Introduction
Nokia is one of the world’s largest corporations as a worldwide technology and telecommunications firm. Nokia Corporation’s mill operation was established in 1865 (Bhalodiya & Sagotia, 2018). Nokia’s corporate culture is built on a foundation of respect, accomplishment, renewal, and taking on new challenges. A company’s growth and market performance are guided by these principles. The corporation is structured as a matrix, with each business unit responsible for its profit and loss. This arrangement makes quick decisions and a high degree of adaptability possible. Strategic action initiatives are put into place by companies and other organizations to direct organizational transformation and contribute to achieving strategic objectives. Strategic execution cannot be successful without a capable, knowledgeable, and well-equipped staff to carry out a sound strategy. Allocating resources, such as dividing the staff into specific areas of expertise and departments, establishing formal lines of authority, and devising mechanisms to manage the many responsibilities of the organization, is essential.
In terms of competitive advantages, Nokia’s well-known brand name stands out. On the other hand, the company’s inadequate post-sale service has been a point of contention for years in several of its global locations. As a result of the Nokia and Microsoft alliance, the company has a lucrative prospect. Telecommunications competition is the most severe challenge that Nokia faces. Although businesses are expanding and the market environment is speeding up, strategic obstacles must be faced (Bhalodiya & Sagotia, 2018). Leadership, legal or legislative obstacles, environmental challenges, human resource management challenges, research and product design growth, and potential financial troubles are all examples of these challenges. This paper will examine the Nokia Corporation, its history, the market industry it operates in, its mission and vision, its leadership, SWOT analysis, and the company’s primary strategic obstacle.
History, Vision and Mission, Purpose and Value, Competition, and Leadership
Nokia is a well-known mobile phone maker and retailer around the world. It was in 1865 that the mill operation that became Nokia Corporation was established (Morton et al., 2018). After a long history in many industries, including cable, rubber boots, televisions, tires, papers, and most recently, mobile phones, the company has successfully carved out a position for itself in the technological sector. In the 1990s, Nokia completed its foray into the telecommunications industry, according to the study findings (Morton et al., 2018). As of 1998, the company has established itself as the leading mobile phone brand in terms of sales and profit (Janes & Sutton, 2017). This accomplishment was made possible thanks to the efforts of the individuals listed above.
Nokia has undergone innovative and technological advancements that have seen it thrive in the market. For instance, in 2003, the company introduced its first camera phone, firmly cementing its place in the mobile manufacturing market (Bhalodiya & Sagotia, 2018). This was one of the factors that contributed to the company’s overall success. To combat the increasingly fierce competition posed by Apple’s iOS and Google’s Android operating systems, Nokia and Microsoft Corporation formed a great strategic collaboration in 2011 (Morton et al., 2018). This cooperation was formed to assist Nokia Corporation in coping with the intensifying competition (Donaldson, 2019). In addition, Nokia Corporation could remain competitive in a market prone to instability due to its 2015 acquisition of Alcatel-Lucent, a French-American telecommunications equipment firm (Donaldson, 2019. This was accomplished by diversifying its portfolio as well as its customer base.
The company’s mission and vision are “Connecting People” and “Very Human Technology.” Nokia promises to bring people closer to what they care about most. A company’s leadership chooses phrases that inspire to craft a vision statement. The goal of this document is to describe the future course of action that the company plans to take understandably and concisely (Morton et al., 2018). In addition to communicating the company’s goal and principles, a clear vision statement motivates employees to work toward a mutually appealing and inspiring future vision. A mission statement sums up a company’s operations and the driving factor behind its existence. Mission statements can change, especially in quickly evolving industries. Nokia Corporation has done this by implementing new strategic initiatives.
Respect, achievement, renewal, and challenges are the core values of the Nokia Company. By following these core principles, the company may continue to grow and succeed in the market. In the most basic sense, they serve as a common foundation on which Nokia employees may build a unified company, successfully cooperate, and make informed decisions. There are many ways to define the values of an organization. Janes and Sutton (2017) say that a company’s values are a collection of the beliefs, qualities, and behavioral conventions that the workforce is expected to show while working for the firm. The term “core values” refers to a person’s essential beliefs and character qualities.
