Nokia Group Strategic Management

TABLE OF CONTENT

TABLE OF CONTENT ............ ....................... ....................... ........................ ....................... ....................... ..................... .............. .......... .......... .......... .......... ....... .. 1 1. BUSINESS BACKGROUND............ ....................... ....................... ........................ ....................... .................... .............. .......... .......... ......... ......... ......... .... 2 2. VISION AND MISSION ............................... ................... ........................ ....................... ....................... ........................ ....................... ................... ............ .... 8 3. EXTERNAL FACTOR EVALUATION ............ ........................ ....................... ....................... ................... ............ .......... .......... .......... .......... ......... .... 9 4. INTERNAL FACTOR EVALUATION........... ....................... ........................ ....................... ..................... ............... .......... .......... .......... ......... ...... .. 15 5. STRATEGIES IN ACTION........... ....................... ....................... ....................... ........................ ....................... ...................... ................ .......... .......... .......20 6. STRATEGY ANALYSIS AND CHOICE ........... ....................... ....................... ....................... ........................ ................... ............ .......... ......... .... 26 7. IMPLEMENTING STRATEGIES STRATEGIE S MANAGEMENT: MANAGEMENT AND OPERATION ISSUES 29 8. STRATEGY STRAT EGY REVIEW, REVIE W, EVALUATION AND CONTROL ............ ........................ ....................... ....................... ...................... .......... 32 9. CONCLUSION............ ........................ ....................... ....................... ........................ ....................... ....................... ........................ ...................... ............... ........ ... 33 REFERENCES REFERE NCES............ ....................... ....................... ........................ ....................... ....................... ........................ ....................... ................ .......... .......... ......... ........ .... 34

Nokia “Connecting People” 1|Page

1. BUSINESS BACKGROUND a. Background

Nokia Nokia is a commu communic nicati ations ons based based compa company, ny, which which focuse focusess on mobile mobile teleph telephone one technology. Nokia is a world leader in mobile telecommunications driving the growth and sustainability of the broader mobility industry, which connects people to each other and the information that matters to them with easy-to-use and innovative products like mobile phones, devices and solutions for games, imaging, businesses and media. Nokia Corporation (Nokia) is a leading provider of mobile devices, telecom equipments, and mobile content services. Nokia Nokia Corpor Corporati ation on is one of the world' world'ss larges largestt teleco telecommu mmunic nicati ations ons equipm equipment ent manufacturers. It has since established a leading brand presence in many local markets, and business has expanded considerably in all areas to support customer needs and the growth of the telecommunications industry. Nokia also produces mobile phone infrastructure and other telecommunications equipment for applications such as traditional voice telephony, ISDN, broadband access, professional mobile radio, voice over IP, wireless LAN and a line of satellite receivers. Nokia provides mobile communication equipment for every major market and protocol, including GSM, CDMA, and WCDMA. Nokia “Connecting People” 2|Page

b. Organi Organiza zatio tion n Str Struct ucture ure Nokia “Connecting People” 3|Page

Group

Executive

Chairman Stephen Elop President and CEO of Nokia Corporation Esko Aho Executive Vice President, Corporate Relations and Responsibility Timo Ihamuotila Executive Vice President, Chief Financial Officer Mary T. McDowell Executive Vice President, Mobile Phones Tero Ojanperä Executive Vice President, Services, Mobile Solutions Niklas Savander Executive Vice President, Markets Alberto Torres Executive Vice President, MeeGo Computers, Mobile Solutions Anssi Vanjoki Executive Vice President & General Manager, Mobile Solutions Juha Äkräs Executive Vice President, Human Resources Dr. Kai Öistämö Executive Vice President, Chief Development Officer Board of Directors


Board

Chairman

Jorma Ollila Vice Chairman

Dame Marjorie Scardino •

Lalita D. Gupte

•

Dr. Bengt Holmström

•

Dr. Henning Kagermann

•

Per Karlsson

•

Isabel Marey-Semper

•

Risto Siilasmaa

•

Keijo Suila


c. History

From roots in paper, rubber, and cables, in just over 100 years Nokia becomes a powerful industrial conglomerate...

The newly formed Nokia Corporation is ideally positioned for a pioneering role in the early evolution of mobile communications...

As mobile phone use booms, Nokia makes the sector its core business. By the turn of the century, the company is the world leader...

Nokia sells its billionth mobile phone as the third generation of mobile technology emerges...



