The Nokia Corporation is a multinational information technology and communications corporation from Finland, its headquarters are situated in Espoo, Keilaniemi. The principal products of the company are portable IT devices and mobile telephones. Nokia also offers other services like messaging and media, music, games, applications, free digital map navigation and information through Nayteq, which is its fully owned subsidiary. Nokia also works jointly with Siemens in a venture, which provides services and equipment for telecommunications network, i.e. the Nokia Siemens Network. Nokia has been the largest mobile phones vendor in the world for 14 years since 1998. It, however, suffered declining market shares over the last five years resulting from growth in Smartphones use from other vendors like Android Operating systems from Google and iPhone from Apple. Nokia has three main divisions in its business groups, for instance, markets, mobile phones and mobile solutions.
The Corporate Development Office provides operational support to these three units. The responsibility of the portfolio of Nokia’s mobile computers and smart phones lies with the mobile solutions branch. This also includes the enterprise-class devices and multimedia that are more expensive. The mobile phones division is responsible for the portfolio of Nokia’s affordability in mobile phones. The markets division is responsible for sales channels, supply chains, marketing and branch functions of the Nokia Corporation. The company has many subsidiaries, the largest of them being - in revenue terms - the Chicago, Illinois-based Nayteq that provides digital maps and locations. Other subsidiaries of notable strength are Vertu and Qt Software. The history of the Nokia Corporation goes all the way back to 1865 during its incorporation in Nokianvirta and Tammerkoski, southern Finland where they manufactured mobile phones and telecommunications systems.
Nokia dedicates its operations to enhance productivity and people’s lives by providing secure and easy-to-use products such as mobile phones. In addition, it provides solutions for media, games, imaging, businesses and operators of mobile networks. This enabled the company make a net sales of €29.5 billion in 2003. The company had about sixteen facilities for manufacturing its products located in nine countries across the globe as at that time. It also had research and development centers (D&D) in eleven countries by the end of the said year. Furthermore, it had approximately 51,000 employees in all their worldwide stations.
The leadership of Nokia Plc is what spirited the growth of the Nokia Corporation into a giant of mobile telephony with mobile phones, Smartphones, and other communication devices trading all over the world. Strategic management mechanisms set up by the leadership in place enabled the company establish numerous firms in different countries all over the globe. Incidentally, they tapped in the resources available in those areas and the low cost of labor for production, consequently a low cost of production and a profitable return on investment. The company operates fourteen manufacturing facilities in Mexico, Hungary, Germany, Finland, China, Brazil, the United Kingdom, India, and the Republic of Korea. There are several theories of leadership, which the company could apply to make their investment grow and maintain its competitiveness in the market. These are the Great Man theory, the Trait theory, the Contingency theory, the Situational Theory, the Behavioral theory, the Participative theory, the Management theory, and the relationship theory. The situational theory is the theory underpinning the link between strategic management and leadership of the Nokia Plc.
This theory proposes that leaders select the best course of action in a given situation based on the existing variables. In this case, leaders at different manufacturing plants of Nokia choose the best action based on the situational variable at their locations that would result to the highest yield of the company and keep it above the competition. This could be in the wake of competition, i.e. a new entrant into the market, or an innovation or discovery within the firm. Leaders here can apply autocratic style of leadership, which is more appropriate for decision making since they are more knowledgeable and have the necessary experience. They can also apply the democratic style of leadership where they allow the members of staff to participate in groups of skilled experts. This makes it more efficient in combating the confronting situation. These two leadership styles would propel Nokia to tremendous growth and development into market leadership and strength (Mintzberg, 2003).
The impact of the situational theory on the marketing strategies of Nokia’s Plc is that it makes the company change its promotional mix and strategies. The company bases its marketing strategy in line with the type of leadership in place in order to eliminate cases of conflict of interest and style. For example, in a situational case, the marketing department has to come up with the best strategy to take advantage of the opportunities provided by the business and market dynamics, cushion its operations from recession and financial crisis within the market, as well as protecting itself from increased competition and hedging from other issues raised through globalization. These could be foreign currency risks, currency transfer, and foreign exchange fluctuations.
In case there is an opportunity, the company adapts promotional mix that enhances and increases its market share through extensive advertising campaigns, sales promotion, public relations, personal selling and publicity. A leadership strategy that would support the future relations and business operations of Nokia would be the participative leadership. This is the case when the management allows free interaction between managers and junior employees to facilitate free, fair and unbiased flow of information from one department to another. This works best in a flat organization and in an open style of office. In today’s world of fast changing advances in technology, the company has to promote creativity and innovation both from within and outside its organization for it to come up with the best mobile solutions for its consumers and enterprise markets.
