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Nokia's Failure

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  • July 16, 2013
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Strategic Management
MBAE Assignment
Nafiz Mostafa, ID: 0712071085
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Executive Summary
This paper seeks to analyze an underperforming company, its strategy, the reasons behind underperformance and suitable recommendations for strategic change. As case study Nokia Corporation has been chosen, which has lost its market leadership in the mobile phone industry in the past five years, although it had market leadership for decades. In carrying out analysis of Nokia, this paper has critically scrutinized the mobile phone industry, the external environment and the internal dynamics of Nokia Corporation. Initially Mobile phone Industry analysis is carried out to determine that it belongs to the matured stage of the lifecycle and also to determine that the market has reached saturation and is unattractive for new entrants as identified by the Porter’s Five Forces model. The model shows that the bargaining power of customers is high and suppliers are moderate, whereas threat of substitutes and new entrants is low; however competitive rivalry is intense. The paper then goes on to analyse the impact of the PESTLE factors on the mobile phone industry and concludes that all of the factors have significant impact. Furthermore the industry’s profitability condition, its KSF’s products and participants are identified, along with Nokia’s competitors. The paper then moves onto the Internal Analysis of Nokia to identify its strengths and weaknesses and further evaluate its opportunities and threats. Critical analysis is then carried out of Nokia’s strategy with respect to corporate level, business level, functional level and the multi-domestic global strategy that it follows. The company’s structure and control is also evaluated. And finally the reasons for underperformance are analyzed which includes lack of leadership, failure to innovate, slow adaptability etc and the paper is concluded with recommendations.

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Executive...