Impact of Information Exchange on Business Strategies and Performance

The assignment discusses the implications of information exchange between a firm and its consumers, intermediaries, and employees. The study highlights that change in consumer interests can have negative implications such as reduction in profit and market position, goodwill, and efficiency. However, establishing continuous conversation with consumers through various channels provides opportunities for sharing issues and improving products and services, leading to long-term relationships and increased trust. Moreover, the report emphasizes the importance of intermediation, dis-intermediation, and re-intermediation cycles in determining business strategies associated with using intermediaries or middlemen for various business objectives.

Critical Analysis

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PRACTICES OF INTERMEDIATION, DIS-INTERMEDIATION AND RE-
INTERMEDIATION (IDR CYCLE)..............................................................................................3
IMPLICATIONS OF INFORMATION EXCHANGE BETWEEN THE FIRM AND ITS
INTERMEDIARIES AND CONSUMERS.....................................................................................6
Implications of information exchange between the firm and its.................................................6
intermediaries..............................................................................................................................6
Implications of information exchange between the firm and its.................................................7
consumers...................................................................................................................................7
CONCLUSION .............................................................................................................................7
REFERENCE ..................................................................................................................................9

INTRODUCTION
In the contemporary business environment, supply change management plays most
crucial role in the success of an organization. For development of an efficient distribution
system, companies consider several concepts that have significant impact in business policies. It
includes intermediation, dis-intermediation and re-intermediation. These elements play vital role
in decision making along with market related operation (Kim, Nam and Stimpert, 2004). This
report examines all these factors with reference to business operations of Nokia. The company
was found in 1965. It is one of the leading telecommunication and mobile device manufacturing
company of the world. In 2013, Nokia was acquired by Microsoft (Nokia About Us, 2015). This
report is going to analysis different factors of distribution system which are used by an
organization such as intermediation, dis-intermediation and re-intermediation. Apart from that
this report is also discussing the implications of information exchange between the firm and its
intermediaries and consumers.
PRACTICES OF INTERMEDIATION, DIS-INTERMEDIATION AND RE-
INTERMEDIATION (IDR CYCLE)
Intermediaries are having significant role for managing distribution, sales and marketing
of different goods and services as per the nature of products. In this context, it has been analysed
that the industry relationships among buyers, suppliers and middlemen have been changed over
time due to three types of events that change as per the nature of transaction process such as
intermediation, dis-intermediation and re-intermediation (Jap and Mohr, 2002). It is examined
that the importance of intermediation is greatly increased when a new firm interjects itself among
buyers and suppliers. In addition to that disintermediation is carrying out when an established
middleman is pushed out of a market niche. At the end, reintermediation occurs when a once
disintermediated player is able to re-establish in the market itself as an intermediary (Chircu and
Kauffman, 1999). This process is called IDR cycle.
In the context of Nokia, company has more than 10 manufacturing plants located in 9
countries such as Brazil, India, China, Finland, UK, Hungary etc. In order to manage distribution
of different products, business entity uses several channels such as redistribution, dealer,
franchisees etc. In 1995, there is significant transformation identified in supply chain
management of business entity (Nokia About Us, 2015). In this process, business entity has
integrated various element of business management by linking suppliers, factories, telecom
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operators, channel partners, iHud, etc. It provided significant flexibility to company and reduced
the inventory management cost.
The evaluation of Nokia distribution system has found that the business entity has
considered different aspects of IDR cycle. In India, Nokia has started distribution of different
phone by establishing partnership with Hindustan Computers Ltd. (HCLI) that had an extensive
distribution network. This approach has provided significant benefits for developing of an
efficient distribution and facilitated significant growth opportunities (Kim, Nam and Stimpert,
2004). In this process, HCLI was acting as intermediary. This approach has facilitated significant
benefits to Nokia such as increase in sales, market share and profitability of business. However,
McAfee and Brynjolfsson (2008) have analysed some negative aspects of intermediation such as
losing that control on sales and distribution of different products. This approach has increased
the dependence of business entity on market intermediaries of Nokia that has created significant
issues for attainment of sales targets. Another disadvantage is if the intermediary doesn't want to
renew their contract than business entity can lost sales channel.
