Temporal and PEST Environment - Influence on Changing Business Environment - Essay Example

? Analyzing the causes of change Table of Contents Temporal and PEST environment: Influence on changing business environment 3 Use of multiple cause diagrams: forces of change management 4 References 8 Temporal and PEST environment: Influence on changing business environment The temporal environment includes the business situations that changes with respect to time. The political, economic, social and technological environments influence the business environment which changes the market position and capitalization of the companies. Nokia which attained the position of technological market leader in the 1990s was unable to identify the recent changes in the market share of the company due to the temporal changes in the political, economic, social and technological environment in the telecommunications industry (Paton and McCalman, 2008, p.48). This led to a position for Nokia which was not so mobile like before. The changes in the political environment included relaxation in the regulatory norms in telecommunication industry which attracted increasing number of foreign players in the telecommunications and mobile handset industry. The increase in the number of competitor and the launch of newly designed handsets in the market posed major challenges for Nokia (Burnes, 2009, p.52). The inclination of the customers towards the camera handsets launched by the competitors of Nokia led to the decline in market share of Nokia. The rise of Nokia to the leadership position in the 1990s created increasing job opportunities and rise in the income level of the people of various economies. The rise of the middle income group was the potential market that was tapped by the competitors of Nokia. The mobile handsets of Nokia were old fashioned that dated 10 years back. The market trends saw the launch of flashy and newly designed handsets with colourful screens and folding patterns (Reiss, 2012, p.39). The changes in the mobile handsets matched with the evolving social trends and demands of the customers. Nokia was unable to keep up with the recent changes in the market for which the market of Nokia declined in the recent years. Even the most loyal Finnish market of Nokia witnessed a decline in share from 93% to 80%. The technological advancements in the telecommunications industry and the increase in market share of LG, Motorola posed major threats to the business of Nokia in the several markets across the world. The mobile phone operators like Vodafone favoured the other mobile handset makers as they desired to provide services on mobile handsets that were updated to the market trends. Nokia did not believe in co-branding while the market trends saw increasing number of joint ventures and co-branding of products in order to meet the demands of customers (SENGUPTA, BHATTACHARYA and SENGUPTA, 2006, p.31). The sharing of technology in the market helped the other market players to tap the customer segments who were looking for changes in the available features of the mobile handsets. These temporal changes in telecommunication device offerings to the market were due to the strategic policy making of the competitors (McLoughlin and Aaker, 2010, p.21). The changes in the political, economic, social and technological environment led to the loss of interest for Nokia among the market segments. Nokia could not identify the changes that took place in the market and failed to undertake strategic policies of change management in a timely manner. All these factors led to the decline in mobility of Nokia in the recent years. Use of multiple cause diagrams: forces of change management The decline in the market share of Blackberry smart-phones could be represented with the help of a multiple cause diagram to determine the factors that led to the changing scenario in the business of Research in Motion (RIM), the makers of Blackberry. The multiple cause diagrams would help the organization to respond to the forces of change and also enables the company in addressing the key variables in order to solve the complex dynamics of prevailing changes in the industry. The several causes identified in this case include the economic reforms brought about by the countries and the changes in regulatory structure that led to the entry of new players in the market who undertook the strategy to outsmart the smart-phones launched by Blackberry (Coade, 1997, p.47). The economic developments world wide helped Blackberry to capture the high end mobile phone market with the help of smart-phone where the customers could access web-mails and messaging services with the help of Blackberry products. The recent changes in the market trend saw the tendency of customers to avail the same services provided earlier by Blackberry through the use of featured handsets which were cheaper as compared to Blackberry products (OaShaughnessy, 1995, p.32). The secure messaging service which received popularity among the corporate users also diminished in value when the same services were provided by the comparatively cheaper mobile handsets. Thus the strategic policies of the competitors to include more number of applications at cheaper prices led to decline in the market share of Blackberry smart-phones by 33%in 2012. Thus the changing economic status of the customers is another cause which Blackberry could not address that led to the decline of their market share. The latest changes in the social lifestyles was another area which Blackberry could address and that was addressed by other big name like the Apple’s i-pod, several Android powered mobile phones (Jenster, Hayes and Smith, 2005, p.36). The latest technological changes incorporated in the mobile handsets led to the launch of featured mobile handsets which contained some additional applications and offered wide touch screens of several colours. All these factors led to the switch in interests of the customers in choosing other featured handsets as substitutes of Blackberry smart-phones (Fitzroy and Herbert, 2007, p.58). The multiple cause diagrams provide a comprehensive diagram indicting all these variables that are important factors of change in the market. Identification of all these factors would create a driving force for change management in the organization like Research in Motion. RIM could strategically address a key variable in this multiple cause diagram in order to strategically recover its declining market share and achieve sustainability in the mobile handset industry (Hutt and Speh, 2012, p.58). Blackberry has been planning to launch a next generation operating system in order to respond to the market forces of change. References Burnes, B. 2009. Managing Change: A Strategic Approach to Organisational Dynamics. USA: Prentice Hall. Coade, N. 1997. Managing International Business. UK: Cengage Learning EMEA. Fitzroy, P. and Herbert, J. M. 2007. Strategic Management: Creating Value in a Turbulent World. USA: John Wiley & Sons. Hutt, M. D. and Speh, T. W. 2012. Business Marketing Management: B2b. USA: Cengage Learning. Jenster, P. V., Hayes, H. M. and Smith, D. E. 2005. Managing Business Marketing & Sales: An International Perspective. Denmark: Copenhagen Business School Press DK. McLoughlin, D. and Aaker, D. A. 2010. Strategic Market Management: Global Perspectives. Spain: John Wiley & Sons. OaShaughnessy, J. 1995. Competitive Marketing: A Strategic Approach. New York: Routledge. Paton, R. A. and McCalman, J. 2008. Change Management: A Guide to Effective Implementation. USA: SAGE. Reiss, M. 2012. Change Management. USA: BoD. SENGUPTA, N., BHATTACHARYA, M. S. and SENGUPTA, R. N. 2006. MANAGING CHANGE IN ORGANIZATIONS. USA: PHI Learning Pvt. Read More