2. VISION AND MISSION Vision: “Connecting people" is now connecting people to what matters - whatever that means for

each person - giving them the power to make the most of every moment, everywhere, any time. Connecting the "we" is more powerful than just the individual. That's how Nokia is needed to help make the world a better place for everyone. Mission: To do this we will become the leading provider of mobile solutions. Our solutions

strategy leverages one of our greatest assets - a portfolio of outstanding devices, with unmatched scale and geographic reach. We couple them with smart services, integrated via an intuitive and seamless user experience. We differentiate these solutions offerings based on our in-depth consumer understanding, with a strong focus on social location (people and places). In a world where connecting people to what matters, empowers them to make the most of every moment. Our ambition is to become the leading provider of mobile solutions.


3. EXTERNAL FACTOR EVALUATION Opportunities:

1.

Nokia will cooperate with Microsoft Corp. to create windows phone 7 as the operating system. Emigration Stephen Elop to the Nokia predicted as a first step that Nokia to cooperate with Microsoft. The reason, Elop is a person who has the experience and good relationship with Microsoft. Elop served as a senior Microsoft executive for several years. Elop is believed will make a breakthrough in Nokia by developing Windows-based phones Phone 7.

0.05 2.62

%

phone

users

are

already

connecting

people.

0.4Internet experienced a very rapid progress in the mobile industry world. In fact, according to data from the ITU, two thirds of the world's mobile phone is already connected to the Internet. "According to data Smartphone survey, 62 percent of phones that connect to the Internet are connected by connecting people," said Senor VP of Global Jo Harrlom Nokia Smartphone, Nokia Showcase presentation, at the Conrad Hotel, Singapore on Monday (6/14/2010). The purpose of connecting people rather than referring to the tagline that is owned by Nokia, but this time mobile phone users mostly use it to communicate, social networking, email, etc. Still according to these data, 12 percent of mobile phone used to make entertaiment such as music and video, while 9 percent is used to surf in cyberspace. 3. New growth markets where Solar cell phone adoption still has room to go, including India and

others countries. The solar powered cell phone will enhance this convenience by allowing easier access to power that charges the phone. The ideal situation for the solar cell phone is to enable the phone to charge from direct sun light, light sources, and even candle light. Nokia “Connecting People” 9|Page

4. Nokia plans to develop Cheaper Hp as modem for connecting internet.

Nokia has developed cell phones as modem by connecting it with PC or Laptop, such as E71 via Bluetooth or USB. But it is just for the cell phones for high level of income. So by continuing to fulfill the market needs and wants, there is an opportunity in the market to develop cheaper cell phones in this case middle level of income as modem such as C-series.

0.08 5. Nokia plans to upgrade CDMA cell phones.

As we know that, people would rather use GSM cell phones with numerous feature, and then CDMA cell phones as the complement when you have had GSM cell phone. But the availability of CDMA cell phone cannot be underestimated. There is an opportunity in the market to upgrade CDMA cell phones by improving its features, upgrade the camera capabilities or improve the internet connection. 6.Internet connection becomes one of consideration for mobile phone purchase decision. Internet is a global system of interconnected computer networks. It makes people can get and share information over the world. The advanced technology makes internet is not just only “want” but now become “need”, cell phone with internet connection become priority to buy cell phone. And also the price can be reached by low to up level of income.

7.Nokia is the market leader of hand phones. From the point of quantity and all of its type, Nokia has the largest number of sales in the world.

Nokia “Connecting People” 10 | P a g e

Threats:

1. The influence of BlackBerry Messenger trend toward consumer preference. As Blackberry Smartphone has the messenger application (Blackberry Messenger), NOKIA also have the messenger application which called “Nokia Messenger”. The problem in here is they didn’t socialize to their customer that Nokia’s product also provides the messenger application just like Blackberry Smartphone. There are still a lot of Nokia’s customers who know that, but getting confused of how to activate it. That’s make the competitor one step ahead from Nokia. 2. Dual SIM card issues. Now days, there are so many cell phone companies that offer cell phone with Dual SIM card as the hallmark of their product, even though the cell phone with the low price product such as GStar, Nexian She, etc. Actually, Nokia also have kind of product with dual SIM card, but it can’t switch two SIM card at a time, only one SIM card can active at a time. Compared with the cheap cell phone that competitors offered which can switch 2 SIM card at a time, Nokia’s product is left behind. 3. The emergence of Google Android as the operating system. Unit sales for Android OS Smartphone ranked first among all Smartphone OS handsets sold in the U.S. in the second and third quarters of 2010, with a third quarter market share of 43.6%. Android has a large community of developers writing application programs that extend the functionality of the devices. There are currently over 100,000 apps available for Android. Nokia “Connecting People” 11 | P a g e

0.1 2 0.12 4. Sales of competitor’s Smartphone are going up. Nokia is struggling to battle with new rivals Apple and Blackberry maker Research in Motion (RIMM.O) at the high end of the cell phone market, and sees a cheaper price as its strongest weapon to hold on to market share. Nokia is enduring a very hard time since Iphone and Blackberry is taking over the Smartphone market. iPhone, Blackberry and Android are surging ahead with software updates while Symbian cannot afford any delays. NPD Group's Smartphone survey puts total iPhone's sales for the first quarter at 21%. That's third in the ranking. Second position goes, for the first time, to the Android platform, with 28% and the first rank belongs to BlackBerry, with 36%.

