variety has attracted a wide area of customers towards the company.
Nokia has more than 33% market share in the industry and it is on fifth place in the world. It has a strong financial background and it is a very big strength of the company. It is also the leading player in its industry due to the strong brand name, various services and innovated products line.
Weaknesses of the Company
Although the company has various strengths, yet it is not without its weaknesses. The facility or game released by Nokia N-Gage has failed in the market. The company is gaining a bad image in the market, as its role in Symbian is increasing. The company provides various innovated product but it is very slow to catch the new techniques and knowledge.
Opportunities for the Company
Due to the growth of the company in the CDMA market and 3G games, the company could gain many opportunities in the market. Increases in its market share and development of the product according to the generation is also an opportunity to attract the new customers. Due to the increases in the eco-efficiency, the company is able to produce better, lighter and excellent products.
Threats for the Company
Motorola offers highest threat to Nokia in future. Both Motorola and Nokia are challenging each other and competing for third generation segment of technologies. To compete with Nokia, Motorola is planning to introduce 10 to15 3rd-generation (3G) phones in the coming time (Ramaswamy & Namakumari, 2007). Sony-Ericsson has the potential to achieve larger market share in the high-end segments.
Presently, Siemens offers very little threat to Nokia and probably will not be a threat in the future (Kotler, 2007). Asian OEMs are entering into the market very aggressively and it would be a threat for the company.
Issues Related to the Global Market
Innovation: It is necessary to analyze the effect of changing market conditions on companies.
Change in consumer behavior: In the global research conducted for Nokia, it has been identified that there is a strong trend for consumers to move from their fixed line phones to use their mobile handsets. Thus, it is important to look forward and generate more customers.
Intellectual Property Management: For Nokia, it is essential to continue technology leadership and this would depend on the capability to make a solid IPR portfolio through strong investigation and development capabilities.
Varying Market: It is necessary to comprehend the significance of keeping abreast with varying market conditions and adapting to them speedily. It is essential to examine future challenges that the company faced and the various options available to it.
Industry Clusters: Nokia is involved in the cluster development process. It has emphasized on clustering with other international IT companies and has focused on wireless technology like Ericsson, Intel, IBM, Motorola, Compaq and Microsoft (Bryan-Low, 2007).
Telecommunications in the Global Economy: Nokia and the other foremost network handset developers should keep on playing a strategic role in the emerging global economy. International telecommunication networks can improve the global economy in many ways.
Global Risk affecting Nokia
Financial risk: Financial risks in the Nokia can be minimized by the centralized management of currency exposures. However, the sale, cost and result of Nokia are affected by exchange rate fluctuations, particularly between the euro, the UK pound sterling, the US dollar and the Japanese yen.
Market risk: the Market risk of the Nokia can be reduced by globalization strategies as the company's dependence on its home as well as local market and also on European markets is minimized.
Political risks: Nokia's sales are usually derived from emerging market countries, which may be adversely affected by economic, regulatory and political developments.
Economic Market Trends: Nokia has expected to increase the overall mobile device market in order to reach about 740 million units. As compared with the previous estimate, approximately 10% annual growth has been seen due to the economic market. The overall market is also expected to grow in value but to a lesser extent, it has achieved its target.
Strengthen B2B Relationships
It was the first time that the company launched a handset which included hardware design customization for key operators. The handset is identified as Nokia 610. The hardware design customization for key operators consists of exclusive product numbers, colors, industrial design alterations and logos. Nokia is committed to provide customer satisfaction and therefore implements the strategy of Customization in mobile device and mobile infrastructure business. The company is also planning to introduce about 90% of its new models of mobile handsets in 2005.
This strategy of customization and introduction of new models will increase the company's opportunities for carrying out cross promotional activities. Through customization, Nokia is meeting the needs of its service providers and also by continuing the relationships with traditional supplier/technology/value chain; it has achieved the leading position among its Asian rivals. Nokia has also set up dedicated internal teams for dealing with Vodafone and other service providers, so that the company can know consumer brand preference at the time of signing up for new mobile service.
Thus, it is recommended to increase the focus of corporate on changing the customer tastes and demands. It would also assist in the customization of products and retrieve the lost market share. For high-end segments, it is important to enhance the product development. It is suggested that the niche segment should not be overlooked and the firms with core competencies need to be acquired.
To maximize economies of scale and scope in targeting all segments of the market, it is important to develop a long-term strategy to view regionalized markets. To take the maximum advantage of the congregating industry like banking sector, GPS, camera technology developers and personal organization technologies, it is important to increase the number of cross-industry strategic alliances and relationships (Kazmi, 2002).
It is important to assess the need for the potential integration of components to reduce the supplier risks and to develop relationships with key network providers. It is recommended to develop strategically located R&D facilities in order to increase the exploitation of localized resources.
The company has a well organized system of business and marketing strategies. The company applies all its strategies very successfully and is improving in the global market without facing any interruption. The sufficient and respectable advertising strategy helps the company to attract the customers and connect with the system of the company. The product rate of the company is high in comparison to its competitors, so the company should decrease the prices of the products. In this competitive and innovative market, in order to approach more customers the company should open more shop centers.
Andrea, S. (1987). Licensing to Enhance Demand for New Technologies. RAND Journal of Economics 18 (3): 360-368.
Bryan-Low, C. (2007, July 24). Nokia Extends Web Push with Twango Purchase. The Wall Street Journal Article.
Kazmi, A. (2002). Business Policy and Strategic Management (2nd Edition). New Delhi: Tata McGraw Hill Publishing Company.
Kerin R., Hartley, S., Berkowitz, E. & Rudelius, W. (2006). Marketing (8th Edition). New York, NY: McGraw-Hill Irwin.
Kotler, P. (2007). Marketing Management (12th Edition). New Delhi: Prentice Hall of India Private Ltd.
Lovelock, C.H. (2008). Service Marketing (5th Edition). New Jersey, Prentice Hall Publishing Company.
Nokia: About Company (2008). Retrieved May 31, 2008 from http://www.nokia.com
Nokia Corporate Information. (2008). Retrieved February 21, 2007, from http://www.nokia.com/corporate
Ramaswamy, V.S. & Namakumari, S. (2007). Marketing Management (3rd Revised Edition). New Delhi: Macmillan India Ltd.
Repo, P., Kerttula, M., Salmela, M. & Huomo, H. (2005).Virtual product design case study: the Nokia RFID tag reader. Journal of IEEE 4(4).
Steinbock, D. (2001). The Nokia Revolution: The Story of an Extraordinary Company That Transformed an Industry. New York: American Management Association.