Strategic Management: Nokia, SWOT Analysis Example
Words: 1483SWOT analysis
My choice for the firm that I seek to analyze its strategic option and SWOT analysis is the Nokia Company. I am not working with the organization, but this is an organization that I have keen interests of working with soon after completing my graduate education. The Nokia Corporation is a company based in Finland but with branches all over the world. Nokia is a company that deals with the manufacture and selling of the mobile phones, telecommunication equipment and other mobile content services. Through this business, Nokia Company has grown into a tremendously successful multi-billion company that has been enjoying the market monopoly in the mobile phone industry all over the world.
Because of the large market share that the company enjoys, the company has provided employment opportunities to remarkably many people who are approximately 130,000 people around the globe. The company has registered extraordinarily high gross revenues of more than $57, 157.5 million annually.
Forms of strategy
The success that has been experienced in the firm is not an easy achievement. Many companies have come up but collapsed due to the poor strategies that the organizations had. Nokia has been able to remain the biggest market shareholder because of the entire strategic plan that they had for the organization. These strategies are going to be analyzed clearly in this paper.
One of the major strengths for Nokia is that it enjoys the largest market share in around 130 countries in the world. Through this, the company has singularly many distribution centers around the world as compared to its competitors. This has mad e the Nokia products remarkably accessible to the consumers (Virki, 2007). Additionally, Nokia has created consumer confidence and trust. This has led to high levels of the purchase of the Nokia products around the world hence leading to increased gross income to the company.
Secondly, the staffs of the Nokia Corporation that are given the responsibility of design are fully engaged in research and innovation. Essentially, the company has been able to manufacture products continuously that are of the current technologies hence providing the needs of the clients. As a result, the products of the company have remained competitive in the market thus, greatly contributing to the success that is being experienced in the organization (Nokia website, 2012).
Thirdly, it is worth noting that the Nokia products are purely user friendly. This has led to a big attraction of customers especially those customers who are acquiring the mobile phones for the first time. The menu is extraordinarily straightforward, and the phone key pad has fewer letters and signs. This essentially allows a person to buy and use the phone after a short period of interaction without experiencing any serious problems. This has contributed to the high preference of the Nokia mobile phones and other products.
In addition, one central strategy that Nokia has maximized on is putting in mind all classes of people in relation to the financial status. Nokia manufactures products that vary in prices. The cheapest products are affordable to exceptionally poor people. There are also products that are affordable to the executive people. This has made all the consumers satisfied as their needs have been fully met by the organization.
Lastly, most consumers have been buying the products that have been manufactured by the Nokia Company because these products usually have an unusually high resell price as compared to the mobile phone products being sold by other competitor companies. The depreciation rate of the products is precisely low, and the product can still fetch some reasonable prices even after it has been worn out for some time. Any consumer will seek to advance in merchandise that will have some persuasive value after some good period of usage. This has contributed to the high rate of purchase of the Nokia products.
Opportunities for Nokia
Nokia Corporation has bigger opportunities to grow economically and in market share. This is because of the fast rate of growth of technology around the globe. A good number of the countries around the globe particularly in Africa and Asia are experiencing a remarkably fast rate of technological penetration. This is leading to the augment in the compatibility of the mobile equipment. Through this, Nokia needs to invest a lot in these regions so that it can gain the customer confidence and trust before the market is targeted by other companies like Motorola and Sony Erickson (Porter, 2004).
The second opportunity of the Nokia Corporation is in the variety of the products that it manufactures. Most of the products are cheap and user friendly. Regions experiencing fast technological penetration are characterized by poverty and illiteracy. This is an opportunity for Nokia as their products will be the most appropriate for these regions. This is likely to increase sales and the gross income of the company.
Nokia Corporation is facing threats from other existing mobile phone manufacturing companies like Motorola, Samsung, Sony Erickson, and Apple. These companies are growing at a tremendously fast rate and hence taking up the market share that was initially enjoyed by Nokia. This occurs mainly in the developed countries where consumers are seeking for some definite features found in the other mobile phone brands.
Secondly, there is an increased rate of the manufacture of counterfeit mobile phone products around the globe. Essentially, Most of these gadgets are given features that looked a bit attractive to consumers. This has majorly been experienced in the mobile phone products from the Far East countries like China, which are of low quality but decidedly cheap and have many features. This has led to a high rate of the purchase of these products by customers who end up losing a lot because the counterfeit products do not last for a long period.
Some of the products of Nokia are frightfully expensive. These products have exceptionally convenient features that are required by many people but the phones are not affordable. Secondly, some of the products of Nokia are not user friendly; hence require one to take some time to learn how to use the gadgets (Nokia SWOT analysis, 2010). There have been cases of low marketing in some parts of the world. This has negatively affected the sales because consumers are not provided with the relevant information concerning the products offered. Last, there have been cases of having remarkably few service centres in some regions like India. It becomes hard for customers to access the after sale services in some regions.
Critique of the strategies
Nokia Company has been doing well in its business and the strategies put in place have so far proved beneficial to the company’s success. However, there is a need of reviewing the strategies being applied in the developed countries because of the drop in the market capitalization of Nokia because other mobile phone companies are going ground in these regions at a faster rate. There is a need to develop strategies that will help win customer trust, loyalty, and confidence.
Nokia Company has been undertaking many marketing strategies for its products worldwide. This is aimed at increasing the customer awareness f the products that are being marketed by Nokia. This is also aimed at informing the customers the locations where they can access the customer service centers for assistance in the use of the products.
Secondly, the company is exceptionally keen with the manufacturing and innovation department so that they come up with mobile phones that are low-priced and satisfying the requirements of the clientele at the same time. This is possible by developing phones with current features present in the competitor phones, and enhancing them with new features that motivate the customers to purchase.
For a long period, Motorola has had a large market share, as it has been the second largest company after Nokia. Motorola has invested in the manufacture of mere cheap mobile phones. This has made it provide pure and stiff competition to Nokia because their products are also affordable to the poor in the society (Ojo, 2009).
Secondly, other competitors like Samsung, Apple, and Sony Erickson have heavily invested in research and technology. This has made them design more attractive and sophisticated products to customers. This has been seen in the coming up of smart phones that are advancing in reputation all over the globe.
Lastly, most of the competitors are engaged in a lot of aggressive advertisement and marketing strategies with an aim of winning and retaining customers. This is increasing the product awareness to customers and hence resulting in the augment in the purchase of products.
Nokia SWOT analysis. (2010). Retrieved on 29th, April 2012 from www.scribd.com/doc/13163457/Swot-of-NOKIA
Nokia website. (2012). Nokia to remain the market leader in the mobile phone sector. Retrieved from www. Nokia.com
Ojo, B. (2009). Analysis: Nokia vulnerable to maturing mobile market. Electronic Engineering Times. 23 March 2009. p8
Porter, M.E. (2004). Competitive advantage: Creating and sustaining superior performance. Free press, USA.
Virki, T. (2007). Nokia leads race for next billion mobile users. Reuters. [Online] Available from http://uk.reuters.com/article/technologyNews/idUKL228063620070625 Accessed 29th, April 2012.
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