Nokia: Strategic Analysis of Leadership and Management

This report provides a comprehensive analysis of Nokia's strategic management, leadership, and market position within the competitive landscape of the telecommunications and consumer electronics industry. It begins with an overview of Nokia's history, highlighting its evolution and the challenges it faced, particularly with the rise of Android and competition from companies like Samsung. The report delves into the internal and external factors impacting Nokia, including its declining market share, financial performance, and the need for strategic adjustments. It examines the relationship between various strategies, focusing on product pricing, quality, design, and research and development. The report evaluates the external environment, considering political, economic, social, technological, legal, and environmental factors. It proposes a revival strategy centered on improved research and development, attractive product designs, and enhanced product quality. The report concludes with recommendations for implementing the proposed strategies, including a discussion of suitable leadership styles and an implementation plan, emphasizing the importance of stakeholder expectations and the need for organizational change.

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction:...............................................................................................................................3
Overview of the company:.........................................................................................................4
Situation of the Company:.........................................................................................................5
Relationship between the Strategies:.........................................................................................7
External Environment Analysis:................................................................................................9
Political:.................................................................................................................................9
Economic:..............................................................................................................................9
Social and Cultural Factors:.................................................................................................10
Technological:......................................................................................................................10
Legal:....................................................................................................................................11
Environmental:.....................................................................................................................11
Evaluation of the Strategy:.......................................................................................................11
Selection of the leadership Strategy:........................................................................................12
Implementation Plan:.................................................................................................................0
Recommendations and Conclusions:.........................................................................................0
References:.................................................................................................................................1

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Introduction:
The importance of efficient business strategy in the modern business context, is
significantly high. With the idea of the impact of the globalization on the modern business
industry, the increasing intensity of the business competition is pretty visible. Majority of the
business analysts have claimed that one of the major reason of the intense market competition
is the entry of the new organizations in the business industry. In recent years, almost each and
every industry is seen to be populated with the new entrants and that is increasing the
pressure on the existing organizations. The survival and the growth of the existing
organizations are becoming tougher and that is pretty evident with the increase in the urgency
of the existing organizations in applying different strategies. Weinstein (2013) claimed that
majority of the business organizations are observed to apply the low pricing strategy for the
effective management of the detrimental impact of the business competition on their business
operations. The fundamental objective these organizations in applying the low pricing is
considered to be the urge of the in gaining the cost leadership over the competitor
organizations. However, Brynjolfsson, Hu and Rahman (2013) highlighted an important fact
while claiming that many of the existing business organizations are more inclined in
improving the quality of the products rather than providing the products at cheaper rates to
manage the impact of the competition.
The paper is dedicated in the elaboration of one such business organization that faced
considerable amount of impact of the intense business competition, in the form of Nokia.
Nokia is one of the established name in the global telecommunication and consumer
electronics industry. However the selected company has faced significant amount of effect of
the price war and the intense level of competition triggered by the continuous product
development of the competitor organizations. The paper provides a brief overview of the

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selected organizations and along with that, it focuses on the formation of the strategies that
have the potential of improving the condition of the selected company. In the formation of the
strategy, the company precisely discusses regarding the stakeholder expectations along with
the performances of the company with a precise focus on the strategic management theories.
Apart from this, the paper identifies the external factors that can affect the strategy making
and the business operations of the selected company and along with that, the paper explains
the encouragement that the formed strategy provides to the change and evaluates the
contribution of the strategy in the improvement of the selected organization. Apart from this,
the paper elaborates the best suited leadership style that can be utilised for the effective
implementation of the formed strategies with a precise focus on the advantages of the style of
leadership. In addition this, the paper includes an implementation plan for the formed
strategies and shows how the plan can fulfil the major stakeholder expectations. In addition to
the implementation plan, the paper provides a set of important recommendations for the
efficient implementation of the new strategies.
Overview of the company:
The selected company is Nokia or professionally known as Nokia Corporation. As
mentioned earlier, the company is one of the biggest names in the consumer electronics and
telecommunications industry owing to the significantly rich history of the company in
producing quality consumer electronics and telecommunications products. The company was
established in the month of May of 1865 by a trio of Finnish professor, Leo Mechelin,
Finnish mining engineer, Fredrik Idestam and Eduard Polón (Nokia.com 2019). The selected
organization is currently headquartered in Espoo, Finland. The company is one of the elite
companies that are able to serve the customers across the globe with the optimum quality
products. However, the worldwide business operations of the selected company has faced a
major decline in the recent years owing to the inappropriate formation of the strategies from