The current leadership of Nokia requires promoting creativity and innovation among their employees and also allowing idea generation, idea acceptance and supporting it if it may lead to growth of the industry. To this end, Nokia established an academy of information technology experts in its youths who get support to brainstorm and come up with new games, applications, and operating systems that would enhance the connectivity and services offered by the Nokia devices. They enjoy synergistic privileges through working in groups, and this allows the company to generate the latest and most advanced applications for the mobile market (Achua & Lussicer, 2009).
If I were the CEO of Nokia Plc, I would develop the leadership skill within the company for its future advancement by introducing systems that allow for innovation and creativity. This would be through the various models of innovation, such as the linear model, which comprises of the technology push and market pull linear models. The other models of innovation include the simultaneous coupling model and the interactive model of innovation. The latter allows free interaction among all the stakeholders of the company to generate new and advanced products for their mobile markets. I would also introduce department that would monitor and evaluate the development process of new products and services in the company. This would ensure the proper development of new applications, phones, operating systems, or other devices that would take the market by storm and boost sales and revenues of the company. This would also put Nokia at the top of the chart for all mobile phone applications.
These processes include idea generation, idea screening, concept testing, business analysis, product development, test marketing, commercialization, monitoring and evaluation. These new products would pass through the various models of development such as the departmental stage model, the activity stage model, cross-functional team model, decision stage model, conversion process model, response model, and network model. Further developments in the learning organization of the firm would also make it very competitive in the market. The concept of the learning organization enables the company to learn and adapt to new practices and procedures that lead to its growth, profitability and development for their employees and other support staff. Learning organizations have five disciplines, which include systems thinking, personal mastery, mental models, building a shared vision, and team learning. These methods would enable leaders develop their skills.
Nokia carries out strategies that result into good profitability and effective market share. Its commitment to telecommunications aside from other businesses enabled it become a market leader. It employed three core processes, which were customer commitment process, product process, and support and management process. The measurement of these processes was on several perspectives such as customer satisfaction, people involvement, operative efficiency, net profit, growth, market share and a strong market position. Nokia’s recent strategy aimed at maintaining a strong market position and maximizing its revenues. In order to achieve this, the company uses selective pricing to strengthen its competitiveness and increase its market share. Prioritizing customer relations, demand and supply management, R&D efficiency, product offering, and its ability to offer new and effective solutions make the company a reputable player in the industry.
Nokia’s corporate strategy promotes the growth of sales and provision of mobile support services that aid their consumers do their day-to-day activities, be it in business or in the social world. Nokia’s current theme is ‘Connecting People’. Therefore, their strategic goal is to ensure it connects people with their friends, families, or business partners from wherever they are. To this end, Nokia introduced numerous applications in its devices that facilitate communication, thus connecting people, apart from the conventional voice calls and SMS. Nokia phones now have OVI store, an application that allows users to keep in touch over the internet. They also have social network applications in their phones such as Facebook. Twitter, 2go and Skype, and support e-mail services such as Yahoo, Gmail, and Hotmail. Nokia Smartphones provide users with the latest advanced mobile phones internet connectivity. This allows customers to carry out their official business anywhere they are and not necessarily in their place of work, i.e. video conferencing, data entry, and research. As such, the strategic marketing of the company focuses on its devices and the applications found in them, i.e. the level of connectivity that each device promotes (John & Harrison, 2008).
Nokia Plc re-organization would be carried out through the development of new products with advanced operating systems that are in a better position to compete with their competitors like Samsung, Apple, BlackBerry, Vodafone, Huawei, Motorola and Google+. This repositioning would make it a major player in the industry and maintain its sales and growth. These smartphones should also include the latest applications that serve the customers to generate an experience that is bedazzling and creates loyalty, e.g. multimedia applications, games, internet connectivity and network reception. The company develops strengths and eradicates its weaknesses to wedge its position in the market and enable the come up with their marketing strategy. Their strengths include them being a trusted maker and the leading manufacturer of mobile phones, the major suppliers of mobile phones in malls and major stores across the world, and having an award winning image and brand reputation. Other strengths of the company include the effective management and Nokia team, intact heights to bonding areas and people sites, finances that are stable and controllable, performing employees who have initiative cues, transparent financial ratios, and access to good reasoned and durable financial team.