3 0.15

1

0.03 5. China’s hand phone is entering the market aggressively.

China continues to grow rapidly and tries to grab the market share. They are offers the mobile phone that have many features with the cheap price. The price of China’s mobile phone can be half of the price of Nokia’s Mobile phone product that mostly has the same features. 6. Nokia’s Brand image is no longer representing customer’s perception about hand phone. At the early stages, Brand Image is not that important for some kind of product (especially phone). Nowadays, Consumer behavior has a tendency to prefer the product that can offer a lot of facilities with the attractive features and also with the cheap price. Even tough the product is not popular or famous, but they just look into what the product can offer to them. Actually, there are some people who still choose the branded product rather than unpopular product with the lower price. But still, the amount of cheap product with the unpopular brand can bite that branded product. Nokia “Connecting People” 12 | P a g e

The External Factors Evaluation (EFE) Matrix for Nokia Corporation Key External Factors

Weighted

Weight

Rating

windows phone 7 as the operating system. 2. 62 % phone users are already connecting people. 3. New growth markets where Solar cell phone

0.06

3

0.18

0.13

4

0.52

adoption still has room to go, including India and others

0.08

4

0.32

0.05

2

0.10

0.05

2

0.10

0.11

3

0.33

0.09

4

0.36

Score

Opportunities

1. Nokia will cooperate with Microsoft Corp. to create

countries. 4. Nokia plans to develop Cheaper Hp as modem for connecting internet. 5. Nokia plans to upgrade CDMA cell phones. 6. Internet connection becomes one of consideration for mobile phone purchase decision. 7. Nokia is the market leader of hand phones. Threats


1. The influence of BlackBerry Messenger trend toward consumer preference. 2. Dual SIM card issues. 3. The emergence of Google Android as the operating

0.12

4

0.48

0.05

4

0.20

system. 4. Sales of Competitior’s Smartphone are going up. 5. China’s hand phone is entering the market aggressively. 6. Nokia’s Brand image is no longer representing

0.06

3

0.18

0.09 0.07

4 4

0.36 0.28

0.04

1

0.04

customer’s perception about hand phone. Total


1.00

3.45

4. INTERNAL FACTOR EVALUATION

Strengths:

1. One of the 20 top brands in the world. Nokia named the 6 th place of Best Global Brand. Fashionable designs and low-cost models for the developing world enabled the mobile phone maker to regain ground against competitors. 2. Largest network of distribution, selling and consumer services in more than 150 countries. Nokia Siemens Networks (previously Nokia Networks) provides wireless and fixed network infrastructure, communications and networks service platforms, as well as professional services to operators and service providers. Nokia Siemens Networks focuses in GSM, EDGE, 3G/W-CDMA and WiMAX radio access networks; core networks with increasing IP and multi-access capabilities; and services. On June 19, 2006 Nokia and Siemens AG announced the companies are to merge their mobile and fixed-line phone network equipment businesses to create one of the world’s largest network firms, called Nokia Siemens Networks. The Nokia Siemens Networks brand identity was subsequently launched at the 3GSM World Congress in Barcelona in February 2007. As of March 2009, Nokia Siemens Networks serves more than 600 operator customers in more than 150 countries, with over 1.5 billion people connected through its networks. 3. Nokia is the best hand phone in term of environment friendly. Now Nokia has came up with a solar charger, a charger that can be used outdoors without consuming electricity. There are many advantages of using solar powered charger. Solar charger for Nokia is environment friendly; it has been awarded by the Environment Protection Agency in the US for Energy Star because of its energy efficiency as it exceeds the EPA standards by only using 50-70% less than the energy star requirement. 4. Wide range of products for 3 levels of income; low, middle and high-level of income. Nokia offered several types of hand phone with reasonable prices for anyone whether they in low level income, middle level income, and high-level income.