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the part of the senior level management of the company. The absence of the sense of urgency
from the part of the senior management of the company which includes the chairman of the
organization, Risto Siilasmaa, the chief financial officer of the organization, Kristian Pullola
and Rajeev Suri, the president and chief executive officer of the company was the
fundamental reason behind the declining sale of the products of the selected company
(Nokia.com 2019).
The company became irrelevant in the market and was unable to achieve the
preferences of the customers through the design of their products and the outdated strategy of
the senior level management of the organization was the key reason of such a setback for the
selected organization. The impact of this is pretty evident with the declining revenue of the
selected organization which is recorded to be 22.56 billion Euro in the year 2018 (Nokia.com
2019). However, the company’s operating income has slightly increased and reached 1.22
billion Euro in the same year (Nokia.com 2019). The company is on the verge of a transition
and the improvement in the operating income of the company is largely possible due to the
excellence in the services of 102761 number of employees of the organization (Nokia.com
2019). The company is observed to have two different divisions for smoother executions of
their business strategies in the form of Nokia Technologies and Nokia Networks. Apart from
this, the company owns a set of subsidiaries in the form of Alcatel Submarine Networks, Bell
Labs, NGP Capital, Alcatel Mobile and Nuage Networks (Nokia.com 2019).
Situation of the Company:
The reason behind the selection of the organization is the declining condition of the
organization and that was more prominent with the introduction of Android. The chosen
company lost a significant share of the market to one of their main competitor, Samsung and
one of the fundamental reason of this setback was their usage of the Symbian Operating

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System (Bouwman et al. 2014). The idea of using the above mentioned operating system
horribly failed in the market in comparison to Android. Apart from this, the company’s
limitation in the research and development section was one of the significant reason of their
decline.
Apart from this, the introduction of the E-series was a major flop for the selected
organization and along with that, many of the handsets of the chosen organization were not
able to attract the customers owing to their incapability in achieving the preferences or the
requirements of the customers. One of the major reason of the company’s loss of market
share was considered to be the absence of the strong products in the product portfolio of the
selected organization. In addition to this, the quality of the products of the selected
organization started to decrease in a significant manner and that was pretty visible with the
low voice quality of the products and the absence of the attractive or stylish design in the low
priced products of the selected organization (Tseng, Liu and Wu 2014).
Many of the customers of the modern generation prefer to carry the low weight
mobile phones and majority of the low priced products of the selected organization were seen
to considerably heavy which was contrary to the preferences and the requirements of the
customers. The significant market share of Samsung and I- phone and the introduction of the
improved products from the part of these organizations were considered to be responsible for
the wipe out that the selected organization faced in the year 2014 (Singh 2014). In addition to
this, the impact of the low priced products of the Chinese organizations was one of the
influential factors that triggered the price wars and made the selected organization feel the
heat. Many of the Chinese organizations also introduced exact copy of the Nokia’s bestseller
products at a significantly lesser prices which had the potential of affecting the customer base
of the selected organization.

