Executive Summary
The following is the strategic analysis and discusses the external and internal environment of Nokia Corporation. The first phase discuss about Nokia’s market position, share, size and growth, etc. The second phase described its external and internal environment, presents the opportunities and threats along with the political, economic, socio-cultural, technological, ethical and legal issues of the handset industry. This phase also analyze the strengths behind Nokia’s success and analyze its competitor deeply. We proceed with the analysis of Nokia’s weaknesses which may impede on its ability to utilize the growth opportunities. We also make recommendations regarding Nokia’s strategy for UK market, converged handsets market, and acquisitions.
1.0 Introduction
(History of NOKIA)
The history of Nokiastarts in 1865, by engineer Fredrik Idestam established a wood pulp mill in southern Finland and started manufacturing paper. Due to the European industrialization and the growing consumption Nokia soon became successful.
In 1895, Fredrik Idestam handed over the reins of the company to his son-in-law Gustaf Fogelholm. The Nokia factory attracted a large workforce and a small community grew up around it. The Nokia Community attracts other Companies the hydro-electricity, which the wood-pulp mill used also attracted the Finnish Rubber Works to establish a factory in Nokia. A community called Nokia still exists on the riverbank of Emakoski in southern Finland.
In 1920s, the Rubber Works started to use Nokia as their brand name. After Second World War, Expanding into Electronics, the Finnish Rubber Works bought the majority of the Finnish Cable Works shares.
In 1967, the companies were merged to form the Nokia Group. The Finnish Cable Works had manufactured cables for telegraph and telephone networks and in the 1960 they established the Cable Works �Electronics department. At this time the seeds of Nokia’s global success in telecommunications were planted. At that year, The Nokia Group was formed; Electronics generated three percent of the Group’s net sales and provided work for 460 people. The Journey into Telecommunications Nokia�s Cable Work’s Electronics department started to conduct research into semiconductor technology in the 1960�s. This was the beginning of Nokia’s journey into telecommunications.
Early 1970s, the majority of telephone exchanges were electro-mechanical analogue switches. Nokia developed the digital switch called Nokia DX 200 which became a success. That digital switch was equipped with high-level computer language and Intel microprocessors gradually evolved into the multifaceted platform that is still the basis for Nokia’s network infrastructure today. Same time, new legislation allowed the Finnish telecommunications authorities to set up a mobile network for car phones that was connected to the public network. The result was Nordic Mobile Telephony (NMT). Opening in 1981, NMT was the world’s first multinational cellular network. During the following decade, NMT was introduced in many other countries. At the end of the 1980s a common standard for digital mobile telephony was developed, known as GSM (Global System for Mobile Communications).
In 1991 Nokia made agreements to supply GSM networks to nine European countries and by August 1997 Nokia had supplied GSM systems to 59 operators in 31 countries. In 1988, Nokia was a large television manufacturer and the largest information technology company in the Nordic Countries. Focusing on Telecommunications, during the deep recession in Finland, beginning of the 1990s, the telecommunications and mobile phones divisions were the supporting pillars of the Nokia. Nokia came to its feet quickly as the company started streamlining its businesses. In May 1992 Nokia made the strategic decision to divest its non-core operations and focus on telecommunications. The company’s 2100 series phone was an incredible success.
In 1994, the goal was to sell 500,000 units. Nokia sold 20 million. There has been rumoured that, a group of businessmen tried to offer Nokia to the Swedish telecom company Ericsson during the recession in 1990. Today, Nokia is a world leader in digital technologies, including mobile phones, telecommunications networks, wireless data solutions and multimedia terminals.
2.0 MISSION STATEMENT
Around ten years ago Nokia’s representatives stated their mission as “VOICE GOES MOBILE”, a mission that was believed innovative at the time. However, since today there are over 1.2 billion mobile subscriptions globally, more mobile phones are in use tin the world, and mobility has transformed the way people live and conduct their lives, the company’s current mission statement looks a bit different: “LIFE GOES MOBILE”.
3.0 Company Profile
- Founded in 1865 in a small Finnish town outside Helsinki
- Originally, a manufacturer of wood pulp and pulp
- A government-orchestrated merger in 1966 resulted in Nokia acquiring an electronics subsidiary.
- In 1975, Kari Kairamo was appointed CEO.
- Kairamo decided to focus Nokia’s operations on high-tech ventures, with a particular focus on the telecommunications industry.
- Kairamo also decided to expand Nokia’s target market from Finland to all of Europe.
- Wireless wizard Nokia has cast a spell on the mobile phone market. Nokia is the world’s no. 1 maker of cell phones ahead of such rivals as Motorola and Samsung, among others. Nokia is also aiming for the top of the nascent mobile Internet market. The company’s products are divided primarily between three divisions: devices, services and software and markets.
4.0 Product & Services
Nokia Corporation offers a well-developed variety of products and services , which completely satisfy consumers’ needs and demands. The client is given a choice of products used outdoor, such as mobile phones. Apparently, there are about 40 different models available in the present market. All of the handsets have elegant and modish design. In addition, most of the telephones are small and portable; others include cameras, radios and digital music players. Apart from cellular, Nokia offers also land telephones, pocket radios, computer hardware, digital TV receivers and satellite carriers. Furthermore, Nokia offers Network products and services that are grouped into specific categories : – Broadband Access – Core Network – Narrowband Access – Operations Support System – Radio Network – Security – Service Enablers – Services for Operators – Terminals – Wireless Transmitters
5.0 BUSINESS STRATEGY
The overall business strategy of Nokia Corporation is to reinforce its international status in the market as a frontrunner in network system and to be the biggest supplier of its products. As part of the company’s goal is to intensify consumer satisfaction and introduce new changes in technology in order to allow people to have easy and instant access to mobile world, internet and services. Other key part of Nokia’s objectives is to take advantage of its leadership function and aim to persist in the communication market. That guarantee rapid and faster organization’s evolution. In order to acquire these set targets, Nokia concentrates its tactics on several significant issues: Existing in the market as the favorite supplier of products and ideas for roaming communication. They develop their core proficiency through brand expansion, product design and its uniqueness, and valuable demand-supply network management. Inventing specialized communication technology. The company aims to continue creating new ideas concerning products and their design, group development and network management. Driving open mobile architecture and authorizing global mobile services. Nokia plans to accomplish this through powerful cooperation with clients, dealers and industry members. Continuous strengthening and advancing Nokia’s brand. Although, the organization has already succeeded in making Nokia’s name well-known and outstanding trademark in worldwide mobile connections, they aim to build on the company’s reputation through sponsorship, insistent promotion and other marketing actions in the main markets of this corporation. Broadening their business and trade position in a lucrative way. Through following closely partnership and maintaining a powerful local position in all rising markets, they are able to acquire balancing technologies and top market positions. As a matter of fact, Nokia has successfully managed to expand its business globally. Today, all Nokia’s products and services are being sold and offered across the world, what allows Nokia to take advantage of strong economies of scale.
6.0 Market Status
Shares in Nokia have fallen 10% after the Finnish mobile firm reported weak US sales and cast doubt over industry growth prospects this year. Its US handset sales fell 46% in the first quarter of the year and, despite strong sales in other regions, Nokia’s global market share dipped slightly. It also warned that the value of total mobile phone sales, denominated in Euros, could fall this year.
However, Nokia saw profits jump 25% to 1.22bn Euros ($1.95bn; �980m).
Nokia enjoyed robust sales in the first three months of the year, particularly in emerging markets in Asia and Latin America.
Total shipments were up 27% compared with the same period last year, but were actually 13% lower than in the final quarter of 2007 reflecting a slowdown in some markets. Nokia’s market share dipped from 40% at the end of year 2006 to 39% although the firm said it expected this figure to rise again in the second quarter. Its average sales price also fell, on a quarter-by-quarter basis, from 83 Euros to 79 Euros per handset. Nokia expects mobile industry volume sales to rise 10% this year but analysts focused instead on a possible decline in sales values. “Nokia’s main market – Europe – is slowing down and the company now gives clear evidence of that,” he added.
References
http://www.about-nokia.com/history [Accessed 21th August 2009]
http://biz.yahoo.com/ic/41/41820.html [Accessed 29th August 2009]
http://news.bbc.co.uk/1/hi/business/7352627.stm