Challenges Faced by Nokia: A Management Perspective

Running head: FUNDAMENTALS OF MANAGEMENT 0
MANAGEMENT FUNDAMENTALS

FUNDAMENTALS OF MANAGEMENT 1
Table of Contents
Introduction................................................................................................................................2
Background................................................................................................................................2
Situational Analysis...................................................................................................................3
Pestle analysis of Nokia.........................................................................................................3
SWOT analysis of Nokia.......................................................................................................5
Management Issues....................................................................................................................7
Recommendations......................................................................................................................8
Conclusion..................................................................................................................................8
References..................................................................................................................................9

FUNDAMENTALS OF MANAGEMENT 2
Introduction
This paper outlines the various challenges faced by Nokia during its business life cycle.
These challenges are due to varieties of the reasons like competitors, market demand,
customer taster and preference, technological advancement and government policies, etc.
In addition, relating these challenges with the management issues including various theories,
models and concepts will help the decision makers to identify potential solutions, which can
improve the management ability to develop necessary solutions and thus enhance the overall
performance of the company.
Background
Nokia was incorporated in 1865 by Frederick Idestam and it is a Finland based company. The
company started their operation by engaging in the manufacturing of the mobile devices and
network equipment as well as with the related solutions and services at the international level
(Aspara et al, 2011). The organization divides their operations into four main segments
including, Mobile devices, and Networks, Multimedia and Enterprises solutions.
They have a tagline related to their integrated network i.e. Connecting People. Their vision
statement of Nokia is related to building reliable customer associations by presenting
captivating and valued customer keys that combine beautiful devices with context-enriched
services.
Considering the market share, the company captured 1.1 % of the smartphone market in the
first quarter of the year 2018. This is because of the HMD who expanded their smartphone
portfolios with various new model including Nokia 1, Nokia 5, Nokia 6 and Nokia 8 during
the 2018 Barcelona event (Stipe, 2018). These all models are powered by Google Android
and this shows that Nokia did not do the pervious mistake, like that of partnership with
Microsoft. However, Nokia still faces challenges from the Samsung, Apple and Huawei who
hold top position in the smartphone market due to their huge capital investments. In addition,
due to less capital, the company is not able to invest much in marketing of their products.

FUNDAMENTALS OF MANAGEMENT 3
Situational Analysis
This analysis can be effectively made if the management evaluates various internal and
external factors bounding the organization and having a significant impact on the business
operations. SWOT and PESTEL analysis can help the company to effectively evaluate both
the internal and external environment and thus make a necessary strategic decision in a timely
manner (Helms and Nixon, 2010).
Pestle analysis of Nokia
 Political Factors – The political factors comprises all within in the relation with the
government and policies. Nokia gained success from the Finnish policies which help
Nokia in their advancement of the products. Finnish government try to best simplify
the effective functioning of the economy by aiming resources to the reduction of
market catastrophes (Breznitz and Ornston, 2013). Although, it was not only the
Finnish government but also as a Global company i.e. Nokia, who play a significant
role in the expansion of information society and national technology strength. In
addition, they also need to comply with all other international countries in which they
had started their operations.
 Economic Factors – In the past few years, Nokia again started growing swiftly and
had a positive effect on the economy. The company have to undergone different
metamorphoses and this history of the company has also included various
disinvestments, acquisitions and joint venture. With these experiences, the company is
now learning and playing in the market with their various new products and earn a
revenue about € 23.147 billion in the year 2017.