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In the modern consumer electronics industry, a significant change is pretty prominent
with the increasing preferences of the customers towards the smartphones with the
application of the improved operating system. However, the selected organization was unable
to achieve the idea of the modern market trends and that was one of the main reason that
made the company irrelevant in the modern business world.
Relationship between the Strategies:
The revival strategy for the selected organization will be based on four different
aspects which are the pricing of the products, the quality of the products, the design of the
products and the research and development.
One of the main target for the company will be to improve their research and
development. As mentioned earlier, the selected organization became irrelevant to the market
owing to their usage of the Symbian Operating System (Bouwman et al. 2014). The ability of
the other market competitors in achieving the qualities such better efficiency or the improved
processing with the application of the Android operating system was considered to be a major
competitive advantage for the competitor organizations in comparison to the selected
organization.
Apart from this, the company was seen to be inefficient in conducting the appropriate
research and the development for the efficient introduction of the smartphones. With a
precise focus on the increasing preferences of the modern customers over the smartphones,
the company’s incapability in identifying the modern trends was a major shortcomings for
them. Hence the company’s incapability in research and development section is pretty
prominent (Buil, Martínez and De Chernatony 2013). The company needs to increase the
efficiency of their research and development department for the effective development of the

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operating system and improvement of the features of their products with a precise focus on
the modern trends and the preferences of the customers.
One of the major success factor for the business operations of the modern
organizations are seen to be effective identification of the preferences of the customers. With
the increasing intensity of the business competition, the importance of achieving the views or
the opinions of the customers through the design of the products is seen to be significantly
high. Considering the capability of the competitor organizations such as Apple or Samsung in
introducing attractive designs, the selected organization is facing tough competition. This is
one of the prime reason responsible for the incapability of the selected organization in
penetrating the modern generation customer groups. Hence the impact of the company’s
incapability in introducing the lucrative designs for products is pretty evident with the
decreasing market share and revenue of the selected organization. Under such situation, the
company is expected to make sure that they identify the customer demands or the
requirements in an efficient manner and incorporate the attractive designs in their products
(Buil, Martínez and De Chernatony 2013). This will be crucial for the organization in gaining
the preferences of the customers towards them and in influencing the customers towards the
repetitive purchases.
The improvement in the quality of the products of the selected organization will be
crucial aspect for their business as the low voice quality, picture quality or the heavy weight
of the products of the selected organization are seen to create considerable amount of
dissatisfaction amongst the customers. Whereas the preferences of the customers is more
inclined towards the products that are light in weight or good in terms of picture and voice
quality, the products of the organization were observed to be inefficient in attracting the
customers of the modern generation. Hence the company is expected to restructure their
manufacturing department and their operations for manufacturing the products that are of

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optimum quality in terms of the voice and audio and for introducing the products that are
light in weight and are easy to handle for the customers of the organization.
With a precise focus on the hybrid focus strategy of porter’s generic strategies, the
company is in need to make sure that they apply competitive pricing policy for the products
and their services (West, Ford and Ibrahim 2015). The implementation of the competitive
pricing strategy is much required from the part of the company in order to make sure that
they provide the products and their services to the customers with a precise focus on the
offerings and the pricing of the competitor organizations. This has the potential to enable the
company in effective management of the cost leadership that the Chinese consumer
electronics companies are trying to gain (West, Ford and Ibrahim 2015). Apart from this, the
improvement in the design and the quality of the products of the selected organization with a
precise consideration of the scope of customization of their products, the company will be
able to create unique products that can be differentiated easily in comparison to the products
of their competitors.
External Environment Analysis:
Political:
The impact of the political environment on the business operations of the selected
organization is pretty significant. The parent country for the selected organization is Finland
and the government of the mentioned nation is partially inactive in terms of taking initiatives
for providing the much required environment that the selected organization requires to
improve their business operations. The government of the parent country is seen to be
reluctant in providing any sort of favours to the selected organization such as bailout. This is
one of the main reason of the company’s realization of the need of forming an alliance with
renowned business organizations of the consumer electronics industry. Unlike many of the