The weaknesses of the company include the saturation of the mobile marketing, its sensitivity to the major competitors, overly usage of Nokia ads and product launching. Others include the absence of controllable retailer and dealer ports to some restricted areas of the market, limited collaboration with global business aspects, and the very crowded models for mobile phones released by different companies on a monthly or annual basis. This would enable the company take advantage of their environmental factors such as PESTLE factors, SWOT analysis, the Five Forces Model Theory by Michael Porter, grand strategy matrix, as well as CPM when it acquires other companies, or forms mergers, or when it establishes branches and subsidiaries in other countries. Some of these environmental factors include taxation like the problem it had with its Indian manufacturing firm, FDI requirements in the countries they set up manufacturing plants and dealer shops, and market entry strategies especially in countries, which already have their leading mobile phones manufacturing plants, like BlackBerry from Canada (Singh, 2011).
The current business plan for the Nokia Corporation has several effects on the functions and operations of the company, especially their marketing and financial strategies. It enables the company to access finances for its new inventions and new firms, and provides a sustainable financial outlay to support their extensive marketing programs such as the launch of new products, the addition of new applications on their devices, and entry or establishment of a new firm in a new region or country. Furthermore, it enhances the competitiveness of the firm by promoting creativity and innovation and development of new products and applications. For the future market and growth of the company, it should target the youthful markets who are massive consumers of mobile phones and their applications in all markets. The youth are the most populated in any market and a company that exclusively provides products for them taps into a large market thus increased sales volumes. The company should design phones, which have applications that target the youths. Such applications include games, multimedia applications, social media networks, Wi-Fi, HD videos, phone tracking, weather updates, and fast speed internet connections and downloads.
By the use of PESTLE model of business analysis, we realize that the factors affecting the strategic plan of Nokia Plc are the political factors, such as the constraints on the G3 technology, which they have to take into account considering the goals of many executives to maximize their profits. Environmental ethical and social factors affect their strategies because some businesses consider profits as more valuable than ethical practices, and this may implicate the producers of such gadgets. Market technology is what Nokia firms must take into consideration for it to keep at pace with the competition. As the company plans to re-organize itself for the new market setting, it has to follow a given procedure. They first have to engage the stakeholder by discussing with them what they intend to do, then they review their mission and vision to ensure it reflects their new goals. They later analyze the current processes and redesign the processes and structures to the new trends. Finally, develop an implementation plan that involves all industry players. This new agenda for Nokia Plc has to meet agendas such as customer satisfaction, customer perception, and customer expectations and needs. The process should also generate profits, make satisfactory progress toward their mission, and be aware of the environment.
The above re-organization plan works best when seconded by another implementation schedule that will ensure the plan stays on track. This would include how to engage their partners, how to develop plans for ongoing communication, how to prepare for changes in staffing for them to be in a better position to serve their customers in a new and satisfactory way. In addition, it enables them know how to develop a business plan that would help the company strategize how to maneuver the markets, and attract external investors, financiers, and partners. Proper implementation of this plan and procedures would enable the company to expand and scale the height of their growth.
However, this has to be in line with the industry dominance of the Nokia Corporation, which is behavioral and not structural. This is because of the upstream innovations that the company adapts. These help the company to form strategic coalitions, open new standards, get skillful partners who will channel and collaborate effectively with management in the distribution of their handsets and other devices to all corners of the world. This enables management to solidify their own strengths and to weaken their powerful competitors. Management can also adapt downstream innovation through design, branding, and segmentation. This would be through flooding shop shelves with products that are new and innovative which dominate markets and become ubiquitous. They use their brand to sell and promote new products, as well as penetrating new markets. They can also utilize preemptive strategies co-opted with most of its potential and actual rivals in the market.
The industrial analysis of the company consists of five forces, which play a major role in shaping the competitive edge of the company. These are the power of new entrants into the market, the power of buyers, the threat of substitutes, the power of suppliers, and the competitive rivalry. New entrants take the market by storm as seen during the launch of Nokia’s N95 and N96 Smartphones, which showed that launching a new product or service by the company has almost a 50% chance of succeeding. The recent fall of economies robbed buyers off their power to demand and purchase new products. This prompted the company to brainstorm strategies of how to increase their products’ demands (Doole & Lowe, 2008).
Nokia has the biggest threat of substitute phones, which are much cheaper than the original Nokia phones, making the company lose a major share of its market as most of her customers shift to their substitutes. The power of suppliers also plays a major role in shaping the markets of the company. A supplier can set an exorbitant charge over their products making them unaffordable to their targeted consumers. This costs the company its market share, thus it takes charge of setting the pricing for their products. The numerous numbers of suppliers available in the market enable them shift from one to another if one of them is not able or willing to provide services as outlined by the company. Finally, the competitive rivalry in the industry helps improve the company’s products and services. Nokia strives to keep the catalogs of their products up-to-date and continue searching for new and advanced technology.