Table of Contents1
F.Porter’s Five Forces Industry Analysis10
G.Key Success Factors12
H.Appraisal of Nokia’s Resources 13
I.Assessment of Nokia’s Financial Resources15
J.Review of Options and Recommendations for Future Strategic Direction16 K.Recommendations for Successful Implementation of Strategies18 L.Conclusion19
M.List of References20
I would like to express my gratitude to my lecturer Mr. G V Nathan. He has imparted his valuable knowledge in strategic management during my course of study and been generous in sharing his experience in the application of the various strategic analysis models. He has provided tremendous help to me in the course of the research and writing this paper.
Brief of Company
Nokia Corporation is a Finnish multinational corporation headquartered in Finland. Nokia is engaged in the manufacturing of mobile devices and in converging Internet and communications industries. With over 132,000 employees in 120 countries and global annual revenue of over €42 billion and operating profit of €2 billion as of 2010. It is the world's largest manufacturer of mobile phones with a global device market share was 31% in the fourth quarter 2010.
Company Contribution to the Economy
Nokia plays an important in the role of the economy of Finland where its market capitalization accounts for a third of the Helsinki Stock Exchange. The company accounts for more than 30% of the R&D budget and 9% of taxes (prior to its decline, it accounts for 18% of corporate taxes paid) in the country. Despite a drop in Nokia’s contribution to the Finnish gross domestic product (estimated to be US$231.982 billion), from 2.6% in 2008 to 6% in 2009, the Company remains as an important employer in Finland. Other than its direct influence on the Finnish economy, many of its partners and subcontractors has also grown into large corporations over the years.
Reason for Selecting the Company
Although Nokia has been enjoying many successes in the past few decades, the company performance has been declining in since 2007 when APPLE enters the smart phone arena. The reasons behind both the past success and its current decline offers valuable lessons to be learn.
Main Strategic Issues Facing the Company
Nokia had invented smart phone more than 10 years old and recently most are using the Symbian operating system. In comparison, APPLE employed a different technology to differentiate itself from Nokia smartphone: both the hardware and the software and since the creation of iPhone had dominated the smartphone industry.
Recent Strategic Dilemma
With a wide range of over 50 phone models where all are having basic T9 keypads, it would have been prohibitively expensive to abandon the existing product lines to touch screens.
Recent Strategic Choice
Nokia has revealed its plan to work with Microsoft to adopt the Windows Phone operating system as its' primary smart-phone strategy. The move is a dramatic shift for Nokia, which is completely abandoning what is still the market-leading, albeit declining, mobile phone operating system.
Nokia Corporation, “Annual Results 2010". 27 January 2011
Nokia and Microsoft form partnership. BBC. 11 February 2011. Available at: [Accessed on 10 June 2011].
Nokia Corporation is a market leader in the manufacturing of mobile devices and in converging Internet and communications. Despite its successes, Nokia has lagged behind in the smart-phone competition and it is experiencing declining market share.
The paper will analyse the general business environment for Nokia using the PESTEL analysis before drilling in to look at the competitive forces within the smart-phone market using the...