Nokia has undergone many leadership revolutions to improve its company performance and help it re-establish itself in the competitive market. Since its inception, they have been the company’s most recognizable attributes (Donaldson, 2019). These changes were made to improve the company’s performance and help it re-establish itself as a viable competitor in the market. In recent years, Nokia, a once-dominant mobile phone company, has faced many challenges. These obstacles include tough rivalry, various demographics, consumer preferences, and firm restructurings.
Due to the high level of competition in the sector in which Nokia operates, the company must always look into new potential avenues of business strategy and make significant financial investments in marketing if it wishes to remain relevant (Donaldson, 2019). Apple’s iOS and Google’s Android, two competing mobile operating systems, are mostly credited with giving rise to today’s industry competition (Donaldson, 2019). In addition, in the beginning, Nokia’s decision to continue using the Symbian operating system for its mobile phone software was poor, resulting in Samsung Corporation gaining a competitive advantage over Nokia.
The Strategic Thinking Models of the Nokia’s Company
The technological sector of Nokia has a long history of being an innovator in their industry. The organization has a clear-cut structure and function for determining how to proceed with decision-making in light of the many stakeholders involved. The strategic planning process utilized by Nokia considers several considerations: market study, product development, and financial analysis (Bhalodiya & Sagotia, 2018). The corporation bases its judgments on various models, such as the SWOT analysis, the business model canvas, and the resource-based view of the company. In addition, Nokia emphasizes the part that upper management plays in making strategic decisions and has created various tools and methods.
Nokia is a huge international firm with complex decision-making procedures and organizational structures. Networks, Nokia Technologies, HERE, and Nokia Mobile Phones are the four divisions that make up the company’s structure as a corporate entity (Janes & Sutton, 2017). The Networks group is responsible for the company’s mobile and fixed network infrastructure activities. In contrast, the Nokia Technologies division is primarily concerned creating new technologies and licensing existing ones. While the Nokia Mobile Phones group concentrates on the company’s mobile phone business, the HERE group controls Nokia’s mapping and location intelligence business. HERE is an umbrella term for both mapping and location intelligence.
The organization can make decisions in a timely and effective manner because of its hierarchical structure and centralized decision-making process. This is essential in the telecommunications industry, characterized by high levels of change and competition (DeLone et al., 2018). The organizational structure and method used to make decisions at Nokia help to ensure that the company can exercise control over its many different businesses and operations. Nokia’s Chief Executive Officer (CEO) and eight other members make up the Nokia Executive Board, which is responsible for making decisions (Janes & Sutton, 2017). The Executive Board at Nokia is responsible for the general management of the company as well as the strategic decisions that will be made moving forward. The Nokia Management Board sits directly below the Executive Board and comprises the leaders of the company’s four different business groups. The company’s Management Board is responsible for managing the day-to-day operations of Nokia.
Making a decision begins with identifying the issue that needs to be resolved as the first step. After the constraint has been defined, the next step is establishing some objectives or goals. The objective should be determinable, attainable, pertinent, particular, and time-bound (Janes & Sutton, 2017). Following the establishment of plans, the next step is to think of potential alternatives. The options should be practical, and they should take into account the objectives that have been established. After the choices have been developed, the following step evaluates their available options.
During the evaluation, the company considers the costs and benefits of each possible course of action. After finishing the evaluation, the next step is deciding what to do. Various alternatives should be considered (DeLone et al., 2018). After the decision is made, it is to be put into action. The implementation must be carried out in a way that is in line with the objectives that have been established. After the performance has been finished, monitoring and analyzing the results is the next step.