Furthermore, it has evaluated that the management of Nokia has tired to reduce the role
intermediaries as a act of disintermediation. In this regard, the telecommunication company has
established relationships with IT reseller markets, priority dealers, value added sellers, multi
brand. In this process, company also opens several Nokia's owns outlets that play important role
to increase effectiveness of distribution system (Simmons, 2007). This approach has found very
effective to lower the dependence of Nokia on existing intermediaries. By considering the
approach of dis-intermediation, it has found that the process of dis-intermediation also influences
business entity tries to establish direct contact with buyers by applying different approaches. On
the other hand, Steele (2009) has critically evaluated that the consumer has assessed the lack of
personal help in making purchasing decisions due to disintermediation. For the manufacturers
and wholesalers, disintermediation increases the cost of marketing and requires employing a
sales transaction staff and maintaining selling facilities. It also leads negative impact on various
services such as brokers and agents, who might provide protection to their clients (Zeng and
Reinartz, 2005). The end result of disintermediation could reduce the transparency in markets
due to competition.
Due to emergence of smartphones with different backgrounds such as iOS, Android etc.
Nokia has faced significant reduction in sales and profit of business entity. In this regard, it has
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been analysed that the nokia has adopted the strategy of reintermediation in which business
entity is trying to establish new joint ventures with various other intermediaries as per the current
market trends. In the context of present business environment, where online shopping or e-
business activities have recorded significant growth in last 5 years (Gallaugher and Ransbotham,
2010). This thing has increased the importance of online shopping sites, retailers along with
merchants for increasing sales and market share of particular organization. In this context of
Nokia, company is currently operated by Microsoft therefore management develops joint
ventures and partnership with various online retail companies such as Amazon, E-bay etc
(Hoffman and Fodor, 2010). In addition to this approach, business entity is also selling its new
products with the help of certain online platform. Therefore, both manufacturing firm along with
retailer or inter-mediator online retail companies make effort to promote different kinds of
mobile devices. In the context of online business operation, the study of Reynolds (2010) has
found that emergence of social media and online trading operations have created significant
impact on distribution strategies of an organization. If an organization avoids the online
platforms that business entity faces various issues due to reduction in sales and market share of
company. Therefore, it can be stated that reintermediation has found very effective for managing
level of market competition along with the market position of Nokia (Turban, McLean and
Wetherbe, 2010). However, Nokia can face several issues related to negative marketing due to
application of the approach of reintermediation from past intermediaries.
In the context of IDR cycle, it has evaluated that an organization uses wide range of
business strategies for handling of business distribution system. In this process, an organization
uses various strategies for selection of intermediaries, opening of new outlets as well as
marketing of different products and services (Turban and Volonino, 2010). Further assessment
has evaluated that different online tools such social media, internet websites along with shopping
sites have played important role to influence sales and profitability of Nokia. Jap and Mohr
(2002) has argued that every business entity uses different forms of IDR cycle as per the current
market trends through which management can reduce the dependence on intermediaries and
increases the sales along with market. In this process, satisfaction of consumers requires to
consider the key concept of business management. This is because Nokia has faced downfall in
sales due to high quality and innovative products of other mobile brand such as Samsung, Sony
and Apple. In this context, it is analysed that establishment of good relationship with different
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intermediaries and strategic partners has played most important role for attainment of different
corporate goals as per the distinct needs business (Chircu and Kauffman, 1999) . This approach
has been evidenced when Nokia's effective chain of command, its well-placed crisis plan along
with an aggressive, multi-pronged strategy have found mos effective tools to avoid production
losses for its new cellphone when a March 2000 fire damaged its entire supply of semiconductor
chips at the Royal Philips Electronics plant.
IMPLICATIONS OF INFORMATION EXCHANGE BETWEEN THE
FIRM AND ITS INTERMEDIARIES AND CONSUMERS
Nokia is one of the leading mobile phone makers of the world. Therefore, exchange of
information between the firm and its intermediaries and consumers is having significant impact
on business entity. In this context, a detail discussion is carried out below:
Implications of information exchange between the firm and its
intermediaries
Intermediaries play vital role in the success and growth of company. Therefore, an
appropriate transmission of information between the business Nokia and its intermediaries leads
several implications. Simmons (2007) has evaluated the exchange of information between a
mobile company and its intermediaries such as retailer, stockist, wholesaler, online retail firms
etc. provides an opportunities to business to assess the change in current market trends due to
change in interest of consumers, increase in sales of other companies due to hi-tech and unique
products (Steele, 2009). On the basis of this data, the management of business entity is able to
develop wide range of strategic plans and can take different kinds of business decisions as per
the current market trends that have direct impact on profitability, sales and market share. In this
regard, if Nokia succeeds in establishment of link between current business policies with market
trends than the management would found positive outcomes in the form of increase in
satisfaction of consumers, increase in market share.