5. High Quality in term of raw materials. Nokia uses recyclable materials, mainly wood fibers in its product packages. Coloring and patterning help cardboard to support products' image and their message. Some 35-100% of materials are also made of recycled fibers. Their availability varies from region to region. New packaging materials are sought continuously. High quality packages can be made of several natural fibers. Flax packaging is already used; agricultural waste as a raw material as well as bioplastics is being studied. The use of agricultural waste brings challenges related to uniform quality and seasonal availability of raw materials, while bioplastics are not easily recycled. Bioplastics should be composted, and cannot therefore be recycled with other plastics. When mixed with other plastics, bioplastics are in fact more harmful than they are useful. Also the recycling of plastics is a challenge in general since there is no advanced recycling infrastructure in place yet. For instance by replacing some plastics with cardboard in Nokia's accessory packages the amount of plastic was decreased by 60%. Plastics cannot be replaced totally though, since an accessory should be visible and protected from dust. 6. Stephen Elop as the new CEO of Nokia Corp. He has a proven track record and is well-known and respected within the software industry. He also has experience in managing change and complex software projects. Prior to working at Microsoft and Juniper Networks, Stephen worked for Adobe following its acquisition of Macromedia. Nokia is transitioning from a hardware manufacturer of mobile devices to a software and solutions business. Picking someone with the right experience is crucial in helping Nokia to make that transition quickly and effectively. Stephen’s background in the software industry is one of his key strengths. More importantly, his most previous experience has been during times of substantial transformation in large companies. The board believes this combination of experience makes him the best candidate to take Nokia forward.


7. Ovi-store application reaches more than 165 million users. Ovi, the application store from Nokia, now has over 165 million users, and the number of downloads per day has risen to 3 million, from the 2.3 million last month. This is quite an encouraging statistic for Nokia, who has been struggling a bit to keep up with the Smartphone market. The Ovi Store has seen a lot more people sign up recently and the numbers just keep going upwards every day, with 90% of store visits resulting in an app download. Nokia is still the top mobile manufacturer in the world, selling more mobiles than the other brands, which have better features than Nokia does. 8. Nokia is developing new operating system. Unlikely partners Intel and Nokia have joined forces in an attempt to fend off increasing mobile competition from Google, Apple and Microsoft. The two companies have merged their mobile Operating System (OS) into one entity: MeeGo. You can expect the first mobile devices running on MeeGo later this year. MeeGo is a merger of Nokia’s Maemo OS and Intel’s Moblin OS, both of which are Linux based. Maemo is the platform that runs the Nokia N900, while Moblin runs on phones such as the LG GW990 and netbooks from Foxconn, Acer and others. The operating system will support both Intel's Atom and ARM architectures. It’ll be built around the Moblin core OS, but it will utilize Nokia’s Ovi Store for its apps. It’ll be hosted by the Linux Foundation as an open-source project. And MeeGo will not just be for mobile phones either, but is intended to work on netbooks, tablets and televisions as well.


Weaknesses:

1. Nokia is no longer up to date. A good example is clamshell phones which are preferred by many customers. Nokia was reluctant to produce a clamshell until this year, when it launched its first model. 2. Nokia Smartphone has fewer features as compared to others.

In the market, based on the customer’s experience found that Nokia Smartphone has fewer features as compared to competitor has, such as Blackberry and iPhone as the Nokia Smartphone competitor. 3. The decline of Symbian as the operating system. Competitive pressure from its competitors, such as RIM and Apple, and the continued weakness of Nokia's high-end device sales have negatively impacted Symbian's share. 4. Sales of Nokia Smartphone decrease.

Nokia has released their Q2 2010 results, reporting an operating profit of €295 million, with net sales €10.0billion (up 1% Year-on-Year). Nokia's device and service division's profit was €643 million, down 16% year on year. Nokia's Smartphone performance at the high end remains poor in the face of competition from Apple, RIM and Android powered devices.


The Internal Factors Evaluation (IFE) Matrix for Nokia Corporation Key Internal Factors

Weighted

Weight

Rating

0.07

3

0.21

0.11

4

0.44

0.05

3

0.15

0.11

4

0.44

0.09 0.06

4 3

0.36 0.18

0.06

4

0.24

Score

Strengths

1. One of the 20 top brands in the world. 2. Largest network of distribution, selling and consumer services in more than 150 countries. 3. Nokia is the best hand phone in term of environment friendly. 4. Wide range of products for 3 levels of income; low, middle and high level of income. 5. High Quality in term of raw materials. 6. Stephen Elop as the new CEO of Nokia Corp. 7. Ovi-store application reaches more than 165 million users. 8. Nokia is developing new operating system.