News Item Affecting the Company and Posing a Challenge to its Strategy
Morton, Stacey, and Mohn (2018) state that the Nokia Corporation suffers from ineffective innovation management. The company has lost a substantial amount of market share due to this lack of innovation when one considers the company’s position as a pioneer in global mobile technology and the lack of creativity that the company has displayed. Nokia was previously at the top in the business when it came to mobile technology caused the company to become complacent about developing new technologies to meet the ever-shifting demands of customers. The company has pockets of extraordinary innovation, but no comprehensive strategy exists to take advantage of this potential (DeLone et al., 2018). Companies such as Apple and Samsung, well-known for their high levels of innovativeness, are swiftly taking over that market share (Morton et al., 2018). Nokia could be left behind if it does not develop and adapt to new technology.
To manage the rapidly changing landscape of the technology industry, the principal business strategy of the corporation is to investigate Nokia’s competitors. To drive growth, it is necessary to grasp who the competitors are and instill a sense of urgency in the company’s actions. As a result, inefficient innovation management stifles growth, typically perceived as the result of desirable by-products due to its enticing attributes, fair prices, ability to fulfill consumer wants, and attractive design.
SWOT Analysis
Many companies and businesses use the Strengths, Weaknesses, Opportunities, and Threats analysis (SWOT) as their strategic planning tool to conduct a situational analysis of the institution. The method is essential for analyzing any firm’s business operations’ current opportunities, threats, opportunities, and weaknesses. In the Nokia SWOT Analysis, the internal elements are considered the company’s strengths and weaknesses, while the opportunities and threats are considered external (DeLone et al., 2018). The SWOT Analysis is a tried-and-true management framework that gives a brand like Nokia the ability to measure its own business and performance compared to its rivals. Nokia is among the most well-known and respected brands in the information technology and computer industry.
Strengths
The essential features of Nokia’s company that provide it a competitive advantage in the market are the ones that are considered to be the company’s strengths. Some of the essential aspects that contribute to a brand’s strengths include its name and reputation, its financial situation, the skilled workforce it employs, the distinctiveness of its products, and intangible assets such as its brand value. One of the largest producers of consumer electronics, telecom equipment, and networking equipment is Nokia, for example. In addition, more than 90,000 people are working for Nokia worldwide (Khan et al., 2017). In addition, the corporation generates high annual revenues while doing business in more than one hundred different nations.
The well-known brand name ‘Nokia’ is another essential advantage the corporation possesses. For over a century, the company has built a powerful name for itself as a producer of mobile devices of the highest possible quality. Consumers worldwide have decided to purchase handsets manufactured by Nokia because of the brand’s reputation for durability, dependability, and innovation. In addition, Nokia and Microsoft work closely to develop their respective mobile devices. A large number of Nokia employees are expanding their knowledge of the telecom business with the assistance of Microsoft. Compared to other smartphones, the resale value drops significantly after only a few months or years; however, the worth of Nokia phones does not change significantly over time (Khan et al., 2017). In addition, Nokia mobile phones are easy to operate, can be purchased in various designs, and may be available at various price points. The realization of the value of collaboration contributes to the growth of an innovative and creative culture within the firm.
Weaknesses
When talking about a brand’s weaknesses, one refers to particular facets of that brand’s industry that the company is not doing and could further strengthen its position. Specific weaknesses can be defined as characteristics the company does not possess or areas in which its competitors excel more than it does. For instance, the company’s reputation suffered significantly due to being late to the market for touch screens and smartphones (Chaturvedi et al., 2017). Additionally, the company’s brand image has suffered due to legal issues that occurred in the past.
For many years, most of the company’s global locations have received criticism for inadequate post-sale service. In addition, the company has not successfully competed with Apple, Samsung, and Huawei in the smartphone market. (Chaturvedi et al., 2017). During the height of the smartphone boom, Nokia could not produce a device that could compete effectively. The discovery of the flaw is a significant finding that will improve the overall quality of the items.
