Environmental Factors Affecting Nokia's Failure and Types of Competition for Maggi

Running head: Principles of marketing 0
Principles of marketing
8/1/2018

Principles of marketing 1
Question 1
Nokia is the company I have selected to explain, how it has failed to monitor its marketing
environment. Nokia is the international mobile phone brand, it is Finland based company, it
is formally known as Nordic Mobile Telephone (NMT). It is founded in the year 1981; Nokia
DX200 was its first digital telephone. Fredrik Ides tam and Leo Michelin were the founders
of Nokia. Nokia suffered a failure in its business in the year 2004; company also lost its
market share and this result in decrease in revenue. Reason behind Nokia’s failure was its bad
environmental scanning (NOKIA, 2018). Nokia was failed to analyse the market trends,
Nokia didn’t make faith on windows phone until 2011, Nokia also failed to respond to the
iOS and Android, on the other hand Samsung responded quickly, early responding of
Samsung to the iOS and Android gives him advantage and made it brighter in comparison to
Nokia. Nokia faced a serious business challenges in smartphone market, if Nokia had flown
with the technology and kept analysing its market environment, would never see the failure in
smartphone market (BBC NEWS, 2013).
There are two types of environmental factors that affect the business of a firm, these factors
classified as micro and macro factors or elements. Micro consists of internal environmental
factors, and macro consists of external environmental factors.
Examination of micro and macro elements that affected the business of the smartphone
leader Nokia is given below:
Macro environment factors:
Technological factors: The technology had affected Nokia immensely, social and
technological factors both affected Nokia’s business. Development of Android and various
applications had changed the market of mobile phones, development of these were
transformed multiple communication devices into hand set computers
(LIBRARIES,2018).This led customers to perform multiple tasks with phones, like
photography, videos, business tasks, and many more. But Nokia was stuck with his own
operating system, and this resulted in less attracted younger consumers (Hofmann, David,
Jacobs, and Landy, 1995). Nokia also had not been able to tap the lucrative market of tablets,
notepads, and many more innovative technology devices; this was resulted in reduced
competitive edge for Nokia (FEEDOUGH, 2018).
Environmental factors: Environmental factors also had great impact on Nokia’s flow of
business, as Nokia faced the problem of disposing of used products in an environment
friendly way. Disposal of lithium batteries and recycling of electronic devices are very costly
in nature (Sampson and Robert J, 2009). Increased cost of lithium and other raw material
also had great effect on Nokia’s business. Climate change was also the great concern, and
still it is the biggest concern for everyone, global warming was also disrupted the supply
chain management of the Nokia immensely. Few countries also increased the cost of
production in their country; this had effected the production of Nokia in those countries
(Brain mass, 2018).

Principles of marketing 2
Social and cultural factors: Social and cultural factors became the hurdle in Nokia’s
performance, as adoption of smartphones and growing use of applications hindered the way
of Nokia’s smartphone business (Ebstudies, 2013). Google and Apple designed various apps
for their operating systems, but Nokia’s design and capacity was unable to utilize those
designed apps in their smartphones, because Nokia utilized its Microsoft Windows Phone
only. Association of Apple with smartphone in countries like USA deeply cut the Nokia’s
market. Nokia had to deal with various misconceptions that, there are only two brands in the
market i.e. Apple and Samsung, and only two operating systems iOS and android, this led to
the downing of Nokia’s products in the market (bizfluent, 2018).
Micro environment factors:
Employees: Employees are very important for the survival of any company, employees are
the assets of the company, and Nokia didn’t have efficient employee background that led to
the downfall in the market (Economic discussion, 2018). Employees should always update
with new technologies and ideas, but Nokia’s employees didn’t possess these attributes, on
the other hand company also has the responsibility to motivate its employees (Felin, Teppo,
and Foss, 2005). Samsung, Apple, Sony were the competitors of Nokia, due to lack of
employees base and support Nokia didn’t make international business exposure, and unable
to compete with these competitors (Diamond & Pintel, 2008).
So it is concluded from the above explanation that, analysis of both types of environmental
factors macro and micro is very crucial for the survival of any business, Nokia was failed to
monitor its both types of environmental factors, if Nokia analysed its environment
thoroughly, would never suffered with failure of its business, as everyone knows Nokia was
the only company who has launched first ever smartphone in the world, but today Nokia is
far away from competition (Management education, 2015).
Question 2
I have taken product here is Maggi, to explain its different types of competition present in the
market. Maggi is an international brand of soups, noodles, and sauce. It has its origin in
Switzerland in 1884; it was acquired by Nestle in the year 1947. Julius Maggi founded the
company Maggi in Germany (Nestle, 2018).
2 minutes Maggi had faced a drastic situation in India, as Maggi in India used excessive
quantity of lead beyond the permissible limit, as permissible quantity of lead is 0.01ppm,
Maggi contained 17ppm of lead, and this had led to the ban of Maggi in India in the year
2014. Earlier Maggi was the only manufacturer of noodles in the world, but now there are
various competitors of Maggi in the world, like Yippee! , Knorr soupy noodles, Ching’s
secret and Top Ramen.
Market is divided into three types of competition at macro level of the market, these are
explained below: