Advancement in technology has facilitated the growth of mobile and telecommunication industry. The sector is dominated by leading world producers who depend on their operational management decision to remain afloat in the competitive industry; some of international companies in the industry include Samsung, Nokia, Sony-Ericson, Apples, and Google Android-powered phones. Nokia has been a leader in the industry in innovation, sales, and market share, however the increased competition has triggered for strategic decisions to be made by the company.
Decisions are the driving force in any organization. The quality of decision that managers make give their organization direction and focus. The growth and competitiveness of an organization is influenced by the quality as well as acceptability of decisions made by managers at all levels (Zi-Lin, Kwanghui and Pho-Kam, 2006). This paper analysis the strategic direction taken by Nokia Phone Company, will also undertake a strength and weakness analysis of the company.
Brief history of the company
Nokia is an international phone company, with its headquarters in Finland; according to the company’s website, the company currently enjoys a market share of about 37% and aims at increasing the market share to over 40% by the end of 2011. It has a strong brand all over the world, the companies positioning statement is “technology connecting people”.
The company’s headquarters are located in Keilaniemi, Espoo. Currently it has a total number of employees over 123,000 distributed in various countries. It has it presence as a selling point of full branch in over 120 countries. In the year 2009, the company was able to make a profit of ˆ1.2 billion this was over 10% than what it had recorded the previous year.
The idea of the company was started in 1865 however; it became a telecommunication company in 1960’s (Nokia Official website, 2010).
Nokia Vision, Mission, Purpose and value of its marketing materials
Nokia is one international company that has a simple and straightforward mission statement as “Connecting People”. Its vision statement is “Our strategic intent is to build great mobile products” (Nokia Official website, 2010), this vision statement has more focus on the phone section of the company as the main business segment that the company has. The main purpose of the company is “Our job is to enable billions of people everywhere to get more of life’s opportunities through mobile” (Nokia Official website, 2010). To ensure that the company fulfils its vision, mission and purpose, it operates under marketing values and principles; they include innovation, products development, respect for the people and respect for research and development projects (Nokia Official website, 2010). The current electronic market is fiance and competitive, there are number of players in the industry that calls for Nokia to keep changing its operating policies and strategies.
It has to keep changing its approach to ensure that it remains competitive. The main competitors of the company include Samsung, Apple, and Sony-Ericson. To fight the competition, Nokia has engaged in a number of collaborations with other likeminded companies to ensure that it remains competitive. One of the recent strategic alliances that the company has made is strategic partnership with Microsoft to offer the company with the right software to compete effectively. The drive to remain competitive and offer high returns to the company has made the management to develop new strategies that will see it succeed (Reid, Plank and Richard, 2004).
Review marketing performance
Nokia has been a leader in the electronic industry however current innovations and venture of other international companies have hindered the companies continued leadership; the companies strength and innovativeness has made it world’s largest manufacturer of mobile phones.
In the first three quarter of 2010, the company enjoyed a market share of approximately 31% on average; however, the market share reduced to 30% in the last quarter of the year. The drop of the market share can be attributed to aggressive marketing and selling approaches adopted by its competitors mostly Apple Inc and Google Android-powered phones. The company is also diversifying rapidly in laptops, IPods and I phone to enable it share a large market in the electronic industry. The results of 2010, were lower to those recorded in 2009 of 35% in the fourth quarter; so far, the marketing approach that the company has adopted is doing well in the markets however, the trend is alarming and calling for something extra to be done if the company has to remain in the forefront of the market. Nokia has a positioning statement as “connecting people”, the statement is deeply rooted in the people who’s the company aims at serving through its products.
The positioning statement with a single grasp describes what the company is up to and what it aims at offering. One of the major weaknesses that the companies marketing campaigns have had is that they have been only inclined to advertising and selling of phones; however, the company has more products that it can use to increase its market, revenue as well as sales. Another problem that can be seen with its structure is the presence of its research and development plants; the last quarter of 2010 say the company have research and development outlets in only 16 countries from its present countries of about 120. The representation of the research and development team is thus not a representative of the company’s total presence (John and Mowen, 2004).
Nokia strength is ventured in its strong brand name that is internationally recognized. There is a wide recognition of these products in all parts of the world. The strength of the company is undoubtedly be engineered by its internal managerial mechanisms. In order to have a competitive edge in selling its product and services, it will be advisable for the company to take advantage of its ability to compete favorably with equal players in the market. The company’s products are fitted with different features and yet they are sold at an affordable cost (Sadler, 2003).
One weakness that Nokia is having is having a slow rate of products development; in the near past, the company has been producing products after other companies have invented them. It has become a company of copying technology instead of being a leader in developing the technologies (Ketels, 2006). With globalization, the company has the chance of targeting international markets, it can expand its market share in other countries and improve its products to attain customer loyalty and retain it as well. The major threat facing the company is competition from other companies in the industry who seem to be more aggressive and are having consumer-targeted products.
This has made the company shed some markets to these competitors (Peter, 2006).
Scope marketing opportunities
Opportunities are positives that a company can utilize for its benefits, one of the most outstanding opportunities that the company has is growth in globalization. Opportunities for the company are dependent on both the internal and external assessment criteria of the company’s profile of operation (Kotler & Armstrong, 2001).
Some of the underlying opportunities for this company about the macro environment are the diversification of its activities. When operating in more than one country, the company should ensure it well understands the marketing approach that it should implement for its success. Different countries call for different marketing approach depending with the people living in the area.
There are some green markets or some markets that have not been fully utilized that the company should think of diversifying to, some of these are in developing countries who may be in need of basic phones (Hooley and Saunders, 1993). With changes in markets and economic situation, different people are having different tastes; the company should aim at establishing niche markets with the available markets. For instance, the growth of the youthful population can have a niche to have highly integrated phones that can perform different tasks; this should be in the areas that the company should be going. It should not shy off to take challenge from its competitors like Apple and Androids who are driving the market through innovations (Michael 1997). When the above opportunities have been seen and well ventured, the company is likely to have a growing profit gain as sales are likely to grow; on the other hand, when the company develops new products with times and aim at fulfilling consumer needs, it will likely win consumer confidence that grows loyalty with the company’s products. The viability of a new venture is dependent on how well the opportunity has been seen, tapped, and structures to venture in it have been developed (Earl, 1996).
Other products that Nokia should consider
Although the market is saturated with customer-focused products, Nokia still can come up with other innovative products to grow its portfolio.
An area that seems green and still not ventured in is solar charged laptops: many people today are using laptops in their day-to-day activities, however they are limited by the life of their batteries. Laptops are electronic gadget, which must depend with a reliable source of electricity to be recharged. The company should think of coming up with policies and develop the products. The innovation of solar-based laptops should target countries with high potential in laptop markets and they experience large spells of solar energy. They should be fitted with photoelectric cells that allow self-charging when exposed to solar energy. When such products are developed, the company is likely to remain competitive in the electronic gadgets industry. Caribbean and African countries have not been fully utilized, the company can still venture in the markets and dominate them; in most of these countries, the company should look into low income earners thus it should provide phones and other electronic gadgets that fit these markets.
Diversification to solar laptops and venturing more aggressively in Caribbean and African countries is in line with the company’s mission, vision, purpose, objective as well as positioning statement. It will lead to an increased sales, increased profits , as well as customer base; the net result is dominance in the electronic industry.
Earl, P. ,1996. Management, Marketing and the Competitive Process. Williston: American International Distribution Corporation.
Hooley J., Saunders, J. ,1993. Competitive Strategy: the Key to Marketing Strategy. New York: Prentice Hall. John, C. and Mowen, M.
, 2004. Consumer Behavior-A Framework. Beijing: Tsinghua University Press. Ketels, C.,2006. Michael Porter’s Competitiveness Framework: Recent Learnings and New Research Priorities.
Journal of Industry, Competition and Trade. 6(2),pp. 115-136 Kotler, P.
and Armstrong, G.,2001. Principles of marketing, 9th edn., Prentice Hall, London. Michael P. ,1997. Competitive Advantage: Creating and Sustaining Superior Performance.
Beijing: Hua Xia Press. Nokia Official website., 2011. Nokia [online]. Available at http://www.nokia.com/ (accessed on 15th May 2011).
Peter, D.,2006. Marketing Management and Strategy.
London: Post & Telecom Press. Reid, A. Plank, R. and Richard, E. ,2004.
Fundamentals of Business Marketing Research. New York: Best Business Books. Sadler, P., 2003. Strategic Management. Binghamton: New Down Press. Zi-Lin, L.
, Kwanghui and Pho-Kam, W., 2006. Entry and Competitive Dynamics in the Mobile Telecommunications Market. Research Policy.
35(8), pp. 1147-1165