Opportunities
Opportunities exist for every company; among those possibilities are places where the brand’s business could be improved. Opportunities for a brand can be found in various places, including global expansion, product advancements, and improved communication. Nokia can expand into additional consumer product categories, which can help the company establish reliable income streams (Khan et al., 2017). Inorganic brand expansion can be accomplished by purchasing companies in related industries, such as mobile technology and consumer electronics.
Consequently, the collaboration between Nokia and Microsoft has offered the company an opportunity that has the potential to generate significant revenue. The combination of Nokia and Microsoft will allow Nokia to build smartphones superior to those manufactured by Apple and Samsung, enabling Nokia to take the lead position in the rapidly expanding smartphone market (Khan et al., 2017). The smartphone market is multiplying, and Nokia needs to broaden its product portfolio to compete with the increasing number of devices made in China at lower price points.
Threats
Any company may face threats in the form of variables that can adversely affect their company. Threatening elements include, but are not limited to, an increase in competitors’ activity; a shift in government policies; alternative goods or services; etc. An increase in the amount of business conducted by rival companies might be detrimental to the business’s operations. Because of the high rate of change in the industry, a defective product might become a significant problem. In addition, the supply chain may be impacted by worldwide economic downturns or pandemics.
The high level of competition in the telecoms industry poses the most significant threat for Nokia to overcome. In recent years, the market for telecommunications services has seen an influx of new enterprises from China, Japan, and Europe. Many of these new entrants have met with great success (Chaturvedi et al., 2017). The globalization approach Nokia has been pursuing has been influenced by factors such as inflation, currency fluctuations, and other global financial issues (Chaturvedi et al., 2017). Because of their sophisticated technology, most Nokia phones are priced out of reach for consumers with lower means. It has always faced competition from low-cost phones made in China while trying to grow into new regions, and this challenge has never gone away. This discovery is critical to overcoming the challenge posed by the competition and gaining a position of superiority in the market.
Conclusion
The strategy of a company helps to determine the future course of the company. It serves as a record of a company’s strategy for achieving its goals. Obstacles like Nokia’s poor innovation management make it difficult to implement the strategy. New technologies, market needs, and new competitors are all factors that affect the technology sector’s capacity to forecast the future. The company has a well-defined structure and purpose for making decisions that consider the interests of multiple parties. Market research, product development, and financial analysis play a role in Nokia’s strategic planning process. Research suggests that Microsoft Windows should be phased out in favor of a superior operating system like Google Android; this will aid in resolving the high market value. The innovativeness of Nokia’s products gives them an advantage against Samsung, Apple, and other significant players in the smartphone market. If Nokia wants to meet the needs of the general people, it needs to widen its product range. Because the European market is already saturated, the company should concentrate on expanding into Africa, Asia, and Latin America.
References
Bhalodiya, N., & Sagotia, N. (2018). Reasons behind the failure of Nokia: A Case study of Telecom sector. International Journal of Management and Humanities, 5(03), 14-18.
Chaturvedi, S., Singh, S., & Chaturvedi, S. (2017). Analysis of decline market: Special reference to Nokia mobile phone. International Journal of Engineering Research and Development, 13(9), 22-27.
DeLone, W., Migliorati, D., & Vaia, G. (2018). Digital IT governance. In G. Bongiorno, D. Rizzo, G. Vaia (Eds.), CIOs and the digital transformation (pp. 205-230). Springer.
Donaldson, C. (2019). Nokia’s 7-step approach for turning its managers into real leaders. Web.
Janes, A., & Sutton, C. (2017). Ebook: Crafting and Executing Strategy: The Quest for Competitive Advantage. McGraw Hill.
Khan, S. T., Raza, S. S., & George, S. (2017). Resistance to change in organizations: A case of General Motors and Nokia. International Journal of Research in Management, Economics, and Commerce, 7(1), 16-25.
Morton, J., Stacey, P., & Mohn, M. (2018). Building and maintaining strategic agility: a plan and framework for executive IT leaders. California management review, 61(1), 94-113.