0.07

3

0.21

0.09

2

0.18

0.09

2

0.18

0.11 0.09

1 2

0.11 0.18

Weakness

1. Nokia is no longer up to date. 2. Nokia Smartphone has fewer features as compared to others. 3. The decline of Symbian as the operating system. 4. Sales of Nokia Smartphone decrease Total


1.00

2.88

5. STRATEGIES IN ACTION a. Long-Term Objectives

Long-Term Objectives represent the results expected from pursuing certain strategies.

Strategies represent the actions to be taken to accomplish long-term objectives. Nokia has aimed from the beginning to become Market Leader in Telecommunications Field, which in the current statistic is already has more than 50% of market in the world. Clearly stated and communicated objectives are vital to success for many reasons. Without long-term objectives, an organization would drift aimlessly toward unknown ends. b. Types of Strategies that used by Nokia Corporation: 1.

Forward Integration- Gaining ownership or increased control over distributors or

retailers: •

Nokia acquired online music distributor Loudeye Corporation on August 8,

2006. 2. •

Backward Integration- Seeking ownership or increased control of a firm’s suppliers:

Nokia acquired Sega.com to develop the Nokia N-Gage device on September 22, 2003.

•

Nokia acquired Intellisync, a provider of data and PIM synchronization

software on November 16, 2005.

•

Nokia acquired Twango, the comprehensive media sharing solution for organizing and sharing photos, videos and other personal media in July 2007.

•

Nokia acquired Enpocket, a supplier of mobile advertising technology and services in September 2007.

•

Nokia bought Navteq, a U.S.-based supplier of digital mapping data in October

2007. Nokia “Connecting People” 20 | P a g e

•

Nokia acquired OZ Communications, a mobile messaging solution provider in

September 2008.

•

Nokia acquired certain assets of cellity, a privately owned mobile software

company on July 24, 2009.

•

Nokia acquired certain assets of Plum Ventures, Inc which develops and

operates a cloud-based social media sharing and messaging service for private groups on September 11, 2009.

•

Nokia acquired Novarra, the mobile web browser firm from Chicago on March

28, 2010.

•

Nokia acquired MetaCartaa, the specialist in geographic intelligence that is

expected to boost the phone maker's push to expand the location-based services it offers to its mobile device users on April 10, 2010. 3.

Horizontal Integration- Seeking ownership or increased control over competitors: •

Nokia and Siemens AG merged their mobile and fixed-line phone network

equipment businesses to create one of the world’s largest network firms, Nokia Siemens Networks on June 19, 2006. 4.

Market Development-Introducing present products or services into new geographic

Area: •

Nokia opened its new mobile phone factory in Komárom, Hungary on May 5,

2000.

•

In

March

2007,

Nokia

signed

a

memorandum

County Council, Romania to open a new plant near the city in Jucu commune.


with Cluj

5.

Product Development-Seeking increased sales by improving present products or

services or developing a new ones: •

•

Nokia launched its Nokia 1100 handset in 2003. In November 2007, Nokia announced and released the Nokia N82, its first

Nseries phone with Xenon flash.

•

At the Nokia World conference in December 2007, Nokia announced their

"Comes With Music" program: Nokia device buyers are to receive a year of complimentary access to music downloads. The service became commercially available in the second half of 2008.

•

In 2008, Nokia released the Nokia E71 which was marketed to directly compete

with the other BlackBerry devices offering a full keyboard and cheaper prices.

•

On September 2, 2009, Nokia launched two new music and social networking

phones, the X6 and X3.

•

On September 10, 2009, Nokia unveiled a new handset 7705 Twist, a phone

with a sports square shape that swivels open to reveal a full QWERTY keypad. 6.

Related Diversification-Adding new but related products or services: •

Nokia announced in August 2009 that they will be selling a high-end Windows-

based mini laptop called the Nokia Booklet 3G. 7.

Unrelated Diversification-Adding new, unrelated products or services: •

Nokia Productions was the first ever mobile filmmaking project directed

by Spike Lee. Work began in April 2008, and the film premiered in October 2008.


8.

Divestiture-Selling a division or part of an organization:

Date

Divestiture target

Nokia unit

July 12, 2010

MetaCarta, Inc.

