Nokia Mobile Phone - Research Paper Example

XXXXXXXX Number: XXXXXXXX XXXXXXXX XXXXXXXX XXXXXX XX – XX – Nokia Mobile Phone US Introduction: Nokia Corporation can be dated back to as far as 1865, where the name was used for the wood pulp mills. As years passed by the company took the current form under the laws of Republic of Finland. The company has grown since the 1980s and has been able to develop and find a place in the telecommunications markets as well as the consumer electronics and computer markets. Today the company has grown worldwide and is recognised for its mobile phones and for broadband services (Hollensen). This paper aims at identifying the condition of the company in the US markets in 2006, and also to discuss the product life cycle stages and the solutions that the company has adopted for the position in the US markets. A set of possible solutions that the company could have adopted have also been set down as recommendations for the company during 2006. The recommendations set down have been well thought out and is based on the performance of the company, the factors that impacted the business during that stage and also keeping the future in mind. Firstly, it is important to identify and discuss here the stage of the life cycle model that the company was in during 2006 in the US. Nokia US – 2006: The year 2006 was indeed recognised to be the peek for Nokia Corporation in the US. The company had grown to sell as much as 440 million handsets which contributed to almost 40% of the overall global cell phone sales. The company was then at the pinnacle of success and every product of the company, i.e. the mobile phones as well as the MP3s were all in high demand. The company had seen an increase of 25% for the demand of the phones in the emerging markets (Kharif). The company made a net profit of almost 1.2 billion Euros. The company has also seen a major increase in the revenues in the year 2006. On the whole, the company was part of the growth stage and the company has seen intense growth and development throughout the year throughout the world except in America (Kharif). In the case of America, Nokia has moved from the growth stage and to a great extent has moved closer towards the decline stage. There has been a massive jump in the company’s position in terms of the product life cycle. The years prior to 2006, have clearly been very eventful and successful for the company however, the year 2006 led the company to be left way behind competitors like Motorola. Nokia lacked the style and new trends in the mobile designs and carried on focusing solely on the bar shaped cell phones (Kharif). There was clearly little or no attention paid to the customer needs and this led to the decline of the company’s market share and also market position. This error and lack of focus has led the company to move into the decline stage at a greater pace than it would normally be for any business. Life Cycle Stages: When a company moves into the decline position in the product life cycle as Nokia did in 2006 for America, here the sales see a major fall and so do the profits. Here there is a shrink in the markets and also in the possible profits for companies in the industry. The main reasons for the decline can be varied, like products becoming saturated, obsolete or also changing trends. Here once a company reaches this stage of the product life cycle there is clearly a high need for the products to either be completely replaced or also be redesigned (Spencer). Using any one of the above strategies will allow the company to not be forced out of the markets and will permit a chance for the company to make a comeback to the markets as well. Here clearly Nokia has reached the stage in the US, and the company has been faced with the move into the decline stage due to reasons including lack of customer needs, obsolete designs as well as lacking focus on customer centric strategies. The change in the stage of the company has been drastic due to the lack of proper sustenance and performance. Also, the lack of the company focusing on the needs of the employees has led it towards such a steep and major decline. Here although the company had clearly developed the brand loyalty and equity, there was a number of issues retaining the customers due to the error of the company and lack of proper services within the company. Nokia’s Solutions: Nokia however did come back with an excellent answer to the decline. The company followed a few different strategies, i.e. differentiation, clubbing up with the carriers, and by meeting the needs of the skeptics. Here the company has dealt with the changing environment and had developed a number of different strategies to meet up to the needs of the customers. The company clearly found the right comeback and answers for the competition put up by Motorola (Virki). In an attempt to provide a competing product for Motorola’s Razr, Nokia developed the N91. The company researched its market and instead of staying still in the competition, Nokia found and developed a solution for all of the competitor products. This helped the company to gain back almost 20% of the markets. Here this is relatively a good solution for the company considering the level of decline that it had faced in the start of the year (Goldman). The approach of product differentiation by the company is an effective and efficient method of dealing with the growing competition; however this is mostly short lived and is not beneficial for sustaining the position in the markets. One of the major lacking of Nokia has been the lack of focus on the changing lifestyle and lack of research and development before new product development. Motorola clearly has had a major edge on the company based on this aspect of the business and this has led Motorola to outdo Nokia in the US markets (Kharif). Recommended Solutions: Based on the position that the company was in the 2006, here are a few of the possible solutions that the company could adopt to improve and rebuild the position in the markets and also to achieve the leadership position in the markets. The following recommendations have been set in place: a) Finding out who the customers are and understanding their needs. In the type of era that the companies operate, the main aim of the companies needs to be customer centric. Understanding the customers and targeting them correctly is a crucial element of every business and the research and development on these aspects will help the company regain the leadership flag position (Arnold). b) Selling itself, or the brand name. With the high levels of intensity of competition that was being faced in 2006, the company clearly needed to sell itself more strategically and to provide customers with a brief yet detailed information of what the products do (Arnold). The need was to create a bang with the products rather than extensive product features. c) Focusing on modernization. The US markets are such that need up to date products and are focused more so on the modern products which meet the needs of not only the handset and the looks but also the carrier and their needs. Having an excellent looking phone with no ability to catch the signal clearly is not effective, for instance like the example of E70, where the phone was well received however, the phone did not meet all requirements (Arnold). Hence this is an essential element for the success of the company. d) Improved customer service. One of the main elements of a successful business is the after sales care that the company provide. In the case of Nokia, the company provides the customers with a lacking and questionable customer service in the US. Hence if the company aims at better customer service and going the extra mile, then Nokia can achieve back the leadership post in the US markets (Arnold). Conclusions: In conclusion, it is evident from the performance of Nokia in the US markets that the company has not focused on customers and the needs of the customers. This has led the company to not only loos its market position but also receive bad feedback in terms of the after sales services. On the whole, one of the major elements that have impacted the company and its position is the lack of customer centric behaviour. With the current level of competition, increasing customer awareness and the high levels of improvements in technology, companies now require a more focused, strategic and well chalked approach to be able to gain market position as well as to sustain the market positions (Arnold). The above recommendations would have proved to be very beneficial for the company to not only gain back the leadership in the markets but also to sustain and retain the customers. Works Cited Arnold, Randall. How Nokia can retake the US Market… and more. 21 July 2010. 28 February 2011 . Goldman, David. Why Nokia cant crack the U.S. market. 16 September 2010. 6 March 2011 . Hollensen, Svend. Global Marketing. Dorling Kindersley, 2010. Kharif. BusinessWeek.com. 30 March 2009. 11 February 2011 Kharif, Olga. Bloomberg Businessweek. 7 February 2006. 28 February 2011 . Spencer, Tom. Product Life Cycle model. 29 January 2009. 3 March 2011 . Virki, Tarmo. Factbox: Key problems facing Nokia CEO. 20 July 2010. 3 March 2011 . Read More