Nokia's Strategic Analysis: Competitive Forces and Stakeholders

This report provides a comprehensive analysis of Nokia Corporation, examining its business environment, market competition, and strategic challenges. It begins with an overview of Nokia's history, strengths, and weaknesses, followed by an in-depth SWOT analysis. The report then applies Porter's Five Forces and PESTEL analyses to assess the competitive landscape and macro-environmental factors affecting Nokia. A detailed stakeholder analysis is also included, identifying key stakeholders and discussing strategies for effective management. The report highlights the impact of competition from companies like Apple and Samsung, analyzing internal factors and market trends influencing Nokia's performance. Overall, the report provides insights into Nokia's strategic position and offers recommendations for improving its market competitiveness and stakeholder relations.

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Introduction:
The impact of the competition in the modern business world is pretty significant with
the increasing number of new organizations entering the market. The increasing intensity of
the market competition is seen to affect the business operations of the existing business
organizations in a significant manner and that affects the growth and the survival of the
existing organizations. The paper is focused in the elaboration of the business environment of
a chosen organization named as Nokia. The selected organization was one of the biggest
name in the telecommunication industry, however, in recent year, the company is seen to face
the detrimental impact of the competition from the part of the market giants of the industry,
specifically Apple. The paper analyses the impact of the market competition and in addition
to that, it also evaluates the macro environmental factors that affect the business operations of
the selected organization. Apart from this, the paper also produces a stakeholder analysis with
a precise focus on the activities that the company is expected to conduct in order to manage
the stakeholders in a better manner. In addition to this, the paper provides an analysis of the
internal factors that affect the business operations of the selected organization.
Overview:
Nokia Corporation is a renowned Finnish multinational company that operates in the
telecommunications, consumer electronics and information technology industry. The chosen
organization was established in the year 1865 by a trio which included Fredrik Idestam, Leo
Mechelin and Eduard Polón (Nokia.com. 2019). The selected organization was headquartered
in Espoo, Finland and had the expertise of serving the customers across the world with the
telecommunications and the consumer electronics products. The chosen organization is
currently headed by Risto Siilasmaa, the chairman of the organization, Rajeev Suri, the
President and the Chief Executive Officer of the organization and Kristian Pullola, the Chief

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Financial Officer of the organization (Nokia.com. 2019). In spite of the operational brilliance
of 102,761 number of employees across the globe, the company has failed to achieve their
desired growth and that is pretty evident with the decrease of the revenue of the company to
22.56 billion Euro in the year 2018 (Nokia.com. 2019). However, the company has achieved
an increased operating income of 1.22 billion Euro in the same year (Nokia.com. 2019).
Due to the inefficient formation of the corporate strategies from the part of the chosen
organization’s senior level management, the organization has lost significant amount of
market share to the competitor organization, Samsung from the introduction of the Android
(Samsung.com 2019). The strategy of applying of the Symbian Operating system from the
part of the selected organization has miserably failed and that affected the financial stability
of the selected organization in a significant manner (Bouwman et al. 2014).
SWOT Analysis:
Strengths:
The selected organization has 142 years of glorifying history as one of the top brands
before the introduction of IOS and Android smartphones. Apart from that, the selected
organization is able to generate a significant amount of fondness amongst the customers as
brand is seen to contribute with the first mobile phones to the customers.
With an expansion of the workforce to 102761 number of employees, the selected
organization is seen achieve the expertise of meeting the demands of the market in an
efficient manner (Nokia.com. 2019). In addition to this, with the business coverage across
130 countries, the chosen organization is able to achieve a significantly strong selling and
distribution network (Nokia.com. 2019).
The company invested more than 1.4 billion US dollars over the years in the aspect of
research and development (Nokia.com. 2019). The company has a significantly efficient

