business

BUSINESS ENTERPRISE- STRATEGIC MARKETING

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Table of Contents
1. Introduction 3
2. Vision and Mission Statement 4
2.1 Vision for the future 4
3. Analysis of Stakeholders 5
3.3Business community 6
4.Nokia’s Existing Marketing Strategy 7
5.Internal Audit 8
5.1Resources 8
5.2Core competencies 10
5.3Managerial competencies 10
5.4Corporate culture 11
5.5Nokia’s value chain 11
5.6Factors that deliver a competitive advantage 12
5.7Summary of Nokia’s strength and weaknesses 13
5.7.1Strength 13
5.7.2Weaknesses 13
6External Analysis 13
6.1PESTLE Analysis 13
6.2Porter’s Five Forces 15
6.3. Strategic Group Mapping 16
6.4. Industry life cycle 17
6.5. Boston Matrix 18
6.6. Opportunities and threats 19
6.6.1. Opportunities 19
6.6.2. Threats 19
6.7. Appraisal of opportunities and threats 19
6.8. Strategic options 20
7Conclusion 20
References 21

Business Enterprise- Strategic Marketing
1. Introduction
Nokia is a global multinational company that manufacturers mobile phone devices; converging internet and communication companies with a staff 132,000 employees. The company is one of the biggest in the world and its offices can be found in close to 150 countries. Its approximate global yearly sales revenue is €42 billion and before 2010, its operating profit was €2 billion. The company had a market share of 28.9% in 2009 and still stands as the market leader in the manufacture of mobile phones.
The Nokia Company was established 146 years ago. It began as a paper mill in Nokianvirta River and between 1865 and 1967, the company had become a force in the market. This was after its merger with a cable and rubber company, and the Nokia Corporation that deals in electronics was established.
By 1960s to 90s, the Nokia Corporation was well placed at the forefront of the mobile communications industry. At the time, the European market was still free and the growth of mobile networks globally was yet to take place. The most popular strategic decision for the company came in 1992 when it acquired the GSM standard. The company grew in the mobile phone industry and led it for years.
1.1 Situation Analysis Nokia is currently the world leader in the mobile phone industry. With its long experience and massive resources, the company supplies the international market with mobile phones, and equipment for broadband and IP networks. Through internet mobility, Nokia offers many opportunities for firms and improves lives. In 2011 the company faced a drop of sales and suffered a net loss of €368 million compared to a profit of €227 million in 2010. In 2013, the company faced 7,000 job cuts, with half of jobs going to consultancy as the company increased its focus on the production of smartphones.
2. Vision and Mission Statement
2.1 Vision for the future Nokia’s mission is simple: to connect people. The company’s goal is to build great mobile products that enable billions of people worldwide to enjoy more of what life has to offer. The company considers it a challenge to achieve this in an increasingly dynamic and competitive environment (http://www.nokia.com/global/about-nokia/about-us/about-us/)
2.2 Mission Statement The company has a mission set out for all of its major players. Customer. The company aims to maintain the confidence of all its clients through the persistent provision of quality service that satisfies their needs. Market. The company aims to be at the forefront as a market leader in the industry through the continued provision of quality services. Business. The company aims to make sure that all its employees are aware of what Mobile Network Internal Systems are and how they work. With this, employees will be responsible for the success of the Business Management System. Training. The company aims to make sure that is has a progressive training process that empowers employees with skills and experience that are vital for the success of the organization. Team. The company aims to offer the most effective and efficient work set up, advance careers and job security, and boost the level of trust in the organization and loyalty to clients.
3. Analysis of Stakeholders Stakeholders refer to the people who are most interested in the company activities. A company should always take care of its stakeholders and determine the level of power they have to affect the decisions of the company and their results. The first process is to create a generic stakeholder map that involves all of the stakeholders of the company. This follows stakeholder mapping where the marketer familiarizes himself with the stakeholders. This will show the influence of particular stakeholders which would not have been noticed earlier. The Nokia Corporation is one of the biggest organizations in the world and addressing the needs of its stakeholders is a big part of its strategies. Stakeholders include internal and external stakeholders, shareholders, staff, suppliers, customers, governments, communities, the media, banks, and insurance companies.
3.1 The internal stakeholders These are normally members and employees of the company. They may include directors, managers, employees and connected stakeholders such as clients and distributors. Shareholders in the company accumulate capital for the business as they are a part of the business. They get part of the profits earned, bonuses and dividends equal to what they invested. The Nokia Corporation accommodates its employees when it comes to discussions on matters of corporate significance, career, competence, performance and work-life balance. The suppliers play a vital role for the company. The company ensures that they receive regular payment, and the company also maintains regular communications with them.