Nokia Corporation

December 1, 2009

Venyon

Nokia Corporation

October 16, 2009

Nokia's Symbian Professional Services

Nokia Corporation

April 14, 2009

Nokia's security appliance business

Services

June 16, 2008

Nokia's line fit automotive business

Devices

June 02, 2008

Nokia's Adaptation Software R&D entity

Nokia Corporation

May 16, 2008

Nokia's Identity Systems

Services & Software

3G chipset development

Nokia Corporation

November 5, 2007 September 5, 2005

Professional Mobile Radio business

Networks

March 18, 2005

Nextrom Holding

Nokia Corporation

August 30, 2001

Part of mobile core related R&D

Nokia Networks

March 13, 2001

Narrowband access products

Nokia Networks

June 13, 2000

Cabling and electromechanical units

Nokia Networks

January 17, 2000

Nokia Display Products' branded business

Nokia Display Products

January 10, 2000

Monitor manufacturing unit in Hungary

Nokia Display Products

November 1, 1999

SHD/DWDM business

Nokia Networks Nokia Communications

October 1, 1999

Salcomp Oy

September 9, 1998

Mobile radios and printed circuit boards

Products Nokia Networks

August 7, 1998

LK-Products Oy

Nokia Mobile Phones

March 3, 1998 December 23,

Autoliv Nokia AB

Nokia Industrial Electronics

Loudspeaker Operations

Nokia Industrial Electronics

1997 February 7, 1997

Tuner Operations

July 17, 1996

Television production

March 18, 1996

Cable Business / NKF Holding NV


Nokia Multimedia Network Terminals Nokia General Communications Products Nokia Communications Products

c. Means for Achieving Strategies that used by Nokia Corporation: 1.

Joint Venture-Occurs when two or more companies form a temporary partnership for

the purpose of capitalizing on some opportunity: •

On February 2006, Nokia and Sanyo announced a memorandum of understanding to create a joint venture addressing the CDMA handset business. But in June, they announced ending negotiations without agreement. Nokia also stated its decision to pull out of CDMA research and development, to continue CDMA business in selected markets.

2.

Merger- Occurs when two organizations of about equal size unite to form one

enterprise: •

On June 19, 2006, Nokia and Siemens AG announced the companies would merge their mobile and fixed-line phone network equipment businesses to create one of the world’s largest network firms, Nokia Siemens Networks. Each company has a 50% stake in the infrastructure company, and it is headquartered in Espoo, Finland. The companies predicted annual sales of €16 billion and cost savings of €1.5 billion a year by 2010. About 20,000 Nokia employees were transferred to this new company.

3.

Acquisition-Occurs when a large organization purchases a smaller firm, or vice versa:

•

On September 22, 2003, Nokia acquired Sega.com, a branch of Sega which became the major basis to develop the Nokia N-Gage device.

•

On November 16, 2005, Nokia and Intellisync Corporation, a provider of data and PIM synchronization software, signed a definitive agreement for Nokia to acquire Intellisync. Nokia completed the acquisition on February 10, 2006.

•

On August 8, 2006, Nokia and Loudeye Corp. announced that they had signed an agreement for Nokia to acquire online music distributor Loudeye Corporation for approximately US $60 million. The company has been developing this into an online music service in the hope of using it to generate handset sales. The service, launched on August 29, 2007, is aimed to rival iTunes. Nokia completed the acquisition on October 16, 2006.


•

In July 2007, Nokia acquired all assets of Twango, the comprehensive media sharing solution for organizing and sharing photos, videos and other personal media.

•

In September 2007, Nokia announced its intention to acquire Enpocket, a supplier of mobile advertising technology and services.

•

In October 2007, pending shareholder and regulatory approval, Nokia bought Navteq, a U.S.-based supplier of digital mapping data, for a price of $8.1 billion. Nokia finalized the acquisition on July 10, 2008.

•

In September, 2008, Nokia acquired OZ Communications, a privately held company with approximately 220 employees headquartered in Montreal, Canada.

•

On July 24, 2009, Nokia announced that it will acquire certain assets of cellity, a privately owned mobile software company which employs 14 people in Hamburg, Germany. The acquisition of cellity was completed on August 5, 2009.

•

On September 11, 2009, Nokia announced the acquisition of "certain assets of Plum Ventures, Inc, a privately held company which employed approximately 10 people with main offices in Boston, Massachusetts. Plum will complement Nokia’s Social Location services".

•

On March 28, 2010, Nokia announced the acquisition of Novarra, the mobile web browser firm from Chicago. Terms of the deal were not disclosed. Novarra is a privately-held company based in Chicago, IL and provider of a mobile browser and service platform and has more than 100 employees.

•

On April 10, 2010, Nokia announced its acquisition of MetaCarta, whose technology was planned to be used in the area of local search, particularly involving location and other services.


6. STRATEGY ANALYSIS AND CHOICE Strengths

1.

The Strengths-Weaknesses-OpportunitiesThreats (SWOT) Matrix for Nokia Corporation

One of the 20 top brands in the

Weaknesses

1.

Nokia is no longer up to date.

world.

2.

Nokia Smartphone has fewer

2.

features as compared to others.

