Nokia is currently one of the biggest dealers in telecommunications equipment. Its presence has been greatly felt both locally and across the globe due to the wide expansion in business it has been experiencing. Nokia has spread its business everywhere to cater for customer needs and increase growth of telecommunications within the industry.
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It has produced different brands of mobile phone infrastructure on top of the other telecommunication equipment. “Interbrand ranked it the world’s most-valuable brand…,” (Hempel, Para. 3). It provides various mobile communication equipments in all major telecommunication markets and protocol such as CDMA, GSM and WCDMA. This paper will analyze the Nokia Company discussing its strengths, weaknesses, opportunities and threats facing it.
The company, being a major organization in the world has various strengths that help it continue to be competitive in the industry. It also has some weaknesses, which, if not taken care of, would cause it to be faced out of the market. We will also see the various opportunities of growth that it could utilize to enlarge its business and the likely threats facing it.
One of the biggest strengths it has is that it has a geographically wide network of distribution when compared with other organizations in the industry. “Everyday a quarter of the world’s population connect using Nokia…infrastructure and solutions,” Its branches are all over the world and this obviously increases its sales. Its Human Resource Department is composed of highly qualified individuals and professionals who work as a team.
Its financial base is very strong and always stable since it is constitutes of various divisions which are very profitable. Also, its new strategy, “notably the shift to software architectures and mobile internet models, the continuing quest to set efficiency benchmarks, and the need to chase emerging markets without sacrificing too much margin” (Faultline, Para. 3), has worked perfectly to maximize its sales.
Nokia gives the customers exactly what they want. Its products are user friendly as everyone is able to use them without any technicalities. This is coupled by the fact that its mobile phones contains as much accessories as anyone would want pushes their demand even higher “the company…remains the No. 1 mobile phone maker in the world,” (Barkoviak, Para. 1).
It provides an assortment of products for all classes thus satisfying the needs of its wide range of customers. Since its products are high quality and durable, they attract a higher price, which customers are willing to pay, and therefore brings in more profits as compared to other brands.
Some of the weaknesses that Nokia has are the price of its products. The products’ value is relatively high as compared to other products of the same modification in other companies. This makes customers settle for cheaper phones with the same qualities offered by other dealers.
This is made worse by the fact that Nokia does not consider the common ordinary person who earns little money. Even in their product promotion strategy, it does not seem to include them as one of its target. This people constitute a large portion of the market and therefore, there is loss of profits that could have been brought in by such people.
Besides, some of the products are complex to use for an ordinary person and most of the people do not even know what some of the items in the phone are used for. In some countries, there are very few customer service centers, e.g. in India, and this makes the relation with customers very poor and of low quality.
Further, Nokia produces phones that are modeled to operate on a global standard and in doing so, it has not catered for specific needs of other customers causing other brand to dominate such markets, e.g. North America. Also with the changed management, Nokia’s sales have been decreasing “which could indicate a local weakness or change in strategy,” (Finance Work, Para. 6).
There are many opportunities available to Nokia for it to expand its activities. In India, for example, the there is increased penetration of telecommunications in its markets. Statistics show that “India continues to be one of the fastest growing major telecom markets in the world,” (Budde, P. 1). Nokia can take advantage of its wide range of products which have different features and for different consumers to increase its market share in the country before other companies can rise to the occasion.
With the increased purchasing power of Indian people, all it needs is a good marketing strategy to attract the right customer. Once it has an identified portion of the market and gained customer loyalty, it will be hard for other companies to penetrate through and it will have established a solid ground of monopoly or controlling a large segment of the market.
To continue profiting from its vast market share, it has to deal with certain threats that are facing it. For example, new companies are rising up to fight for a share of the market and therefore posing a big competitive challenge to Nokia. Such companies are “Motorola, Samsung and Sony Ericson,” (Kasi, Para. 5).
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In addition, companies like Apple and RIM have brought new developments in the phone industry such as the Smart phones and the consumer is rapidly going for the smart phones. It has been established that, “any cell phone company that hopes for world domination must lead the Smart phone market too,” (Hempel, Para. 5). Nokia definitely needs to shape up or ship out in this market.
Nokia Company is a big company controlling a large market share of the telecommunications industry. However, for it to continue being such it has to strategically use its competitive powers to the maximum. In addition, it should work on its weaknesses and seize opportunities it has. Also, develop a way of adapting fast to new developments. Once it has done that, it will continue to dominate the industry.
Barkoviak, Michael. Nokia’s Phone Problems Continue, as Company Struggles to Create Appealing Smart phones, DailyTech LLC, 2010
Budde, Paul. India- Key Statistics, Telecommunications Market and Regulatory Overview, Communication Pty ltd. 2011. Designed by Arcaeda.
Faultline. Nokia Restructuring from Strength for Mobile Internet. Free Whitepaper- Transforming IT Culture, June 2007
Finance Work. Critical Economies and Market Analyses: Weakness in Nokia. Finance work, [September 2006]. Retrieved from http://financewonk.blogspot.com/2006/09/weakness-in-nokia.html
Hempel, Jessi. Nokia’s North America Problem: To stay No. 1 in the High-end Cellphones, the Finnish Phonemaker has to Take on Apple and RIM on their Home Turf. So far it hasn’t got a foothold. Fortune Magazine. Jan 2009
Kasi. Marketing Mixx: Nokia SWOT Analyses, . Online. Web.