Nokia Globalization Strategy Analysis - Essay Example

?Introduction Globalization has enabled many firms that started as small business or even family enterprises to grow in to multinational companies, whose influence is felt in hundreds of countries all over the world. This has increased the magnitude of operations and production owing to the global sized economies of scale; however, it has also resulted in fierce international competitions with some firms seeking to gain international dominance. Thus, the fundamental nature of competition in the 21st century is radically different from earlier times (Hitt et al., 2007,p.28); firms not only fight for market in their regions but also in foreign soil where they encounter others with like similar intentions. Over the last few years, mobile communication industry has increased in significance and size to grow into one of the key industries in Europe, overtaking pharmaceuticals and is now at per with aerospace firms. In the year 2010, the total revenues in the mobile handset market amounted to over 174 billion Euros and these figures are expected to keep going up as the market grows and the existing competing firms increase their production capacity as well as consumer base. Currently, mobile services are virtually ubiquitous with coverage almost at 100%; in Europe, the mobile penetration rate is well over 120% that towers over Japans, and America’s 100% and 104% respectively (Whitehead and Philips et al., nod). This is representative of over 600 subscriptions held by half a million Europeans, bearing in mind that many have more than one SIM card. Understandably, mobile services are the main form of communication, and they are used across all social, economic and age groups in Europe. Because of the high revenues and rapid expansion, many mobile firms have joined the mobile phone industry and this has resulted in intense competition as the firms try to capture the lion’s share. Nokia is one of the earliest mobile companies to dominate in the UK, however, today; it is faced with fierce competition from other cell phone giants such as apple from the United States and Samsung from South Korea. The focuses of this paper is a strategic analysis of Nokia in Europe with an examination of the competiveness of the mobile industry in western Europe, the firm’s particular market placement and propose future strategies. Analysis of the Competitiveness of the Industry As aforementioned, the mobile industry is extremely competitive in Europe and firms are using all manner of strategies to keep ahead of the competition; this often involve developing new and more attractive technologies such as Android. This direct competition can attributed to saturations in the market which make it difficult to “Grow around the competition” (Dess et al.,2012, p.181).Firms are also producing more effective and convenient devices such as smart phones and tablets; furthermore, many of the new gadgets are being priced at comparably lower prices. One of the main competitors in the mobile industry in Western Europe is Samsung; today Samsung has evolved itself from a nondescript South Korean firm to become a dominant player in the global mobile market (Cellan-Jones 2013). Until 2012, Nokia had been the world’s leading brand in mobile phone production and exported more handsets as compared to other firm, however, Samsung electronics, which also leads in the manufacture of TVs and screens overtook Nokia to become the world’s top mobile firm. Expert’s project that Samsung is likely accounts for 29% of all the mobile handsets shipments globally; on the other hand, Nokia’s share in the global shipments went down from 30% to 24 % within the same year (Deagon 2012). Samsung’s success can be attributed to innovative and proactive strategies; while its products tend to be pricey; it invests in the latest technology such as android for its devices and ensures that it gives its customers their money’s worth. Samsung has also diversified more than any other firm and in addition to holding the top market position for mobile handsets it also manufacture an array of electronic gadgets such as refrigerators, televisions and both desktop and laptop computers. However, the main reason behinds Samsung’s current competiveness and dominance is its investment in the smart phone market. In the last year, Samsung recorded a profit of ?5.26bn and analysts postulate that the bulk of this could be attributed to smart phones, over the last quarter Samsung managed to sell over 63.5 million units with 40 million being from the Samsung galaxy S3 (Williamson 2012). Samsung also has an aggressive marketing strategy that endears it to customers and keeps it ahead of consumers; it has invested colossal amounts of money in advertising its galaxy III as compared to other firm’s even apple. The other firm that has contributed greatly to increasing competition in the mobile market is Apple; until Samsung found its way to the top, apple was the leading smart phone manufacturer in not only Western Europe and America but also the world (Sruthijith, 2012). Apple’s strategy also involves the manufacture of highly innovative and attractive devices, this is coupled with the fact that its brand names is undoubtedly one of the most recognized and trusted world over. Apple products generally are pricier than those of other firms with similar specification are; this has helped them remain attractive to many customers who validate the products authenticity based on the high price. The main reason why apple has performed so well is the abundance of apps which make it easy for the phones to be customized become extremely versatile, evidently; Samsung and many other smartphone companies have realized that and followed suit. Analysis of the Strategic Positioning of Nokia After briefly examining the strategies used by the competition in the mobile market, attention can now be paid to Nokia, which despite still being influential seems to be losing its lustre compared to the other two mobile giants. Nokia as a firm has been in existence for the past 150 years, it has evolved considerably making a variety of products ranging from paper, rubber boots and car tires and televisions (Nokia Global Website 2013). However, Nokia eventually specialized with mobile phones and through this route, it was able to become globally relevant and was ranked top of the world’s five most valuable firms; between the years 1998 and 2012, it was the undisputed market leader in mobile hardware (Michels 67). However, during this time several companies were coming up with innovations designed to compete take wrestle Nokia’s market dominance. When dealing with a company as deeply entrenched in the market as Nokia was when Apple begun producing competing products, innovation is a crucial factor (Dess et al 2012, p.405); it allows the newcomer to introduce radically new products, which is the only way they can get the consumers attention. At that juncture Nokia made a strategic mistake by not trying to diversify with the industry, apple launched the iPhone and Samsung their galaxy but Nokia did not respond by