Nokia OYJ: Financing the WP Strategic Plan SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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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 - – competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, there is backlash against globalization, there is increasing trade war between United States & China, wage bills are increasing, increasing household debt because of falling income levels,
cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, 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 -
Low bargaining power of suppliers
– Suppliers of Nokia Funds in the sector have low bargaining power. Nokia OYJ: Financing the WP Strategic Plan has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nokia Funds to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
Organizational Resilience of Nokia Funds
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nokia Funds does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Nokia Funds has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Training and development
– Nokia Funds has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nokia OYJ: Financing the WP Strategic Plan Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
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.
Highly skilled collaborators
– Nokia Funds has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Nokia OYJ: Financing the WP Strategic Plan HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Successful track record of launching new products
– Nokia Funds has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nokia Funds has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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 -
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.
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.
Increasing silos among functional specialists
– The organizational structure of Nokia Funds is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Nokia Funds needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nokia Funds to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Nokia Funds has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Nokia OYJ: Financing the WP Strategic Plan should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Nokia OYJ: Financing the WP Strategic Plan that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Nokia OYJ: Financing the WP Strategic Plan can leverage the sales team experience to cultivate customer relationships as Nokia Funds is planning to shift buying processes online.
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.
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.
Slow to strategic competitive environment developments
– As Nokia OYJ: Financing the WP Strategic Plan HBR case study mentions - Nokia Funds takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Nokia Funds, firm in the HBR case study Nokia OYJ: Financing the WP Strategic Plan needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Nokia Funds has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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 -
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.
Leveraging digital technologies
– Nokia Funds can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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.
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.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nokia Funds in the consumer business. Now Nokia Funds can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Nokia Funds to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nokia Funds to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Nokia Funds to hire the very best people irrespective of their geographical location.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nokia Funds can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Nokia OYJ: Financing the WP Strategic Plan, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Nokia Funds has opened avenues for new revenue streams for the organization in the industry. This can help Nokia Funds to build a more holistic ecosystem as suggested in the Nokia OYJ: Financing the WP Strategic Plan case study. Nokia Funds can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nokia Funds in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Nokia Funds has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Nokia Funds needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
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.
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.
Environmental challenges
– Nokia Funds needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Nokia Funds can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
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 .
High dependence on third party suppliers
– Nokia Funds high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Nokia Funds in the Finance & Accounting sector and impact the bottomline of the organization.
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.