Business Strategies and Management of the Nokia Company - Essay Example

Nokia Telephone Company Introduction Nokia is an international mobile phone company headquartered in Finland. The company specializes in mobile phones among other portable devices like tablets and PCs. The company also provides its clients with entertainment applications for music, games and other related utilities. The company has an established brand name due its quality products and services. Nokia has partnered with different companies to advance its products to gain an advantage over its competitors. For instance, it partnered with Google map and navigation companies to incorporate navigation applications in its recent Smartphones and tablets (Goyal 7). It has also partnered with recording artists to provide music to its customers through the internet. The company faces several challenges currently. However, its management team has formulated and implemented strategies to keep the company relevant in the market. We live in a generation where technology has become part of human life. This compels Nokia to conduct regular market research and advance its products and services to attract and retain its customers. The following discourse is on the Nokia Company in terms of its business strategies and management. Company statistics Currently, the company has over 100,000 employees in more than 100 countries. Forbes magazine placed it as the second largest mobile phone company with an estimate of over 30 billion Euros in market dominance. Besides, it has an estimated market share of 22% by the beginning of this year. Nokia was the largest mobile phone company in the entire globe, between 1997 and late 2012, before Samsung took over. The company suffered a great business setback when its global market share dropped due to the emergence of several smart phones and iPhones in the market. The company partnered with Microsoft to incorporate windows in its latest smart phones. Its market research indicates that the company lost several customers to Apple and Samsung whose smart phones and tablets have Android as the operating system. Nokia phones had the Symbian operating system and this was considered slow and unreliable (Marks 207). Brief history of Nokia Telephone Company The company was established in 1865 by Fredrik Idetam as a paper mill factory in Tampere. Three years later, another pulp mill was built in a small town named Nokia which about fourteen kilometers from the first pulp mill. Idetam and, his close friend and business associate, Mechelin (electrician) changed the initial pulp mill industry into a partnership company and named it Nokia, and that is how the company’s name came about. Later, the company resorted to electricity generation and expanded its operations by selling more shares to the public. The company expanded its business further by partnering with neighboring associates like Finnish rubber works among others. In 1912, the companies combined their resources to venture into the production of electrical and telephone cables. The company had to reshuffle its management team to avoid going bankrupt after the First World War I. At the time, Verner Weckman became the chairman and used his peculiar business management skills to attract more companies and form Nokia Corporation by the end of the year 1967. The company produced a wide range of products including cars, rubber, paper products, and personal computers among others. Later, some companies split from the parent company (Marks 207). Nokia specialized in telecommunication products in the year 1970. The company first produced Nokia DX 200 which was a kind of switch used to control telephone communications. The company advanced its products with time to the current smart phones and tablets. It became the largest mobile phone company until 2012 when Samsung, through its most preferred android mobile operating system, took over. Nokia had to conduct a market research and ascertain its weaknesses. It later partnered with Microsoft to produce windows mobile phones. Research is still underway to ascertain the effects or outcome of producing windows mobile phones and tablets (Brown 342). Marketing management This is defined as the application of marketing techniques and resources to ensure increased company revenue. Nokia is one of the mobile phone companies which engage both regional and international or global marketing techniques through experienced and qualified teams. It has marketing managers in all its regional companies. The regional managers have the role of influencing, timing, as well as determining the nature of the demand before any product is released to the market. Each product or department is assigned with different marketing managers and their assistants. However, there is the head marketing manager based in the company’s headquarter which is in Finland. One is meant to liaise with regional managers on the release of a certain product. Marketing departments have different specialists to ensure it remains the most popular and preferred mobile company in the entire globe. There are marketing researchers who conduct frequent relevant market studies to ascertain the current situation of a product and the necessary actions to accomplish or enhance it further (Brown 342). Nokia has qualified market planners who are entitled to establish the company’s products. The team considers the company’s objective and prevailing market situations before deciding on the prices. The specialists have to liaise with the production and procurement team to obtain the general input in the production of any product. The marketing management team uses various tools to determine the economic and competitive nature of the company’s products in the market. It is worth noting that a comprehensive market analysis or study leads to the appropriate decisions which are a plus for the company. Marketing is the ultimate determinant of a company’s success. Forbes magazine indicates that a company or business is ranked in accordance with the annual revenue and its contribution to the global market share. Hence, the marketing department is one of the most valued sectors in the company. Nokia has the best economists, financial planners, and manager in the marketing management. The Nokia Telephone Company employs several analysis methods to ascertain the current situation with regards to its branding and marketing strategy. It considers both the internal as well as external environmental analyses in its business operations. PESTEL