3.2 External stakeholders External stakeholders do not directly affect a company. They are interested in the company activities and may include governments, communities, the media and interest groups. In Nokia, the customers are involved by the company in matters of sustainability. The network operators, a part of the client community, are supposed to acquire high levels of company accountability in the processes. The company receives and welcomes inquiries on its social and environmental performance from clients. The company also has to follow all the policies set by the government.
3.3 Business community The business community is a connected stakeholder. It is always interested in the processes of a company and some also play a role in the company’s growth.
The Nokia Corporation is engaged in activities with other companies on several matters. There is the Global e-Sustainability Initiative (GeSI) which takes part in supply chain operations, and waste disposal. There is also the World Business Council for Sustainable Development which comprises of banks and members of the media.
4. Nokia’s Existing Marketing Strategy Nokia Corporation’s responsibility strategy lies in involving, enhancing and accounting for all of its operations and shareholders. The company continuously measures and reviews its performance in the economic, setting and social areas. It takes part in stakeholder dialogue and creates associations that meet the needs of areas that should be improved. The company goes after practical improvement initiatives in vital areas of its operations. This comprises of business development, internal communications and training. It creates a better sense of accountability to the stakeholders by reporting developments through an informative internal and external communication process. The company is an industry leader precisely because of how it conducts its business. Its work principle is called “The Nokia Way”, and it is based on corporate accountability, and this is advanced by a gradual and extensive process. A big part of this process is based inside the organization, with most of the work rising from current programs. The company’s operations are taken through a corporate responsibility process; the company ensures ethical practices and maintains accountability to all its stakeholders. Corporate responsibility is responsible and it guides the company’s decisions. Top management officials look through the various issues in the industry and the business and consider them in plans for the organization and operations of the company. The company uses its resources to be proactive and meet long-term objectives. The company’s strategy focuses on the growth of the mobile communications industry and its share in it. Nokia also focuses on the growth of mobile voice, the management of client media, and enabling the mobility of partner-companies.
5. Internal Audit
Audit is a process that tests managerial control. It comprises of analysis and confirmation of accounts and records. The audit shows critical focus and analysis of policies, programs and processes in the management of resources.
5.1 Resources
Human resources. This is the number of skilled and unskilled employees who work for a company. It measures the effectiveness of the human resource management and acquires the procedures to guide the work ad behavior of employees. The audit may be formal and systematic in form, and it may also comprise of an inner-assessment. This audit determines if the human resource policies and practices are in line with the company goals.
Nokia Corporation’s recruitment process involves take a large number of technically- skilled employees. They go through training to strengthen and sharpen their skills and knowledge about the operations of the company. The company also gives them opportunities to improvement through skills enhancement programs.
In July 2011when sales fell and the company lost €368 million. It implemented a redundancy program and lay off a thousand employees. Because of low profits, the company also cut another 600 more jobs.
Physical resources. The physical resources are the tools and facilities that are available in a company. They are used in all efforts to meet company goals.
Various companies use varied structures. The Nokia Corporation’s physical resources refer to the structures and facilities it has set up all over the world. Nokia’s physical resources include a large number of stores in many countries.
Financial resources. This refers to the financial support available to the company so it can undertake its operations necessary to realize its goals.
Nokia’s financial resources sustained severe losses in 2011.

Source: Board of Directors 2011, Nokia in 2011.