Largest network of distribution,

selling and consumer services in more than

3.

150 countries.

operating system.

3.

Nokia is the best hand phone in term

of environment friendly.

4.

4.

The decline of Symbian as the

Sales of Nokia Smartphone

decrease.

Wide range of products for 3 levels

of income; low, middle, and high level of income. 5.

High Quality in term of raw

materials. 6.

Stephen Elop as the new CEO of

Nokia Corp.

7.

Ovi-store application reaches more

than 165 million users. 8.

Nokia is developing new operating

system. Opportunities

1.

Nokia will cooperate with

SO Strategies

1.

Decide to cooperate with Microsoft

WO Strategies

1.

Use Windows Phone 7 as the

Microsoft Corp. to create windows

Corp. to create windows phone 7 as the

operating system for high level income

phone 7 as the operating system.

operating system. (S7, O1).

cell phone. (W1, O1).

2.

2.

2.

62 % phone users are already

Develop Nokia C Series base on its

Use MeeGo as the operating system

connecting people.

successful sales in the market by adding

for middle-high level income cell

3.

new type of Nokia C Series. (S5, O2, O4,

phone. (O2. W2, W3, W4).

New growth markets where Solar

cell phone adoption still has room to go,

O6).

including India and others countries.

3.

4.

information about cell phones for Nokia

Nokia plans to develop Cheaper

Hp as modem for connecting internet.

5.

Create Nokia Magazine to provide

users.

Nokia plans to upgrade CDMA

cell phones. 6.

Internet connection becomes one

of consideration for mobile phone purchase decision. 7.

Nokia is the market leader of hand

phones. Threats

1.

The influence of BlackBerry

Messenger trend toward consumer preference. 2.

Dual SIM card issues.

3.

The emergence of Google Android

as the operating system.

4.

Sales of Competitor’s Smartphone

are going up.

5.

China’s hand phone is entering the

market aggressively.


ST Strategies

1.

Simplify Nokia Messenger

WT Strategies

1.

Develop the features inside 3

Application. (S8, T1).

Operating System (Symbian, MeeGo,

2.

Windows Phone 7) of Nokia. ( T1, T2,

Replace the old operating system of

the middle to high level income cell phones type with the new operating system – MeeGo with competitive price. (S9, T2, T3, T6).

T3, T4, T5, T6, T7, W1, W2, W3, W4).

6.

Nokia’s Brand image is no longer

representing customer’s perception about hand phone.

The Internal – External (IE) Matrix for Nokia Corporation

THE IFE TOTAL WEIGHTED SCORES Strong 3.0 to 4.0

4.0

3.0

Strong 3.0 to 4.0

THE EFE TOTAL WEIGHTED SCORES

Average 2.0 to 2.99

3.0 Average 2.0 to 2.99

Weak 1.0 to 1.99

2.0

1.0

I

II

III

IV

V

VI

VII

VIII

IX

2.0 Weak 1.0 to 1.99

1.0

The IFE total weighted score : 2.88 The EFE total weighted score: 3.45 Result of Intersection

: Cell II - Grow and Build Strategies

From the result above, the best strategies that Nokia Corporation can implement are: 1. Market Penetration 2. Product Development


Strategic Plans

1. Decide to cooperate with Microsoft Corp. to create windows phone 7 as the operating system. 2. Develop Nokia C Series base on its successful sales in the market by adding new type of Nokia C Series. 3. Simplify Nokia Messenger Application. 4. Replace the old operating system of the middle to high level income cell phones type with the new operating system – MeeGo with competitive price. 5. Use Windows Phone 7 as the operating system for high level income cell phone. 6. Use MeeGo as the operating system for middle-high level income cell phone. 7. Develop the features inside 3 Operating System (Symbian, MeeGo, Windows Phone 7) of Nokia. 8. Create Nokia Magazine to provide information about cell phones for Nokia users.


7. IMPLEMENTING STRATEGIES MANAGEMENT: MANAGEMENT AND OPERATION ISSUES a. Annual Objectives Nokia Corporation’s Hierarchy of Aims

LONG-TERM CORPORATE OBJECTIVE By 2015, more than 90% of world population will experience the full power of being connected everywhere and any time.

DIVISION I: Mobile Solutions ANNUAL OBJECTIVE Make 5 Innovations of multimedia tools/applications this year and 7 Innovations next year.

DIVISION II: Mobile Phones ANNUAL OBJECTIVE Provide best device in the market that can be reachable all 3 level of income with technology innovations to support the full power of being connected in 2015

DIVISION III: Markets ANNUAL OBJECTIVE Spend 10% of net income to acquire the greater marketing effort to increase brand image Nokia.

