Analysis of Nokia‘s Corporate, business, and marketing strategies

Table of Contents

Executive Summary

List of abbreviations

List of figures

1. Introduction
1.1 Nokia at a Glance
1.2 Components of a Strategy
1.3 Three Level of Strategy
1.4 Changing Environment Requires New Strategies

2. Corporate Strategy
2.1 Corporate Vision and Mission
2.2 Corporate Objectives

3. Business-Level Strategy
3.1 Generic Business-Level Competitive Strategies
3.2 Five-Forces Model of Competition

4. Marketing Strategy
4.1 Marketing Strategy and the Marketing Mix
4.2 Analysis of Nokia’s Marketing Strategy
4.3 Analysis of Nokia’s Marketing Mix

5. Analysis of Strategy Components
5.1 SWOT-Analysis
5.2 Generic Competitive Strategies

6. Conclusions

Bibliography

Executive Summary

“Change means making choices” Olli-Pekka Kallasvuo, Nokia CEO

Mobility is not just the fastest-growing technology in the history of mankind. With potentially four billion people being connected by mobile devices by the end of 2009, and many people having their first internet experience over a mobile device rather than a PC, mobility is changing people’s lives for the better. This is a huge responsibility and test for companies in the business. But Nokia’s CEO, Olli-Pekka Kallasvuo, is claiming that his company has always been good at adapting to both change and challenges.^[1] This work examines how well the world largest cell phone manufacturer is prepared to maintain customer’s continuous trust in their company and products; what is their strategy to continue success while changing.

The works examines in three steps Nokia’s strategy execution: the corporate strategy level, the business-level strategy, and the marketing strategy level. Finally, the analysis results are collectively examined in the SWOT-analysis before drawing the conclusion for which of the various generic competitive strategies Nokia is deploying.

List of abbreviations

illustration not visible in this excerpt

List of figures

Figure 1: Combined Typology of Business-Level Competitive Strategies Figure 2: The Five Forces

Figure 3: SWOT-Analysis of Nokia’s Strategies

1. Introduction

1.1 Nokia at a Glance

For most of Nokia’s 140-year history the Finish company was a sprawling conglomerate making toilet paper, rubber boots, wooden flooring, telephone cable, and a bunch of other unrelated products.^[2] The firm entered the telecommunication business in the 1960s when it started making radio transmission equipment, and it strengthened its position in that industry during the 1980s when it introduced the first fully digital

telephone exchange in Europe and introduced the world’s first mobile car phone; though at 22 pounds the phone wasn’t all that mobile and was marketed mainly as a business tool.

Today Nokia is the world leader in mobility, leading the convergence of mobility and the Internet. Nokia now makes a wide range of mobile devices, services and software that enable people to go beyond communications to navigation, music, video and more. Nokia is not only the world leader in mobile phones. They are also the world’s largest camera manufacturer and a leader in digital music with sales in more than 150 countries.^[3]

1.2 Components of a Strategy

A company’s strategy is management’s action plan for running the business and conducting operations. The crafting of a strategy represents a managerial commitment to pursue a particular set of actions in growing the business, attracting and pleasing customers, competing successfully, conducting operations, and improving the company’s financial and market performance.^[4]

Mullins, Walker and Broyd suggest in a more marketing-related approach that a strategy should specify (1) what objectives to be accomplished, (2) where – on which industries and product-markets to focus, and (3) how – which resources and activities to allocate to each product-market to meet environmental opportunities and threats and to gain competitive advantage.^[5] Thus a well-developed strategy contains five components, or sets of issues:

1. Scope
2. Goals and objectives
3. Resource deployments
4. Identification of a sustainable competitive advantage
5. Synergy

1.3 Three Level of Strategy

Mullins, Walker and Broyd claim that most organizations have a hierarchy of interrelated strategies, each formulated at a different level of the firm. The three major levels of strategy in most large organizations are (1) corporate strategy, (2) business- level strategy, and (3) functional strategies focused on a particular product-market entry.^[6]

In this work, all three strategy levels of Nokia will be identified, and later gathered and collectively examined in the Strength, Weaknesses, Opportunities, and Threats (SWOT) Analysis.

1.4 Changing Environment Requires New Strategies

With a well crafted and executed strategy a company can gain success, but whenever a company encounters disruptive changes in its environment, questions need to be raised about the appropriateness of its direction and strategy. If a company experiences a downturn in its market position or persistent shortfalls in performance, the company managers are obligated to investigate for causes and to take timely corrective actions.^[7]

Nokia as the largest mobile phone company in the world is facing to stronger competition; its long-term dominance is now challenged more than ever. Observers have begun asking whether the cutting edge that has turned Nokia into the No 1 vendor

still exists, as Nokia’s market share and revenues have been on the decline.^[8] Falling average sales prices and market share have had an impact and forced Nokia to further re-think its strategy towards developed and emerging markets.

The next chapters will analyze the potential of Nokia’s strategic planning to protect the firm’s financial success while business environment is changing.

2. Corporate Strategy

2.1 Corporate Vision and Mission

Olli-Pekka Kallasvuo, Nokia CEO, is manifesting in Nokia’s annual report 2007 that there are some very clear things all companies need to take care of if they are to take care of their customers. “And it’s not only in what a company does, its how the company does it. It’s how we listen to consumers and how we respond to their needs; how we select, empower and motivate the right people that work in our company; how we work with the partners that complement our own strengths; and how we live our values in everyday work and shape a culture of innovation. It’s getting this mix right in each company environment that makes for both a responsible as well as a strong- performing company, the two things needed to generate success that can be sustained.”^[9]

[...]

^[1] About Nokia (2008), p. 3

^[2] Mullins, Walker, Boyd (2008), p. 458

^[3] About Nokia (2008), p. 5

^[4] Thompson, Strickland, Gamble (2007), p. 3

^[5] Mullins, Walker, Boyd (2008), p. 40

^[6] Mullins, Walker, Boyd (2008), p. 41

^[7] Thompson, Strickland, Gamble (2007), p. 43

^[8] http://www.the-infoshop.com/study/kt32528-nokia.html

^[9] About Nokia (2008), p. 3