The Rise and fall of Nokia Case Solution Â
Despite introducing reforms in the business structure and maintaining a critical competitive edge in the Networking segment of the business the performances of the company declined in terms of the operating margins and the revenues that it generated from the markets where the business operated and this was majorly due to the fall of the Soviet Union which was a major market of the company. The rising interest rates in the home country of the company along with the devaluation of its economy also contributed to the crises as the employment rates decreased revenues of the company also dried up while the credit line was also squeezing due to rising interests rate from 8% to 15%.Â Â
The decision by the management of the company to focus on the telecommunications equipment and mobile phone manufacturing was critical in setting the future goals and key operation areas of the business.The most critical competitive advantage that the business enjoyed during the period was the branding of the Mobile Phones of the company as digital phones. There was no other significant competitor of the business in the digital segment of the industry.
The market leader, Motorola, was still an analog system based company,which was offering CDMA based handsets to the customers of the industry while most of the customers had shifted to the GSM networks. The other advantage that the business enjoyed was the ability to generate the customersâ€™ demands through phenomenal research and development and then cash on it as there were no significant competitors in the digital segment as compared to the scale of presence that Nokia had.
Although Motorola was slow in adopting the digital networks however; its introduction of the razor model swiftly improved the performances of the business as it remained one of the most used phones in the world and this affected the revenues and margins of Nokia as well as its market share declined during the period from 35% to 28% roughly.
The strategic marketing initiatives taken by the arrival of CEO,Kallasvuo,helped to revive the business in the markets of the U.S. where the market share of the company was fast falling. The launching of the company`s own OVI app store and the introduction of maps and GPS services was a critical advantage of the business. Apart from this, the business was still the market leader in the emerging markets of the world more specifically in the Middle East, Africa, China and India. This was due to the strategic marketing and branding of the products of the company as economic products were offered in these markings where the demand for the niche products was high.
If I were the CEO of Nokia, then I would not have opted for a deal with the Microsoft and would not have used the windows 7 as the operating system of the smartphones of the company. The most attractive segment along with positive growth has been the android segment in the industry and introducing an android based system would have been much profitable for the company and its shareholders. The reason behind the increase in demand of the android supported smartphones is the demand of the customers to have more apps including games. Along with various other supporting features,the other marketing competitive advantage that the management of the company could have secured was the low and middle-end segment of the market that it had long sustained. The emergence of the local Chinese android supporting smartphones and their dominance in their home markets was a testimony to that…………………….
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