R & D Annual Objective

Develop Nokia C-Series that is successfully marketed. Production Annual Objective

Increase Production Efficiency Marketing Annual Objective

Increase the marketing effort in Price, Product, Place and Promotion. Finance Annual Objective

Increase the annual income. Personnel Annual Objective

Increase employee job performance. Nokia “Connecting People” 29 | P a g e

b. A Hierarchy of Policies Corporate Strategy

Develop sophisticated cell phones with the greater marketing effort. Supporting Policies

1. Make limited edition for one of C-Series development. (This policy acquires to increase the marketing effort and brand image of Nokia in the market.) 2. Make cooperation with network provider to promote the new cell phones in the market. 3. Create Nokia Magazine to provide information about cell phones for Nokia users.

4. Become main sponsor for upcoming movies or international great events. Production Department Objective

Develop new cell phones with the features that can be compared with the competitor’s product. Supporting Policies

1. Cooperate with Microsoft to develop Windows Phone 7 for Nokia Smartphone; for oplevel of income. 2. Cooperate with Intel to develop MeeGo as the new operating system for middle to high

level of income’s cell phones. 3. Maintain Symbian as the operating system for low level of income’s cell phones.


c. Resource Allocation Strategy Plan

Financial Resources

1. Decide to cooperate with Microsoft Corp. to create windows phone 7 as the operating system. 2. Develop Nokia C Series base on its successful sales in the market by adding new type of Nokia C Series. 3. Simplify Nokia Messenger Application. 4. Replace the old operating system of the middle to high level income cell phones type with the new operating system – MeeGo with competitive price. 5. Use Windows Phone 7 as the operating system for high level income cell phone. 6. Use MeeGo as the operating system for middle-high level income cell phone. 7. Develop the features inside 3 Operating System (Symbian, MeeGo, Windows Phone 7) of Nokia. 8. Create Nokia Magazine to provide information about cell phones for Nokia users.


Human Resources

Physical

Technology

Resources

Resources

8. STRATEGY REVIEW, EVALUATION AND CONTROL

Evaluating Strategies 1. Consistency

Nokia as the market leader in cell phones market; and from the beginning, Nokia consistent to its objectives to connect people; that is why Nokia always try to increase the performance to provide best device in the market. By continuing the objective in connecting people, Nokia need to expand and, improve the strategy plan depends on the external and internal factors. 2. Consonance

To evaluate the strategy plans and policies, it is needed to set the trends in the market. The external and internal factors involve the internet connection as “Need” for customer/user in using cell phones. Internet trends such as the social networking, facebook, twitter, etc. So the strategy plan that is developed must support the technology in terms of internet connection, for example the innovations in operating system. 3. Feasibility

The strategy plan attempted the human, financial and technology resources, and mostly attempted in technology resources, because in this case the internet connection trends. 4. Advantage

There is a perfect competition in the cell phones market. The main competitive advantage is the technology trends that can motivate Nokia to make technology innovations in order to get customer attentions. And the positional advantage, Nokia tends to be self sustaining as the market leader in cell phones market, because Nokia sell products in 3 level of income, so it is reachable by all the targeted market.


9. CONCLUSION

Basically, Nokia is still the market leader, but now Nokia faces a big challenge. In the 3 target market, Nokia has a lot of tough competition. In the lower classes, Nokia compete with China cell phone, in the middle class, Nokia compete with Samsung and Sony Ericsson, while in the upper class (Smartphone category), Apple, RIM, and Google Android become the main competitor Nokia. Nokia has an operating system that is outdated compared with competitors in the Smartphone category. This affects the decrease in sales of Nokia phones. In essence, the image of the Nokia brand has fallen. So it needs a strategy management to maintain its position as market leader of the three target markets. As a company engaged in the technology, Nokia is consistent with the long-term goal of the company to connecting people, even in 2015, Nokia will make a full power of being connected. There are 2 core strategy of Nokia, product development and market penetration. In product development, Nokia needs to added value in each product. Nokia also needs to develop products with prices that can be achieved by the low-middle income level with a quality that can be compared with the Smartphone, such as C3 cell phone that has been successes in the market. So Nokia could develop Nokia C-Series. On the penetration of the market, Nokia needs to develop a marketing effort, because the brand image of Nokia has fallen. For example by making Nokia magazine, or become a sponsor in the upcoming movie and a big international event. Expected to focus on strategy, Nokia can be successful in the marketplace, not only become the market leader in entire market, but the market leader in each respective class of the targeted market.


Nokia Group Strategic Management

Recommend Documents