This papers aim is to investigate, if it is a good decision for Nokia to go back to the mobile telephone market by utilising different stratec management tools (SWOT, Five Forces, PESTEL, etc.).
The report will start analyzing the evolution of the market of mobile phones and Nokia’s role in it. Then we will move on to the company’s strategy in former times and its success factors. Next point will be the external analysis (SBU, breakthrough resources and capabilities, competitors and the industry). Afterwards we will analyze the current strategic plan of Nokia and a predictable forecast for Nokia’s evolution according to future events such as the launch of the new iPhone. Finally this report will contain an evaluation on Nokia’s decision: to what extent we believe, as a consulting professional group, it is positive or negative for Nokia to return to the market.
Table of Contents
1. Introduction
1.1. Evolution of the market of mobile phones
1.2. Nokia’s role in the market of mobile phones
1.3. Nokia’s desire to return to the market
2. Nokia’s strategy in former times and as a market leader in mobile telecommunication
2.1. Early steps in mobile telecommunication (1987-1997)
2.2. Nokia’s categories (1998-2006)
2.3. The iPhone shock and Nokia’s decline:
3. External Analysis with focus on Nokia’s competitors
3.1. Strategic Business Units
3.2. Breakthrough Resources and Capabilities
3.3. Analysis of Nokia Phones, its markets, and its competitors
3.3.1. Nokia Phone
3.3.2. External market analysis
3.3.3. Industry Analysis
3.3.4. Industry Competitiveness
3.4. Competition within the industry
3.5. External competitor analysis
3.5.1. Comparing brands of the Nokia mobile phone brands and Samsung mobile phones
3.6. Conclusion
4. The Current Strategic Plan of Nokia
4.1. How Nokia is entering the market
4.1.2. About HMD Global
4.1.3. About Foxconn
4.1.4. Initial sources of funding
4.2. The interdependence of the three companies
4.3. Products to be launched
4.4. Risks and uncertainties Nokia will face
4.5. Final words
5. Predictions about Nokia’s future
5.1. Will Nokia participate in the MWC 2017 in Barcelona?
5.2. New smartphone ?
6. Final Conclusion and Recommendation
Research Objectives and Key Topics
This report evaluates Nokia's strategic return to the mobile phone market by analyzing its historical performance, current market competitive environment, and the structure of its new business model involving HMD Global and Foxconn.
- Historical strategic analysis and the impact of the "iPhone shock" on Nokia's decline.
- External competitor and PESTEL analysis of the current smartphone landscape.
- The role of strategic alliances and the interdependence between Nokia, HMD Global, and Foxconn.
- Evaluation of risks, future outlook, and the feasibility of Nokia's market re-entry.
Excerpt from the Book
2.3. The iPhone shock and Nokia’s decline:
So far, we only spoke about the many good strategic decisions Nokia made in its growing mobile telecommunication sector towards its market leadership with a smartphone market share of 48% and a shipping of 38 million devices in 2006. Yet the peak in 2006, with a huge market share and extreme consumer liability, was followed by many very bad decisions, panicking and a devastating decline in market share and consumer loyalty. The trigger for this change in strategy and resulting loss in market share was clearly the launching of the first iPhone by Apple on 9th January 2007. This date marked a shock not only for Nokia but as well for the whole smartphone industry. The iPhone set new standards, especially in terms of design and set the trend clearly towards touchscreens, which hit Nokia quite badly, as they always focused on QWERTY keypads and underestimated the touch technology a lot. Still, the iPhone is not the only explanation for Nokia’s very bad development between 2007 and 2011. How could a company that invented the smartphone, the first app store (OVI), first internet phone, introduced touchscreens two years prior to Apple and made cameras an important feature to phones lose almost every market segment in mobile telecommunication?
The answer is very simple. Nokia did not at all focus on their strength any more (being the most innovative player in 2006, reliable and durable phones, camera technique and business segment) but just started to follow the big trends in smartphone development without being able to keep up with the new competitors. Nokia put itself into a situation, where it is “…[not] like other struggling companies that are coming from behind, Nokia is playing catch-up from the front.”
Summary of Chapters
1. Introduction: Overview of Nokia's history as a former market leader, its decline after 2007, and the objectives of the report regarding its market return.
2. Nokia’s strategy in former times and as a market leader in mobile telecommunication: A chronological analysis of Nokia's success factors, early design-focused strategy, and the subsequent failures following the emergence of the iPhone.
3. External Analysis with focus on Nokia’s competitors: Detailed PESTEL and Porter's Five Forces analysis evaluating the competitive landscape and Nokia’s position relative to Apple and Samsung.
4. The Current Strategic Plan of Nokia: Examination of the new business model through partnerships with HMD Global and Foxconn, including funding and the associated risks of re-entry.
5. Predictions about Nokia’s future: An analysis of short and long-term prospects, including expected device launches and participation in industry events like MWC 2017.
6. Final Conclusion and Recommendation: Final assessment of the viability of Nokia’s return, concluding that success is possible if the company leverages its brand and strategic alliances effectively.
Keywords
Nokia, Smartphone Market, Market Strategy, HMD Global, Foxconn, Strategic Alliances, Competitive Advantage, Mobile Telecommunication, Industry Analysis, iPhone, Android, Business Development, Market Share, Technological Innovation, Brand Management.
Frequently Asked Questions
What is the primary focus of this paper?
This paper examines Nokia's strategic decision to re-enter the mobile phone market after its previous decline, analyzing whether this is a viable strategic choice for the company.
What are the central themes discussed in the report?
The report centers on historical strategic failures, current external market conditions, the role of strategic partnerships, and future projections for the Nokia brand.
What is the primary research question?
The main question is whether Nokia’s decision to return to the mobile telephone market is the best strategic choice for the company and why.
What scientific methods were used in the analysis?
The paper utilizes standard management tools including PESTEL analysis, Porter's Five Forces, VRIO framework, and SWOT analysis to evaluate Nokia’s internal and external environment.
What does the main body of the paper cover?
The main body covers a historical review of Nokia’s rise and fall, a competitive landscape analysis, and a detailed look at the new corporate structure involving HMD Global and Foxconn.
Which keywords characterize this work?
The work is characterized by terms such as Nokia, smartphone market, strategic alliances, competitive advantage, and industry transformation.
How does the partnership with HMD Global change Nokia's role?
Nokia shifts from being an active direct manufacturer to a provider of brand rights and design requirements, while HMD Global takes responsibility for product development and marketing.
Why did Nokia struggle in the smartphone market after 2007?
Nokia failed to anticipate the shift toward touchscreen-based smartphones, remained "stuck in the middle" of various market segments, and was too slow to adapt to software-driven ecosystems like iOS and Android.
What is the role of Foxconn in Nokia's new plan?
Foxconn serves as the exclusive contract manufacturer for the new Nokia-branded products, providing the necessary infrastructure and supply chain capabilities.
What is the final verdict on Nokia's potential for success?
The authors suggest that while the road ahead is difficult due to extreme competition, Nokia has significant potential to succeed if it effectively manages its new partnerships and focuses on differentiation.
- Quote paper
- Anonym (Author), 2016, Nokia Strategic Analysis. Evaluation of the decision to return to the mobile telephone market, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/366907