Intangible resources. Intangible resources are resources that accord value to a company. Trademarks and branding are a good example. The Nokia Corporation has several trademarks. The name “Nokia” is itself a huge brand comparable to is competitors such as Apple’s “iPhone” and Google’s “Android”. It is without doubt a pacesetter in the mobile phone industry.
5.2 Core competencies
The core competencies for Nokia Corporation comprise of the activities and operations it conducts. Core competencies are simply things that the company does or undertakes as specializations in comparison with those of its competitors.
The company’s competencies maybe hard to copy, such as customer loyalty. These core competencies change as time goes by.
The company currently faces a downturn in terms of sales. Companies including Nokia now look for alternative ways to remain relevant.
The Nokia Corporation has created new services and products that are not easy to replicate in terms of features. It aims to ensure that its customers get the value for their money.
5.3 Managerial competencies These comprise of knowledge, skills, attributes, experience and contacts that make a company ensure it performs well. The competence involves the application of elements. It is always reflected in the output of an organization. Managerial competency formulates and applies visions; it operates in the best way to acquire an effective outcome; accords power and responsibility; and it also refers to the ability to engage groups to acquire effective outcomes. Nokia Corporation’s managerial competencies are divided into varied groups. Technology competency. : This is seen in the management of technology products; transit, purchasing, training and basic operations. Marketing knowledge: This refers to the management of the market in terms of competitor knowledge, supplier skills, customer needs, sales and business understanding. Management. This refers to how Nokia Corporation manages things. It refers to the management of employees, finance, strategic planning, the Nokia Way of operation and quality management. Leadership. This is based on leadership aspects. The company acquires this through its motivation of its employees, team work, management of staff welfare, performance and time management.
5.4 Corporate culture The corporate culture of Nokia is focused on achieving success in all of its operations. The Nokia Way is focused on speed and dynamism when making decisions. The company s is flat-networked with a certain level of bureaucracy, and provides equal opportunities for all of the staff. The company growth is based on values such as customer satisfaction, respect for people, achievement setting and progressive learning. Customer satisfaction refers to aims to meet the needs of the customers with effective strategies. The Nokia Corporation acquires this through dedicated sales and marketing, making quality products and responding to customer needs. On the other hand, respect for people is acquired through issuing opportunities for growth, team work and autonomy. Achievements are met through coming up with new ways to react to changes in the market, and through constant focus on the company’s objectives.
Finally, progressive learning aims to enhance employee skills through trainings and promotions.
5.5 Nokia’s value chain Value chain analysis accords value to the services and goods created by a company. These activities should operate at the most favorable level if the company is to acquire any actual competitive advantage. If the company operates in the best way, the value it acquires should be greater than the operating costs. The clients will also return to the company to patronize its services and products. The customers of Nokia Corporation do not buy their products from the company; instead they secure cellular service plans from service providers. The company sells its products to service providers or distributors. The company focuses on the manufacture of mobile phone devices. The company’s market share is about 40%, with international yearly revenue of €51 billion and an operating profit of €8 billion. Nokia has developed itself to be world class in leveraging its abilities in several areas. It also declined international sourcing of resources and instead it developed international brand building. This has led to an effective business model that focuses on the needs of clients.
5.6 Factors that deliver a competitive advantage
The competitive advantage for Nokia Corporation is based on a number of things. The company’s brand image is a huge one due to the market share and public image the company has acquired and established over time. The products the company produces are also of high quality to satisfy the needs of customers. Innovations enable the company to continue growing and providing quality products.
The demand for the products in Nokia is high. Many customers consider Nokia products to be luxurious objects and status indicators.
The company’s core competencies are well developed and provide the company with a competitive advantage. This is based on scale, brand and services.
5.7 Summary of Nokia’s strength and weaknesses
5.7.1 Strength Nokia Corporation has a huge network distribution and selling platform which helps it to achieve huge financial success. In comparison to other players in the industry, the company’s products are easy to use and meet the basic needs of the customer. The products are accessible to members of various social classes, and these same products meet the needs of various customers. Additionally, the re-sell value of the company is good in comparison with other companies.
5.7.2 Weaknesses Similarly, the company has a down side. The products produced have a certain level of unfriendliness. Some models are too complicated for users. The price levels are similarly high, prompting people to looks for other cheaper phones. The company also does not change fast to meet sudden changes in the market. It is also a weakness that the company only has a few service centers in Third World countries.
6 External Analysis The external analysis focuses on opportunities and threats present. It involves the use of PESTLE analysis, and Porter’s Five Forces among others.
6.1 PESTLE Analysis PESTLE analysis is a model that marketers use to asses and monitor the external market factors that affect the company. The model analyzes political, economic, social, technological, environmental and legal factors. Political factors. These refer to the involvement of the government and its policies. Political factors such as political stability, taxes, environmental laws and labor laws among others are considered. If the market of Nokia is uncontrolled, the operators and manufacturers are able to go about their business with no government interference. In nations like India and China where there is limited government involvement, the market is free to operate as it pleases. Economic factors. These factors affect how a company does its business and the profitability it acquires. They comprise of economic growth, interest rates, exchange rates and inflation among others. They also comprise of macro and micro-economic factors. Macro factors involve the management of demand, while micro economics deal with the spending of income.
When an increase in income, people have means to choose what they want. They are able to focus on other aspects as opposed to filling only their basic needs (in the case of cellular phones, these are texting and calling), and price is an important consideration. Social factors. This is based on shared beliefs and attributes of certain communities. The expansion of the information society has made telecommunications vital to clients as they use mobile phones for work and for leisure activities. The users of the products are able to choose, and their choices are based on the information they accessed on the products. Technological factors. Technological factors affect the innovative aspect of any company’s operations. They affect the growth and development of a company. In Nokia, there is the application of technological developments in its phone models such as MMS, Bluetooth, WAP and GPRS among others. The markets are technologically advanced in certain countries like China. Legal factors. These are policies or laws in place to guide business operations. They guide companies on what is right and what is unlawful. The legal platform should be followed, but it is also good for the company to operate with no interference. Environmental factors. These factors should always be considered because of the scarcity of resources and the need to apply ethical practices. The company operates in a competitive setting which makes it to focus more on innovative yet ethical practices.
6.2 Porter’s Five Forces
The Porter’s five forces show that a manager can be on the fore front over other firms if they are able to acquire a better undertsnadign of the industry where the company is in.