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competitor organizations, the company experiences a significantly low level of support from
the part of the government and that restricts the business operations of the selected
organization owing to the absence of the sort of support that the organizations of major
political powers such as America or China get from their governments. Apart from this, the
impact of the political unrest in the nation such as China has the potential to affect the
manufacturing of the organization and that could the company to manufacture from a
comparatively high cost locations such United States.
Economic:
The company is expected to be severely affected with the economic downturn of the
recent years and along with that, the economic turmoil in European regions has the potential
to affect the sales of the products of the selected organization (Archibugi, Filippetti and Frenz
2013). The availability of the significant economic resources of the competitor organizations
such as Apple, Samsung or Google is considered to be capable of providing a major
competitor advantage to the competitor organizations and that imposes notable amount of
threat on the business operations of the selected organization. One of the prime reason of the
company’s ineffective research and development is the absence of the appropriate funding in
the aspect of the research and development of the company and that portrays the financial
incapability of the selected organization.
Social and Cultural Factors:
As mentioned earlier, the company is significantly affected with increasing
preferences of the customers towards the usage of the smartphones and along with that, the
rapid increment in the interest of the customers towards the usage of the modern applications
has the potential to influence the business operations of the selected organization. It is pretty
evident that the modern customers are highly influenced towards the usage of the applications
such as the Whatsapp or Facebook and the design of these sorts of applications are seen to be

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conducted with the usage of the operating systems such as Google’s Android and Apple’s
proprietary iOS (Kumar et al. 2015). On the other hand, the selected organization is seen to
be inclined towards the usage of Microsoft Windows which is notably restricting the selected
organization in appealing the customers with their products.
Technological:
The above mentioned social factors are building blocks for the elaboration of the
technological challenges that the selected organization faced. The development of the open
sourced operating system like Android along with the invention of the mobile applications
such as the Whatsapp or Facebook which has the potential to attract the customers, is one of
the top most priority for the selected organization. The application of the less popular
windows phone operating system is seen to be one of the major concern for the selected
organization and the application of the improved technology for the development of the
modern operating systems such as the Android is considered to be one of the main objective
for the company going forward.
Legal:
The legal implications on the competitor organizations of the chosen organization has
the potential to enable the company in expanding their business across the globe in a more
efficient manner. The legal section of the European Union is recorded to investigate the case
of Google’s usage of the Android and the strict action of the mentioned agency over the
business operations of the competitor organizations has the potential to increase the business
market of the selected organization (Europa.eu 2019).
Environmental:
The environmental concern on the business operations of the selected organization is
seen to be regarding the disposal of the wastages. Majority of the governments of the nations

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in which the selected organization operates, are seen to be considering the scope of forming a
law that will bind the electronics manufacturing organizations in responsible disposal of their
wastages and in recycling of their used devices (Suckling and Lee 2015). Along with that, the
company is seen to be affected with the increasing prices of the raw materials and that is
pretty evident with the rapid increment in the price of the Lithium which is one of the most
important material for the organization in producing the batteries of their products.
Evaluation of the Strategy:
The evaluation of the above mentioned strategy is pretty significant in stating the
support that it provides to the innovation and the changes. The main objective of the new
business strategy is the improvement of the products in terms of quality. As mentioned earlier
the organization is expected to research and develop an improved operating system for their
use and that is pretty significant in supporting the application of the innovative ideas and the
modern technology (Singh 2014). The formation of an improved open sourced operating
system has the potential of enabling the selected organization in expanding their innovative
thought process and along with that, the need of developing the mobile applications that will
be able to attract the customers in an more prominent manner, will be of great significance
for the selected organization in supporting the incorporation of the innovative solutions in
their products and the services.
The effective achievement of the customers’ preferences through the attractive design
of the products with a precise focus on the voice quality, picture quality and the weight of the
products is expected to introduce a radical change in the manufacturing of the products and
that has the potential of increasing the effectiveness of the products of the selected
organization to the customers. The pricing will be another crucial aspect that is expected to
contribute to the success of the organization. The application the competitive pricing policy