analysis forms abbreviations for Political, Economic, Social, Technological, Environmental and Legal analysis. The company obeys tax policies, labor legislations, and environmental requirements among other political requirements. Economically, the company has enjoyed the advantage of a favorable exchange, interest, and economic growth rates (Marks 207). Furthermore, it enjoys the advantage of the first move, since the current business in mobile phones among other devices depends on the initial prices set by the company (Nokia). The company capital is always on a growing trend since it seeks loans from regional and international lenders like banks at humble interest rates. The company has used the acquired capital to expand its territories to major parts of the globe. The social aspect is observed when the company codes and regulation require it to acquire workers or specialists from different ethnicities, races, or academic background and be treated equally to promote workplace diversity within the company. In terms of technology, it has incorporated advanced and environmentally friendly mobile technologies to beat its competitors like Samsung, Apple, and Siemens. The company, through its environmental department, has ventured in quality management system by going ISO so that its products can be accepted globally. The legality of the company is at par since it has never been involved in a serious legal pursuit with its internal and external stakeholders (Marks 207). Porter’s five forces is another important analysis method in business strategic management. This strategy implies that business is likely to be faced by five major influences, which must be economically and comprehensively handled for the prosperity of the business. The company handles the threat of new entrants by providing quality services to its customers at a friendly cost to disadvantage newcomers in the same business. Nokia has a remarkable brand name being among the first mobile phone companies in the entire globe. It established its regional companies in major parts of the world to expand its market. It took comprehensive business studies to take such initiatives. Nokia offers free services like phone battery replacements, consultant services, and device repairs and maintenance to its customers. This has enabled the company to attract and retain more customers in both developed and developing nations. With regard to the management of new entrants into the market, Nokia is rated to have a medium to high pressure The threat of substitute goods is handled by the company producing quality mobile phones, tablets, and PCs at pocket friendly costs compared to its competitors like Apple (Bowie and Buttle 69). There are other companies that produce different kinds of mobile gadgets. These tend to compromise Nokia’s annual revenue. Currently, there are over 100 companies that produce substitute products like land line telephones which reduce the overall demand for Nokia products. The latest analysis indicates that the company is rated with low pressure when it comes to handling the issue of substitute products (Bowie and Buttle 69). Marketing strategies Nokia attracted more customers through its quality mobile phones. Its most remembered gadget was the Nokia 100 which was produced in 2003. The phone attracted a huge market both in developed and developing nations. The phone generated huge revenue because it had a long life battery, was easy to use, much smaller (portable) and was sold at subsidized products. Later, the company conducted a market research and realized the society required a more entertaining mobile phone. Nokia partnered with Global system for Mobile Communications (GSM) and advanced its products (Brown 342). This marked the second generation of mobile communicating devices. These phones could handle data and enable users to access the internet. Nokia later developed more advanced phones to the current smart phones which have more than 1000 applications. Quality products and services have been a great marketing strategy for the company. Currently, the company produces a variety of mobile devices like phones, laptops, tablets, PCs, Playstations and notebooks with different specifications to suit different customers depending on suitability and cost (Brown 342). Nokia has engaged different kind of advertisements to notify the public of its latest products and attract more customers. There are huge clearly printed billboards on major road sides in major towns with the latest Nokia products. The company has an advanced IT department which is mandated to keep the digital community on the latest Nokia products as well as services. The IT department uses social media like Facebook and Twitter to reach billions of customers all over the world. Customers are able to raise relevant questions with respect to any Nokia products then get responses within five seconds. The public is notified of the latest Nokia products through the same sites. Nokia has several web pages through which the company can communicate with stakeholders like suppliers, business associates, consultants, customers, and shareholders. The company uses regional and international broadcasting television and radio channels to pass information to the public, more so with regards to its latest products. It also publishes on the regional news prints to notify customers of its latest products as well as respective prices. The latest Nokia market survey report indicates the company’s advertisement strategies is yielding real actual benefits. Nokia has adopted market stratification as a means of attracting and maintaining a certain category of customers (Cravens 47). Market stratification requires a comprehensive market research before being implemented. Nokia produces its products targeting different groups of customers. For instance, the company produces simple mobile handsets with few or no applications, the gadgets are simply meant for making, receiving calls, or sending and receiving text messages. These gadgets are cheap and easy to use. These products target older adults and school going children due their simplicity. Several developed and developing nations require the school going children to have a mobile handset for easy communications with their parents, guardians, teachers, and other older responsible persons in case of any emergencies. Nokia took this advantage and produced simple and less costly gadgets to suit these groups (Cravens 47). Then there are the high school and higher learning institutions’ students