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customer interaction system for the effective identification of the modern trends which has
the potential to help them in the design of the products in accordance to the preferences of the
customers. In addition to this, the longer durability of the products, user friendly interfaces
and the efficient strategies for the global expansions are considered as major strengths of the
selected organization.
Weakness:
The company is seen to suffer from the impact of the heavy weight of the handsets,
the low voice quality in the products, the absence of the stylish designs in their low priced
products. Apart from this, the new E-series is considered to be a flop for the chosen
organization and the absence of the strong products in the portfolio of the selected
organization is considered to put notable constraints in the business operations of the selected
organization (Wang, Hedman and Tuunainen 2016).
Opportunities:
The company has the opportunity of introducing the well designed and stylish
products in their portfolio and adding to that, improvement in the quality of the camera of the
company has the potential to provide notable amount of growth to the chosen organization. In
addition to this, the increased presence of the company in the market of 3G or 4G handsets
will be of great significance for the selected organization.
Threats:
The significant market share of Apple and Samsung is the major reason of the wipe
out that the selected organization faced in the year 2014. In addition to the impact of
competition from the above mentioned market giants, the low cost products of China is seen
to be a major concern for the selected organization. The modern trends of the smart phones
has the potential to affect the business operations of the selected organization.

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Porter’s Five Forces Analysis:
Competitive Rivalry: High
As mentioned the chosen organization is seen to face tough competition from the part
of the market leading organizations such as Samsung, Apple and Xiaomi. With a revenue of
265.595 billion US dollars in the year 2018, Apple is largest competitor for the selected
organization (Apple.com 2019). Apart from that, Samsung with a revenue of 210.9 billion US
dollars in the year 2017 is seen to put a tough fight to the selected organization after the
introduction of the Android (Samsung.com 2019). With the application of low pricing in the
products, the emergence of Xiaomi in the telecommunication and the consumer electronics
industry notably threatening for the chosen organization.
Bargaining power of the Buyers: High
With a precise focus on the dynamics of the consumer electronics market, it is pretty
evident that the excellence of Apple in introducing innovative products, the brilliance of
Xiaomi in introducing low cost products and the capability of Samsung in incorporating the
modern technology in the products are seen to provide notable amount of opportunity of
organizations to choose from.
Bargaining Power of Suppliers: Low
The consumer electronics and telecommunications industry is seen to experience the
excellent supply of the organizations such as 3M Company, AAC Technologies Holdings
Incorporated, Advanced Semiconductor Engineering Incorporated, Alps Electric Company
Limited, ASM Lithography Inc. and Corning Inc. across the globe where the main focus of
the mentioned suppliers is to provide quality supply of the raw materials in a cost efficient
manner (3m.com. 2019). Apart from this, the suppliers also consider the scope of significant
discount to the customer organizations in case of bulk purchases.

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Threat of New Entrants: Moderate
With a precise focus on the rapid growth of the industry, the new organizations are
seen to be influenced with the idea of entering the new market, however, the significant
market share of the above mentioned organizations such as Apple, Samsung and Xiaomi is
seen to affect their intention in a notable manner. In addition to this, the high amount of
investment required for the setting up of the infrastructure and for the marketing and the
promotional strategies is seen to be a significant concern for the selected organization.
Threat of Substitution: High.
As mentioned earlier, the consumer electronics and the telecommunications market is
significantly populated with the market leading organizations such as Apple, Samsung and
Xiaomi. The spirit of innovation of the above mentioned organizations, the streamlined
product line of Apple and the idea of creating products irrespective of the targeted segment of
the customers are seen to be significant qualities of the competitor organizations, capable
substituting the selected organization.
PESTEL Analysis:
Political:
The selected company lacks the much needed government support in a significant
manner and that is pretty evident with the refusal of Finnish government in case of providing
bailout or special favours to the selected organization (Valtioneuvosto.fi 2019). This forces
the organization to face the impact of the intense competition in the global business world as
the competitor organization are seen to strongly backed by their national governments.

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Economic:
The selected company is seen to face the impact of the European downturn in a
notable manner in recent years and apart from that, the economic turmoil across Europe is
one of the crucial factor that affected the business operations of the selected organization
(Schneider and Kearney 2013). The company is seen to face the impact of the competition as
it does not have the economic resources that are available to the competitor organizations and
at the same, it I not subjected to a fast growing Chinese market as well.
Social:
The increasing usage of the mobile applications and the smartphones from the part of
the modern customers is seen to be a key factor that is affecting the business operations of the
selected organization. As the company lacks the much needed intent in producing quality
smartphones, the creation of the value amongst the customers through the production of the
benefits such as the speed, efficiency and the much needed ease in their lifestyle is seen to be
absent from the pear of the organization.
Technological:
The company is seen to be affected with their incapability of developing the open
sourced operating system such Android in an efficient manner. Adding to that, the required
sense of urgency in the business operations of the selected organization in case of inventing
and developing the mobile application is seen to be much needed for the selected
organization in conducting profitable business.
Environmental:
The disposal of the used products of the selected organization is observed to be one of
the crucial aspect of the business operations of the selected organization that needs to be

