Strategic Management

Abstract

This Paper presents about the strategic Analysis  conducted on Nokia which experienced performance failure in the recent years which measured by qualitative and quantitative data relative to other firms in the industry such as Samsung and Apple. The Environmental and competitive analysis has been conducted to discuss the potential consequences of the current performance by using PASTEL and SWOT Analysis. An internal analysis has been conducted based on 7s models .

Introduction

Nokia is a well-known telecommunication Company since 1960s, the Company has started its business in 1865 as a paper producer and a wood pulp, the company has manufactures tyres, rubber boots, generated electricity and television sets. The Company has become the as the world’s 5th most valuable brand on mobile technology form 1960. The Legendary product of the Company was Nokia 3310 which made the world turn around the eyes to the Company.  But unfortunately this 100 Years old Company has been bought over by Microsoft for USD 7.17 Billion due to arise of aggressive competitors such as Sumsung and Apple. There was a strategy management failure of the Company by focusing on revenue maximization strategy instead of marketing strategy, hence the Company relatively failed adapting the market deviations created by the introduction of smart phones of the competitors who focused on marketing strategic.

Strategy Management is very important to a Company to decide where the Company to be on its business. Nokia’s strategy on revenue maximization does not really help the Company to sustain in the market. The Company’s struggles and hitches has been visible through its financial numbers as in June 2012 the revenue was reported as USD 34.08 Billion but this has been reduced to nearly 50% in June 2015 as USD 16.31billion, and in the Year of June 2013 the revenue was reported quarter of the previous year which was USD 8.57 billion. The Numbers clearly showed that the Company was just sustaining its position in the Market without marking any growth. The Company’s share of the smart phone market has dropped from 33%  to 14% form the year of 2010 to 2011 which this was very far worse  compared to Apple and Samsung. This is a transformation happened to Nokia after Google released Android, a system that operates smart phones in 2008. Apple and Samsung was able to adapt the market mainstream but Nokia was failed to do so, as of the year of 2012 the company moved to a worst ranking, which was rank number 6 as shown in the below figure 1.1 , according to IResearch Consulting’s report released in December 2012.At the point of time Nokia was massively loosed its customers who moved to smart phones.

[pic 1]

Figure 1.0. Sales share of each mobile phone brand in December 2012.

Task 1

Based on PESTAL Analysis, below are the potential consequences of the current performance of the Company.

Political factors:

Political factor is important to a multinational company like Nokia, because the company trades its product globally and any political changes in term of import and export laws will affect the Company’s performance. Nokia is a European based Company, located at the nation of Finland, the political issue that happened to the country has given a hard time to Nokia by troubled the Company into corporation with Microsoft that has since bent separately. The Company also had disruption to the production and limited the capability to grow its business at China due to Political changes and Nokia forced itself to move to higher cost locations such as the United States. The Company also had moved its manufacturing to India as its could follow the Government rules and regulation in term of minimum working hours and maximum wages and health and safety regulations, failed to follow the Government rules will lead the Company damage the reputations in short or long term, as well as any of the government changes or instability will directly affect the Company.

Economical factor

Economical factor is a very important as The Company has market all around the word. Overall in the world the Market has decreased widely for Nokia due to economic, this is especially to Europe and US that Nokia has loosed its Market. The Company also have to be aware of exchange rates and interest rates as they operate on a global scale and drastic changes to the rates will have a high impact to the financial operation of the Company, Therefor the Company should take appropriate steps to reduce the risk from this.