Nokia OYJ: Financing the WP Strategic Plan Harvard Case Solution & Analysis

Nokia OYJ: Financing the WP Strategic Plan Case Solution

Introduction

In the year 1865, Nokia was formed by a German in Southern Finland. Started from a little known company, now Nokia is considered as a leading brand in mobile communications with significant human capital and market share as it is operating globally in more than 150 countries. As it massively forms its growth it expanded and growth its business layouts in various segments such as:

  • Nokia Siemens Networks
  • Devices and Services
  • Location and Commerce

Problem Statement

It is expected that there is an intense competition in the mobile communication industry and many large players such as Apple, Samsung, LG and many more are operating in the industry with greater market share. Hence, they are following price war strategy in order to attract greater number of customers and to get greater market share. Therefore, the management of the company is facing issues in order to maintain their competitive position in the industry and facing financing issues in order to meet the strategic and corporative objectives of the company.

1.      SWOT Analysis

Strengths

  • Market dominance: Its market share its more than its top 3 competitors combined
  • Good brand name and brand loyalty
  • Takes into account customer preference
  • Nokia ranks 41st in the world most top companies
  • Reliable good quality products
  • Value for money has good resale value

Weakness

  • Playing catch up with its competitor falling to bring differentiated products with high level of competitive advantage in the market
  • The market share of Nokia is declining constantly due to lack of innovation products
  • Fails to capture a first mover advantage
  • Insufficient marketing as opposed to its competitors
  • Their software Symbian is under great criticism

Opportunities

  • Emerging markets like India and China holds great potential
  • Middle east and North African Nations are potential markets
  • New innovative markets with high competitive advantage
  • Secure weakening position by entering into contract with network operators to expand market share
  • Acquire better software systems

Threats

  • Direct competition and threats from companies are not considered as competition
  • Smart phones are not competitive enough
  • Fake and cheap products claiming to be Nokia can damage brand

2. Key Features of Strategic Plan

The management of the Nokia Company had three alternatives for the strategy of revival of the business. The three alternatives for the management of the company were to continue operating its traditional software system for the future products of the company, switch to the android based software and systems for the new products of the company or switch towards the Microsoft’s windows based systems and software’s by becoming its partner.

The management of the company decided to partner with the Microsoft Company for the future product offerings and business interests of the company. The silent features of the partnership understanding and agreement with the Microsoft organization are illustrated below.

Critical features of the partnership with Microsoft:  

  • Nokia will incorporate and continue to offer the navigation and mapping applications with the WP system.
  • Microsoft will contribute in the partnership in terms of applications, social media, search engines and advertisement to the Nokia products.
  • Both organization will coordinate and cooperate for the development of new applications for the upcoming systems and products.
  • The application store of both the organizations will merge with each other.
  • Nokia will pay the Microsoft contribution for each device sold or shipped to the markets.
  • The Nokia Company will provide the hardware and technical support for the simultaneous development of various WP products.
  • Microsoft will supplement the marketing, advertisement and product development initiatives for the products under the partnership.

How it will help Nokia

The partnership with the Microsoft Company will likely supplement the financials of the Nokia Company as their resources in terms of finances have dried up over the period of time due to the decline in the sales and revenues of the company...........

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