Nokia's Operating Strategy
Nokia, Oyj
Table of Contents Introduction 1 Internal Analysis 2 External Analysis 5 Solutions to Strategic Challenge 6 Recommendation 9
Introduction A. Company Summary:
Nokia Corporation (“Nokia”) has been the undisputed leader in the mobile phone space for as long as the market has been in existence. Under the previous generation of mobile phones, Nokia grew in scale and expanded its distribution channels and manufacturing flexibility to secure its place as the world’s largest handset developer. The handset giant currently commands roughly 37% of the world’s market for handset devices- manufacturing products in 10 countries across Europe, Latin America, and Asia. Further, the company has also built a solid brand that is highly valued for its reliability.
Since the launch of Apple’s iPhone in 2007, however, Nokia’s dominance has been challenged. Apple’s radical expertise in operating systems featured user-interface and functionality technology that changed the way other handset manufacturers thought about their design philosophies.
Nokia has been slow to adapt to the smartphone revolution and has since witnessed a steady erosion in its market share as it falls further and further behind a rapidly growing smartphone market. It has recently seen its market share slip from 44.6% to 36.6% and the company’s share price has also fallen by almost two-thirds since the iPhone launch in 2007 wiping about €60 billion off the group’s market capitalisation. B. Business Strategy Issue and Objective:
Nokia’s strength has been its hardware in feature phones and the company is losing the “middle-consumers” as consumers shift from midrange feature phones to smartphones. Symbian, Nokia’s core operating system platform, is, however, muddled by its user-difficulty, its lackluster developer tools, and relatively weak selection of applications. Analysts forecast that the company will not be a major player in the smartphone market.
While Nokia still
Table of Contents Introduction 1 Internal Analysis 2 External Analysis 5 Solutions to Strategic Challenge 6 Recommendation 9
Introduction A. Company Summary:
Nokia Corporation (“Nokia”) has been the undisputed leader in the mobile phone space for as long as the market has been in existence. Under the previous generation of mobile phones, Nokia grew in scale and expanded its distribution channels and manufacturing flexibility to secure its place as the world’s largest handset developer. The handset giant currently commands roughly 37% of the world’s market for handset devices- manufacturing products in 10 countries across Europe, Latin America, and Asia. Further, the company has also built a solid brand that is highly valued for its reliability.
Since the launch of Apple’s iPhone in 2007, however, Nokia’s dominance has been challenged. Apple’s radical expertise in operating systems featured user-interface and functionality technology that changed the way other handset manufacturers thought about their design philosophies.
Nokia has been slow to adapt to the smartphone revolution and has since witnessed a steady erosion in its market share as it falls further and further behind a rapidly growing smartphone market. It has recently seen its market share slip from 44.6% to 36.6% and the company’s share price has also fallen by almost two-thirds since the iPhone launch in 2007 wiping about €60 billion off the group’s market capitalisation. B. Business Strategy Issue and Objective:
Nokia’s strength has been its hardware in feature phones and the company is losing the “middle-consumers” as consumers shift from midrange feature phones to smartphones. Symbian, Nokia’s core operating system platform, is, however, muddled by its user-difficulty, its lackluster developer tools, and relatively weak selection of applications. Analysts forecast that the company will not be a major player in the smartphone market.
While Nokia still