Nokia OYJ: Financing the WP Strategic Plan SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nokia OYJ: Financing the WP Strategic Plan
The Nokia case provides an opportunity to explore financial policy in a situation of broad strategic change. In recent years, Nokia, the world's leading producer of mobile phones, had seen its market share and profits eroded by rival products such as Apple's iPhone and phones featuring Google's Android operating system. In February 2011, Stephen Elop, the recently appointed president and CEO of Nokia, announced a broad strategic plan and partnership with Microsoft to correct the company's course and improve its competitive position. Analysts regard the next two years as a period of great uncertainty for the company. The CFO of Nokia must reassess the firm's financial policy in light of the plan and consider its effects on the potential need for external funds, and the appropriate mix and cost of the debt or equity financing that might be used to raise those funds. Nokia, like many technology companies, often carried high cash balances to preserve financial flexibility, but in 2008 and 2009 in response to the global financial crisis it had drawn down cash to historically low levels and experienced several downgrades of its debt by major credit rating agencies. Students must evaluate the tradeoffs between maintaining cash reserves and the need for external funds and work through the implications of financing the projected need for external funds with debt or equity.
Swot Analysis of "Nokia OYJ: Financing the WP Strategic Plan" written by Susan Chaplinsky, Felicia C. Marston includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nokia Funds facing as an external strategic factors. Some of the topics covered in Nokia OYJ: Financing the WP Strategic Plan case study are - Strategic Management Strategies, Communication, Costs and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Nokia OYJ: Financing the WP Strategic Plan casestudy better are - – supply chains are disrupted by pandemic , increasing transportation and logistics costs, increasing commodity prices, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs,
increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Nokia OYJ: Financing the WP Strategic Plan
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nokia OYJ: Financing the WP Strategic Plan case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nokia Funds, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nokia Funds operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Nokia OYJ: Financing the WP Strategic Plan can be done for the following purposes –
1. Strategic planning using facts provided in Nokia OYJ: Financing the WP Strategic Plan case study
2. Improving business portfolio management of Nokia Funds
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nokia Funds
Strengths Nokia OYJ: Financing the WP Strategic Plan | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nokia Funds in Nokia OYJ: Financing the WP Strategic Plan Harvard Business Review case study are -
Learning organization
- Nokia Funds is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Nokia Funds is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nokia OYJ: Financing the WP Strategic Plan Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Nokia Funds is one of the leading recruiters in the industry. Managers in the Nokia OYJ: Financing the WP Strategic Plan are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Nokia Funds is one of the most innovative firm in sector. Manager in Nokia OYJ: Financing the WP Strategic Plan Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Nokia Funds has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Nokia OYJ: Financing the WP Strategic Plan - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Nokia Funds digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nokia Funds has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Nokia Funds are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management
– Nokia Funds is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Nokia Funds has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nokia Funds to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Nokia Funds is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Nokia Funds in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Finance & Accounting industry
– Nokia OYJ: Financing the WP Strategic Plan firm has clearly differentiated products in the market place. This has enabled Nokia Funds to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Nokia Funds to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Nokia OYJ: Financing the WP Strategic Plan Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Diverse revenue streams
– Nokia Funds is present in almost all the verticals within the industry. This has provided firm in Nokia OYJ: Financing the WP Strategic Plan case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Nokia OYJ: Financing the WP Strategic Plan | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nokia OYJ: Financing the WP Strategic Plan are -
Need for greater diversity
– Nokia Funds has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow decision making process
– As mentioned earlier in the report, Nokia Funds has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Nokia Funds even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
No frontier risks strategy
– After analyzing the HBR case study Nokia OYJ: Financing the WP Strategic Plan, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nokia Funds is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nokia OYJ: Financing the WP Strategic Plan can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Nokia OYJ: Financing the WP Strategic Plan has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nokia Funds 's lucrative customers.
Interest costs
– Compare to the competition, Nokia Funds has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Skills based hiring
– The stress on hiring functional specialists at Nokia Funds has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Nokia Funds needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High cash cycle compare to competitors
Nokia Funds has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nokia OYJ: Financing the WP Strategic Plan, in the dynamic environment Nokia Funds has struggled to respond to the nimble upstart competition. Nokia Funds has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nokia OYJ: Financing the WP Strategic Plan, is just above the industry average. Nokia Funds needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities Nokia OYJ: Financing the WP Strategic Plan | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Nokia OYJ: Financing the WP Strategic Plan are -
Loyalty marketing
– Nokia Funds has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Better consumer reach
– The expansion of the 5G network will help Nokia Funds to increase its market reach. Nokia Funds will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Learning at scale
– Online learning technologies has now opened space for Nokia Funds to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nokia Funds can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Nokia Funds can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nokia Funds is facing challenges because of the dominance of functional experts in the organization. Nokia OYJ: Financing the WP Strategic Plan case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nokia Funds can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– Nokia Funds can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nokia Funds in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nokia Funds can use these opportunities to build new business models that can help the communities that Nokia Funds operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Using analytics as competitive advantage
– Nokia Funds has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Nokia OYJ: Financing the WP Strategic Plan - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nokia Funds to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Nokia Funds can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nokia OYJ: Financing the WP Strategic Plan suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Nokia Funds can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Nokia OYJ: Financing the WP Strategic Plan External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nokia OYJ: Financing the WP Strategic Plan are -
Regulatory challenges
– Nokia Funds needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nokia OYJ: Financing the WP Strategic Plan, Nokia Funds may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Nokia Funds.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Nokia Funds needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Nokia Funds is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Nokia Funds can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Nokia Funds business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nokia Funds can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Nokia OYJ: Financing the WP Strategic Plan .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nokia Funds with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Nokia Funds
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Nokia Funds.
Consumer confidence and its impact on Nokia Funds demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Nokia Funds will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Nokia OYJ: Financing the WP Strategic Plan Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Nokia OYJ: Financing the WP Strategic Plan needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Nokia OYJ: Financing the WP Strategic Plan is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Nokia OYJ: Financing the WP Strategic Plan is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Nokia OYJ: Financing the WP Strategic Plan is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Nokia Funds needs to make to build a sustainable competitive advantage.