Power of new entrants. New entrants in any market are not appreciated. In theory, any company should be able go in and get out, and it can be nominal. These companies safeguard their high profit levels and they also meet rivals in the market. Any new products introduced by Nokia Corporation have a half chance of succeeding. Like the introduction of Nokia N95 Smartphone that became very popular. Power of buyers. The customers have the power to buy. This can refer to the system of monopsony. The buyer can set the price and influence buying. When Nokia suffered losses, the demand for its products stopped. This forced the company to look for new ways to attract customers and revive their interest. Threat of substitutes. Substitutes are products available in other companies that are of the same use. Price elasticity affects it as the products are present in the industry. The mobile industry has substitutes that threaten its operation. This comes with the emergency of something new that is better and meets the needs of the clients. Power of suppliers. The suppliers have the ability to change the prices for good. They provide raw materials and labor; given this, they can affect the price of a product. A drop in supplies leads to high costs, and having several suppliers can also lead to high costs. If this is the case for Nokia, its prices will be affected. It maintains several suppliers so that it can switch with relative ease and choose between suppliers. Competitive rivalry. This is necessary as it offers companies opportunities to improve their operations and products. This may however lead to no profit. This is measured by industry concentration. Nokia is innovative and searches for ways to improve its products in a tight market.
6.3. Strategic Group Mapping
A strategic group means a group of companies in an industry that are involved in a common business model or strategies. The groups rely on the dimensions applied. In the mobile industry, companies that have a similar strategic group to Nokia are Apple, Blackberry, and Samsung. These companies are global smartphone manufacturers.
6.4. Industry life cycle

Source: Euromonitor International, 2010
The life cycle shows major changes in the industry since 2006. The changes are in the form of the several phone models the company has introduced through the years.
The company is at its mature stage, this means that it is in a stage where new entrants will find it hard to compete. The products produced have been of high quality and satisfy the needs of customers. Technology has played a major role in this.
However, as can be seen from the graph, the company has gone through a slump in sales. This can be attributed to the quality of the products manufactured as well as the prices. Additionally, the level of competition has grown, making it possible for the industry to compete at the highest level. The slump in sales is visible from the graph as seen in the decline 2009.
6.5. Boston Matrix

Source: Cole, 2003 Problem child/question mark. A new product will have a low market share. It however, has the ability to grow and become a Cash Cow, but if it falls it becomes a Dog. The Nokia Corporation new product, the N-series Smartphone N96 finds it hard to acquire a large market share compared to prior phones like the N95 Smartphone. Cash cow. This arises when a product’s market matures and the demand for its products decreases, even if it has a huge market share. The Nokia Corporation has several products that have acquired maturity and declined with time. Its high end Smartphone N95 was highly in-demand, but the demand for it gradually decreased because of new models that made use of new technology. Star. This is a new product that has been produced. It elicits great market reaction and product sales are high. The Nokia Corporation and others of the same stature look for new products that can develop into Stars. They invest in Problem Children and Dogs to make them Stars and hope to acquire Cash Cows. Dog. A Dog is an emergent product or old market shares and sales that fall at a high speed. In the mobile phone industry, technology changes at a fast pace. In such a case, even the Star with a poor strategy can easily become a Dog.
6.6. Opportunities and threats
6.6.1. Opportunities
Nokia Corporation looks to shift from mobile phones to the production of computers. It considers Third World countries as a good market for its new computer products. The company has to focus on main clients so as to be successful.
6.6.2. Threats
The threats include the rise of new competitors that make the industry tight. However, the biggest threat is not getting new technology and its applications.
6.7. Appraisal of opportunities and threats
The company’s threats are overcome by creating opportunities: Focused differentiation. The Nokia Corporation competes through differentiation and it corners a section of the market where it offers its products. The company can join other major companies in mergers to create improved products. This involves the use of R&D resources. This will enhance management trend and more investment. Low-cost strategy. This applies when there is an increase in competition. This makes it possible for the company to acquire new skills and facilities, and to become effective in its main competencies. This will enable the company create affordable products with differentiated attributes. Clients are then able to acquire value for the products.
6.8. Strategic options
Differentiation. This can be done through merging with other companies in the industry on the production of quality products.
Focused low cost/ differentiation. This is focused on attaining product affordability for clients.
Integrated low cost/ differentiation. This integrates mergers and affordable cost.
7 Conclusion
The mobile phone industry is one of the most competitive, and Nokia is an effective player. The PESTLE analysis shows the relevance of Nokia in the industry, and the analysis using Porter’s Five Forces shows that Nokia is average when it comes to the production of products; it has high buyer ability; and faces stiff competition and low threats from new entrants and substitutes.
The internal analysis shows the major strategies for the company and what enabled it to be a leader in the industry. The paper focused on this and the causes for the slump the company experienced. The paper made recommendations on how these issues can be resolved.

References
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