producing a competing product of its own. Analysis of the Potential Strategies In the recent past Nokia has operated on a stagey that involved trying to distribute as many phones as possible and in this they succeeded considerably since it was able to market many low priced and high-end phones globally (Mangan, 2012). Nokia has recently tried to bring innovation to the ordinary consumer by developing a line of technically advance phones at low prices such as the Nokia Lumia 920 (Mine and Thomas, 2012). Nokia has also taken advantage of the situation where many mobile service providers are competing for consumers in the same country; in Europe for instance, Vodafone is competing with several other mobile firms such as Orange. In order to exploit this Nokia has introduced a range of dual SIM phones, such as the Nokia Ashaline that allow the user to have the best of the existing providers’ services without having to choose one. In addition, Nokia is going back to the basics; they are improving the simple thing on a mobile phone that one uses every other day such as cameras or music. Taking cognizance of the crucial role played by these services, Nokia has focused on these aspects of their phones to make them better and more efficient. For instance, the Dual-SIM Nokia 303 comes fitted with a 3.3 megapixel camera and 2.4-inch screen that makes it a remarkable expression of the buyers’ personal choice. Among the futures that spruce up the cameras are Paranoma and chronological shots as well as voice enabled self-portrait helper. Many of the phones although different share such attributes as comfortable screen and improved cameras to improve the general brand perception giving consumer’s confidence that a Nokia phone will at least always have a good camera. Overall, the general idea is to input some of the innovations that are normally only found in high end smartphones such as iPhones to low end and more affordable gadgets to give everyone the creative experience. To compete effectively with the smartphones produced by Samsung and apple Nokia has collaborated with Microsoft to produce first smartphones built on a windows platform (Virki, 2011). It recently released the Nokia Lumia 900 (“Nokia and AT&T”2012)to compete with Samsung and Apple’s top smartphones, with thousands of apps and a user friendly interface the Nokia Lumiar reflecting intention of Nokia to regain its place at the top. Conclusions and Recommendation Notwithstanding these efforts, Nokia is still lagging behind in the smartphone market (Stevenson, 2012) ; while the low end phones may sell in other parts of the world more so Africa, Western Europe and America are constantly demanding newer and better smart phones (Husso 2012,p.12). Furthermore, they have constantly demonstrated their willingness to pay for them, thus Nokia needs to follow in the footsteps of the two technology Giants, Apple and Samsung. The NokiaL umia received sold out in the USA but received a lukewarm reception in Western Europe (Shaer, 2012), one of the seasons is the fact that it had inbuilt applications, users not could not download new own apps. Today most designers prefer to build their apps for Android systems since with such the scope of marketing and profiting from them will increase considerably; this means there are fewer apps for windows (Lawton and Amir 2011). Thus, if Nokia wishes to popularize its gadgets through apps, it should integrate android into their systems possibly through ginger bread and ice-cream sandwich technology like the Samsung. The other alternative for Nokia could be shifting from the mass marketing strategy and use partnerships that can be helped to create a dedicated support base for it future products; they could for instance team up with networks in Europe such as Telkom. One of the main reasons why apple is so popular is its eco-friendly approach to production by ensuring the products, Nokia has also tried to integrate aspects of environmental concern. Devices, such as the Lumia 802, are made out of new eco-friendly material such as bio plastics and paints as well as recycled metals, they have also reduce the content inside the manual and box to save on paper and packaging. Others like the Asha 311 are energy efficient with automatic power saver as well as unplug charger notification; ultimately, this is not only makes their devices environmentally friendly, but also endears them to many conscious consumers. Ultimately, if Nokia is to regain its former glory, it must bring more innovation and spend more money on production and marketing its product, a huge number of current smartphone customers want above anything else apps. This can be attributed to the idea of “an app for everything” made famous by the late apple CEO late Steve jobs, consequently for Samsung to encroach on apples position they had to go the app way and the same needs to happen with Nokia. For instance, if someone wants to change from an iPhone to a galaxy, it will probably be able to continue suing many of the apps in the older phone with the new one. However, the lack of integration with the Nokia smartphones makes it difficult for consumers to shift to the firm; bearing in mid the fact that many of the smartphone apps are designed to be addictive. Secondly, Nokia needs to adopt a marketing and advertising strategy that focuses on a particular brand that is improved with time to create brand loyalty, for instance, apple has its iPhone from one to five, Samsung has galaxy, which is its signature mobile brand (Jung-Ah and Kim). In this front, Nokia has made modest progress, in the Lumia smartphone shipping over 6 million units, (Grundberg 2012);nevertheless, much more needs to be done in creating a following for its devices. For this to happen, the firm will have to change it approach of minimum spending and maximum selling since in the current market, for a bit to survive , it will have to do a bit more of the former. At the end of the day, Nokia will only be able to dethrone apple and Samsung if it can compete at the same level them; currently in western Europe and indeed most of Europe, Nokia holds a third place to the two firms. Investing in android technology will go a long way in securing the future of Nokia in the smartphone industry; this is because the future of mobile telephony is at present tied with smartphone and android technology (Nimodia and Deshmukh 2012, p.13). In the words of Einstein, “until someone say you are crazy you have not achieved “, in today’s world what was considered crazy yesterday is creative today and commonplace tomorrow. In this regard, Nokia only needs to develop new and innovative product that will capture the imagination of its customers not only providing them with what Apple and Samsung do,but also exceeding their expectation. References Cellan-Jones, R. 2013.Samsung, Apple, Nokia and the smartphone dogfight. BBC News Technology. [Online] Available at http://www.bbc.co.uk/news/technology-21194396 [Accessed 25/03/2013] Deagon, B. 2012, Samsung Increases Global Smartphone Lead Vs. Apple, Los Angeles, United States. 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