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conducted in a safe and environment-friendly manner. Apart from this, the ethical sourcing of
the raw materials in accordance to the environmental guidelines is considered to be a major
priority for the selected organization.
Legal:
The legal concerns for the selected organization is primarily the labour and employee
charges and the employee welfare activities. Apart from that, the selected organization is seen
to put strong emphasis on the fair work and on the aspect of equal opportunity for employees
of the organization. Apart from this, the European Union’s investigation regarding the case of
Google for the usage their Android system could create a business field for the selected
organization (Trade.ec.europa.eu. 2019).
Stakeholder Analysis:
The stakeholders of the organization are primarily the employees, suppliers,
shareholders and the Finnish government.
With a precise focus on the strategic stakeholder analysis, the senior level
management of the organization is responsible for the effective evaluation of the modern
trends so that they be able to identify the need of the introducing the improved quality
smartphones or the need of developing efficient operating system (Singh 2014). Apart from
that, the senior level management of the organization is in need to meet the training and the
developmental needs of the employees in an efficient manner for the improvement of the
skills and the competencies of the employees. This will be significant for the organization in
introducing the products with the presence of the modern technology and will be crucial for
the organization in achieving the preferences of the customers. Hence the effective
management of the above mentioned issues will be crucial for improvement of the company’s
financial performances.

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Considering the normative stakeholder analysis, the ethical business conduction from
the part of the employees of the organization and from the part of the suppliers of the
organization in case of the ethical sourcing of raw materials is notably crucial in the effective
management of the moral implications for the organization (Ali-Yrkkö et al. 2013). The
organization is in need to nullify any scope of discrepancy regarding the wage and work
characteristics of the employees inside the organization. With a precise focus on the
increasing intensity in the marketing and the promotional campaigns from the part of the
majority of the organizations operating in the industry, it is visible that many of the
promotional claims are not effectively met by the organizations. The selected organization is
in need to make sure that they do not participate in such acts which has the potential to lead
the organization to reputational crisis.
Conclusion:
On a concluding note, Nokia as a consumer electronics or telecommunications
company, has significant amount of potential. With a sense of fondness amongst the
customers regarding the history of the company, Nokia has the potential to become one of the
market leader of the industry, however, the absence of the much required sense of urgency
from the part of the decision makers of the company, is seen to affect the organization after
the introduction of Android. The company needs to come with attractive smartphones with
effective and modern day features for providing the optimum quality experience to the
customers and retaining their legacy of being the first choice of the customers.

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References:
3m.com. 2019. 3M Science. Applied to Life. 3M United States. [online] Available at:
https://www.3m.com/
Ali-Yrkkö, J., Kalm, M., Pajarinen, M., Rouvinen, P., Seppälä, T. and Tahvanainen, A.J.,
2013. Microsoft acquires Nokia: implications for the two companies and Finland. ETLA
Brief, 16(3).
Apple.com 2019. Apple. [online] Available at: https://www.apple.com/
Bouwman, H., Carlsson, C., Carlsson, J., Nikou, S., Sell, A. and Walden, P., 2014. How
Nokia failed to nail the Smartphone market.
Nokia.com. 2019. Nokia Corporation. [online] Available at: https://www.nokia.com/
Samsung.com 2019. Samsung uk. uk. [online] Available at: https://www.samsung.com/
Schneider, F. and Kearney, A.T., 2013. The shadow economy in Europe, 2013. Johannes
Kepler Universitat, Linz.
Singh, N.P., 2014. Microsoft acquired Nokia in unipolar operating system market.
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Trade.ec.europa.eu. 2019. Trade defence - Trade - European Commission. [online] Available
at: http://trade.ec.europa.eu/tdi/
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