On the other hand, incompetence of present market trends along with change in interests
of consumers influences several negative implication such as reduction in profit and market
position as well as goodwill (McAfee and Brynjolfsson, 2008). Apart from that it has been
analysed that the communication between Nokia and its intermediaries provides an opportunities
to share their issues while handling various business operations. By removing these issues, Nokia
is able to develop long term relationship with intermediaries that has direct impact on efficiency
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of business entity that also leads positive impact over sales of firm. Apart from that by
establishing appropriate conversation system, different retailers, multi-brand outlets etc. can
select appropriate marketing strategies with reference to innovative marketing tools. In this
context, Gallaugher and Ransbotham (2010) have argued that by selecting best marketing tools
and promotional strategies, enterprise is able to generate good image of business in the
perception of consumers.
Implications of information exchange between the firm and its
consumers
Customer satisfaction is a key element of organizational success. The study of Reynolds
(2010) has found that continuous conversation between company and its consumers plays
important role to assess change in lifestyle and interest of consumer. In addition to that that this
conversation provides an opportunities to business entity for assessment of issues and problems
that have been faced by consumers from particular product and service. This information assists
management to improve quality of products and service that have positive impact on satisfaction
of consumers (Turban, McLean and Wetherbe, 2010). In the context of Nokia, management
acquires wide range of data associated with change in lifestyle of people through company is
able offer new mobile devices with some unique features. All these elements provides an
opportunity of company for developing of long term relationship with consumers and increases
trust of consumers. This is because unsatisfied customer leads the business towards the loss.
Zeng and Reinartz (2005) further argued that by establishing continuous conversation
with buyers through social networking sites, emails etc., an organization is able to promote its
new product range and assesses the feedback of consumers on efficiency and quality of products.
In this regard, if Nokia gets positive comments that indicate growth in business. On the other
hand, negative comments of consumers influence business entity to implement improvements in
business management along with functionality of products (Simmons, 2007) . This approach is
having great impact on strategic decisions of business.
CONCLUSION
On the basis of above assessment, it can be concluded that every business entity adopts
several strategies for accomplishment of different business objectives. This report has addressed
that intermediation, dis-intermediation and re-intermediation cycle determines the different kinds
business strategies associated with usage of intermediaries or middle men for various business
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objectives such as distribution of products and supply chain management. This report has found
that exchange of information between company and its intermediaries and consumers is creating
huge impact on various strategies decisions as per the distinct needs of business.
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REFERENCE
Journal and Books
Gallaugher, J., and Ransbotham, S., 2010. Social Media and Customer Dialog Management at
Starbucks. MIS Quarterly Executive. 9(4). pp.197 – 212.
Hoffman, D. and Fodor, M., 2010. Can You Measure the ROI of Your Social Media Marketing.
MIT Sloan Management Review. Fall. pp.41-49.
Jap, S.D. and Mohr, J.J., 2002. Leveraging Internet Technologies in B2B Relationships.
California Management Review. 44(4). pp.24-38.
Kim, E., Nam, D. and Stimpert, J., 2004. The Applicability of Porter’s Generic Strategies in the
Digital Age: Assumptions, Conjectures, and Suggestions. Journal of Management. 30(5).
pp.569-589.
McAfee, A. and Brynjolfsson, E., 2008. Investing in the IT that Makes a Competitive
Difference. Harvard Business Review. July-August. pp.98-107.
Reynolds, J., 2010. E-Business A Management Perspective. Oxford University Press.
Simmons, G., 2007. i-branding: Developing the Internet as a branding tool. Marketing,
Intelligence and Planning. 25(6/7). pp.544-562
Turban, E., McLean, E. and Wetherbe, J., 2010. Information Technology for
Management:Transforming Organisations in the Digital Economy. John Wiley, New York.
Turban, E. and Volonino, L., 2010. Information technology for management: Transforming
organizations in the digital economy. J. Asia: John Wiley and Sons.
Zeng, M. and Reinartz, W., 2005. Beyond Online Search: The Road to Profitability. California
Management Review, 45(2). pp.107-130.
Online
Chircu, M. A. and Kauffman, J. R., 1999. STRATEGIES FOR INTERNET MIDDLEMEN IN THE
INTERMEDIATION / DISINTERMEDIATION / REINTERMEDIATION CYCLE. [Pdf.].
Available through:
<http://misrc.umn.edu/workingpapers/fullPapers/1998/9803_090198.pdf>. [Accessed on
10th November 2015]
Nokia About Us. 2015. [Online]. Available through: <http://company.nokia.com/en/about-us/our-
company]>. [Accessed on 10th November 2015]
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Steele, D., 2009. Disintermediation and Reintermediation by E-business. [Online]. Available
through: <http://misrc.umn.edu/workingpapers/fullPapers/1998/9803_090198.pdf>.
[Accessed on 10th November 2015]>. [Accessed on 10th November 2015]
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