who require gadgets that enable communication and entertainment. Here, Nokia produces Smartphones with communication and entertainment applications. The current Nokia Smartphones have social media applications like Facebook,Twitter and Skype among others. The phones also have entertainment applications like YouTube, media players, music and movies downloading tools and iTunes. These gadgets synchronize with the 3G internet network to enable the students or the youth’s access online services and materials. The other products are for the working class or institutions. These include the tablets and PCs with advanced specifications. They have applications to assist in scheduling and program management among other applications. These gadgets are more expensive compared to the rest (Cravens 47). Nokia has partnered with regional and international network providers to produce mobile handsets at affordable costs. They sell the products to the network providers at bulk and wholesale prices then the later sell the products to the public at subsidized costs. This enables the company to distribute its products in almost every corner of the world. The company also sponsors several regional and international projects through the assistance of the network providing companies; this itself is a way of branding the company. For instance, Nokia has a good brand name for funding major developmental projects in both developed and developing nations. The society would like to associate with companies which appreciate the needs of the society. Human resource management Nokia, as an international company, has over 100,000 thousand employees in major parts of the world. The company has an organized human resource team in each regional company as well as in its head company based in Finland. The company has adopted several human resource management strategies to increase the its productivity. For instance, the company’s strategic plan insists on workplace diversity. The company offers equal opportunity for all kinds of people in the society. It has both skilled and unskilled workers, specialists and consultants, engineers, economists, financial managers, and security personnel among other categories of employees. The company offers equal opportunities to male and female workers provided they meet the required qualifications for certain posts. It also provides chances to the youths and older adults as stipulated in the labor acts of several countries. Workplace diversity is a motivational scheme in the company. Several business studies have been conducted to ascertain the relationship between workplace diversity and business performances with regards to respective company’s annual revenues. Such studies have varied results but it can be deduced that a company with well managed workplace diversity is likely be more successful than those without. Nokia has adopted the electronic-human resource management (E-HRM) method. In this case, the company has a central server from which several departments can acquire human resource services and raise complaints. The methods are appropriate since it has several employees in different departments that make the traditional human resource management method ineffective. The 2011 Nokia’s annual business report indicates the company cut its operating cost by over 3 billion Euros by adopting the E-HRM. However, this method is currently applicable only in developed nations where the majority are equipped with advanced technological knowledge or skills. Nokia’s regional companies in the developed nations still rely on the traditional human resource method where the department is headed by a qualified human resource manager and assistants depending on the labor capacity (Brown 342). Globalization The company, being the first to venture into the mobile phone, market attracted a good number of customers. Its products were of quality and offered at affordable prices. The company enjoyed the advantage of low competition being the first mover. As technology advanced in both the developed and developing nations, the demand for the Nokia products increased. The marketing management team conducted both regional and international market research to ascertain the feasibility of expanding the company’s territories, both within Finland and other countries. The studies helped in planning for regional branches. The first branches increased the annual revenue and global market share of the company. Later, the company acquired debit capital from international institutions after preparing a convincing business plan. It also used part of its annual income (equity capital) to expand its territories in major parts of the world. However, some counterfeit companies took advantage of Nokia extending its boundaries to the developing nations. They still produce counterfeit Nokia products to the market. The majority of people in the developing nations can hardly differentiate genuine Nokia products from the counterfeits. This has greatly compromised Nokia’s annual turnover (Brown 34). The company has several challenges in its operations. The issue of counterfeits products has greatly reduced the company’s global market share. Counterfeit products are cheaper than the genuine products. Consequently, they attract more customers. Nokia has more than 100 competitor companies in both developed and developing nations. This reduces its annual revenues. The company suffered a great deal during the 2007 global financial crisis after the U.S authorized uncontrolled loaning scheme to the real estate department. This lowered the abilities of the company in acquiring huge amounts of debt capital for its operations. However, the company has violated some ethical issues in its operations. Nokia has been sued by other mobile phone companies for copyright offenses. In 2007, Apple sued Samsung and Nokia for using its touch screen technology without its authorizations. Nokia and Samsung paid for the damage but their products remained in the market (Brown 34). This issue was negatively taken by majority of Nokia’s customers. Business ethics or legal matters can make a company lose its customers upon violations. Works Cited Bowie,D.and Buttle, F. Hospitability Marketing. Toronto: Elsevier, 2004. Print. Brown, E. Company facts. New Jersey:Prentice-Hill, 2010. Print. Cravens, D. Strategic Marketing. New York: McGraw Hill Irwin, 2009. Print. Goyal, A. Business Environment. New York: FK Publishers, 2007. Print. Marks, B. Business competions. New York: Prentice Hall, 2007. Print. Read More